Is My ITES Company in Gurgaon and Bangalore Covered by Industrial Employment Laws?

My company is in the ITES industry and is registered under the Shop & Commercial Estab. Act. In Gurgaon, there are 700 employees, and in Bangalore, there are 250 employees.

My query is related to whether my company is covered under the definition of an industrial establishment under the Industrial Emp. (Standing Order) Act or under the Payment of Wages Act. Or, is there any specific guideline/notification from the respective State Govt. to make the captioned Acts applicable to an ITES company.

Dear Swati,

As far as your Haryana Unit is concerned, it is hereby clarified that you are not required to have Standing Orders certified by the Certifying Officer, Haryana under the Industrial Employment (Standing Orders) Act, 1946. In my opinion, your unit is not covered under this Act. After reviewing the Payment of Wages Act, 1936, it is evident that your unit is also not covered under this Act. Furthermore, it is important to note that the Government of Haryana has issued a notification stating that units covered under the scheduled employments list under the Minimum Wages Act, 1948, shall be subject to provisions regarding deductions from or delays in payment of wages to employees in scheduled employments.

Opinion submitted as requested.

Regards,

R.N.Khola
(Labour Law & Legal Consultants)
09810405361

Swati,

The Industrial Employment Act applies to every industrial establishment where 100 or more workmen are employed. Both the central and state governments have the power to apply this act to any establishment employing even less than 100 workmen. Actually, the act is central legislation but is administered by both the central and state governments.

Thank you.

I am working in an IT company based in Gurgaon. If you could please help me out by providing information on the act that exempts IT companies in Haryana from obtaining Certified Standing Orders, it would be greatly appreciated.

Regards,
Sachin

When the IT company is not covered under the definition of an Industrial Establishment, how can this Act be applicable? On the contrary, please let me know where it is written that this Act covers IT companies for certification of Standing Orders. The Haryana Government has not issued any notification for their coverage. For further clarification, you can contact the office of the Labour Commissioner, Haryana.

Regards,
R N KHOLA

To my knowledge, IT companies are covered by the Shops and Establishments Act. If this is correct, why wouldn't an establishment belonging to ITES also be covered by the Standing Orders Act? Could you please clarify your point in this context?

With due regards,

It is correct that IT/ITES units are covered under the definition of the establishment under the Shops & Establishment Act. Here in the State of Haryana, these units are covered under the applicable Punjab Shops & Commercial Establishment Act, 1958. They are not engaged in any manufacturing activity. According to Section 1(3) of the IE (SO) Act, 1946, it applies to every industrial establishment wherein one hundred or more workmen are employed, or were employed on any day of the preceding twelve months:

Provided that the appropriate Government may, after giving not less than two months' notice of its intention to do so, by notification in the Official Gazette, apply the provisions of this Act to any industrial establishment employing such a number of persons less than one hundred as may be specified in the notification.

Haryana Govt. has made it applicable to every Industrial Establishment employing 50 or more workmen instead of 100.

Industrial establishment is defined in Section 2(e) of the IE (SO) Act, 1946, and in my opinion, as IT/ITES units are not covered by the definition of the industrial establishment, they are not covered by this Act.

Haryana Govt. has not issued any notification regarding the applicability of this Act to such types of units. The Government is also not certifying the standing orders of such types of units which are covered under the State Shops Act.

Opinion submitted.

Regards,
R N KHOLA

Please let me know how many states have issued notifications regarding the applicability of the Standing Orders Act to IT/ITES units. Also, I would like to know if Tamil Nadu and Karnataka's regulations are applicable to IT establishments.

Thank you.

Dear Member, this is to inform you that my area of work is limited to Haryana State. I do not collect information on other states. Members from Tamil Nadu and Karnataka will be able to provide the appropriate response. I have heard that the Government of Karnataka has issued such a notification.

Regards,
R N KHOLA

In continuation to my reply, I would like to add here that while going through the Bombay Shops Act, we came across Section 38B, which reveals that shops and establishments covered under this Act are also covered under the IE (SO) Act, 1946, and the rules made thereunder for establishments employing 50 or more employees. The relevant section may be read as follows:

38-B. Application of Industrial Employment (Standing Orders) Act to Establishments

The provisions of the Industrial Employment (Standing Orders) Act, 1946, in its application to the State of Maharashtra (hereinafter in this section referred to as "the said Act"), and the rules and standing orders (including model standing orders) made thereunder from time to time, shall, mutatis mutandis, apply to all establishments wherein fifty or more employees are employed and to which this Act applies, as if they were industrial establishments within the meaning of the said Act.

This shows that the establishments which are not covered under the definition of 'Industrial Establishment' as defined under the IE (SO) Act, 1946, are either required to be notified by the appropriate government, or there must be a provision in any of the enactments for the applicability of this IE (SO) Act, 1946, on those establishments.

Regards,
R N KHOLA

Dear Khola Sir,

Could you please let me know if ecommerce companies fall within the ambit of the ISO act and if it applies to them?

Dear Mr. Khola, thanks for your feedback and knowledge provided under the SO Act. My question is regarding the Government of Karnataka's exemption for IT industries as per the notification:

Karnataka I4 Policy Exemption

"The latest IT policy of the Government of Karnataka, the Karnataka I4 Policy—in which the 4 'I's stand for IT, ITES, Innovation, and Incentives—announced the intention of the Government to exempt IT, ITES, 'startups,' and 'knowledge-based' industries. The notification has exempted not only IT/ITES establishments from the provisions of the SO Act but also 'startups, animation, gaming, computer graphics, telecom, BPO, KPO, and other knowledge-based industries' (Covered Establishments) from the ambit of the SO Act, with the intent of making Karnataka an investor/industry-friendly destination. Information technology (IT) and IT-enabled Services (ITeS) establishments in Karnataka are exempted from compliance under the Industrial Employment (Standing Orders) Act of 1946, per a recent notification by the Government of Karnataka for 5 years from January 25, 2014, subject to the following conditions."

Inquiry About Punjab Government Notification

Is there any notification from the Punjab Government to exempt the IT industry from the ambit of the SO Act to promote the IT industry in the state? If so, please share.

Hi, please help and let me know if Tamil Nadu IT/ITES companies are applicable under the Industrial Establishment Act (Standing Orders).

Dear Members,

Now the Haryana Government has covered all shops and commercial establishments under the purview of the Industrial or other Establishment under the Payment of Wages Act, 1936. Consequently, they are now covered under The Industrial Employment (Special Provisions) Act, 1946. In my opinion, if they are employing 50 or more employees during the preceding twelve months, then they are required to have a Certified Special Provisions for their units.

R N KHOLA

Applicability of the Industrial Dispute Act in Punjab to software or information technology companies.

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Hi, I am writing to inquire about the applicability of the Industrial Dispute Act in Punjab to software or information technology companies.

Dear Mr. R N Khola,

We are covered under the Punjab Shops & Establishment Act, and our office is in Gurgaon (HR). We heard that we have to apply for Standing Order. Please suggest the steps for this procedure.

Regards,
Ravi Sharma
M- 8527090910

Dear Member,

In the state of Haryana, we are required to apply for certification of Standing Orders to the Certifying Officer, Haryana. Please prepare the draft Standing Orders for your company and submit the attached Form I to the Certifying Officer of the state.

R N KHOLA