Navigating Labor Laws for IT Companies in Tamil Nadu: Seeking Clarity on Employee Rights and Disputes

Dear Seniors,

Could someone please help me in gaining clarity on the following:

1. I would like to know whether IT companies fall under labor laws.
2. Will the Industrial Disputes Act come into play when there is a dispute between the employer and employees in an IT company?
3. Does the Inspector of Factories/Companies have the authority to conduct surprise visits to companies, verify documents, and should the company respond to all their queries?
4. Are there any associations/common forums for IT companies in Chennai?
5. Is the company obligated to answer to government labor officials (e.g., Labor Commissioner)?
6. In the event of a dispute between the employer and employees of an IT firm, where the employees are dissatisfied with the grievance resolution, aside from seeking legal remedies, what can an employee do if they have already submitted all their certificates and provided an undertaking at the time of joining?

I would appreciate your kind advice.

Thanks,
Arun

Dear Mr. Arun,

Yes, IT companies are covered by the provisions of labor laws. The working conditions of employees of IT companies in Tamil Nadu are covered by the provisions of the Tamil Nadu Shops and Establishments Act. However, the Government has exempted IT companies from the provisions of Chapter II and Chapter III of the Tamil Nadu Shops and Establishments Act. The other chapters are applicable. Other labor laws are also applicable subject to the definition of "establishment" in those Acts and also subject to other sections of those Acts.

IT companies are considered "industry" as defined in the Industrial Disputes Act and as per the interpretation of the term "industry" by the Honourable Supreme Court of India.

The Inspector of Factories may not have jurisdiction to inspect IT companies unless a "manufacturing process" as defined in the Factories Act is carried out in the IT company. The development of software does not fall under the definition of a manufacturing process as defined in the Factories Act. However, the activities of IT companies fall within the definition of "establishment" as defined under the Tamil Nadu Shops and Establishments Act. Therefore, the Inspector appointed/notified under the Tamil Nadu Shops and Establishments Act can inspect IT companies.

I have no knowledge about the information requested under item 4.

The answer to item 5 is yes.

The best method would be to persuade the employer to release all the documents.

With regards,