Seeking Guidance on Drafting Disciplinary Procedures for Our IT Service Company

Request for Disciplinary Procedures for IT-Enabled Service Company

We are an IT-enabled service company and want to draft an employee handbook covering disciplinary procedures. Could someone share the disciplinary procedures to be followed for such a company? The procedures generally available are as per the Industrial Disputes Act, which may not be applicable to us.

Regards,
Preeti

The IT-enabled service companies are not exempt from the provisions of the Industrial Disputes Act. They come within the ambit of the definition of the term "industry" as defined under the Industrial Disputes Act, 1947.

The employees of the IT-enabled service companies, if they come within the ambit of the definition of the term "workman" as defined in section 2(s) of the Industrial Disputes Act, can have the remedies provided for under the Industrial Disputes Act, 1947.

Disciplinary Procedure

The Industrial Disputes Act does not prescribe any disciplinary procedure.

The procedure to be followed in case of disciplinary proceedings is regulated by:

• The certified standing orders certified under the Industrial Employment (Standing Orders) Act if the Act is applicable to the establishment.

• If the Industrial Employment (Standing Orders) Act is applicable but if the standing orders are not certified yet, then the procedure prescribed in the Model Standing Orders appended to the Rules framed under the Industrial Employment (Standing Orders) Act is applicable and has to be followed.

• If the Industrial Employment (Standing Orders) Act is not applicable to the establishment, then the general procedure for the conduct of disciplinary proceedings is to be followed.

Regards,

Dear Mr. V. Harishishnan, Regarding this query, I would like to know a few things. Sir, if IT-enabled service companies come within the ID Act, then employees of the IT services will also be covered as 'workmen' under the ID. Therefore, if any IT employee is receiving a salary of more than 50,000 PM, would he be deemed a workman? This is in light of the recent amendment to the ID Act, where employees earning salaries of not more than 10,000 PM are considered 'Workmen.'

I am seeking clarification on the correct applicability of the Act concerning the definition of a workman, for my information only. Could you please clarify this?

Regards, Atul S Malve Manager- HR & Admin

Dear Mr. Atul S Malve,

Understanding the Definition of "Workman" Under the Industrial Disputes Act

I request you to go through the definition of the term "workman" in section 2(s) of the Industrial Disputes Act. To come within the definition, a person should:

- (a) Be employed in an industry as defined under the I.D. Act. If the establishment in which the person is employed does not come within the definition of the term "industry" as defined under the I.D. Act, he cannot get the coverage of the I.D. Act.

and

- (b) He should be a workman as defined under section 2(s) of the I.D. Act. That is:

- (i) He should be employed in an industry as defined under section 2(j) of the I.D. Act and
- (ii) He should be employed to do any manual, skilled technical, operational, clerical, or supervisory work for hire or reward, that is, for wages and
- (iii) He should not be subject to the Air Force Act, the Army Act, or the Navy Act and
- (iv) He should not be employed in the police service or as an officer or other employee of a prison and
- (v) He should not be employed mainly in a managerial or administrative capacity and
- (vi) He should not be employed in a supervisory capacity and draw wages exceeding Rs. 10,000 per mensem and
- (vii) He should not exercise functions mainly of a managerial nature.

The IT companies are "industry" as defined in the Industrial Disputes Act. Therefore, condition (a) is fulfilled. Thereafter, please check whether all the conditions listed at (b) are fulfilled. If all these conditions are met, the employee of an IT company is a "workman" as defined in the ID Act.

An employee of an IT company who is drawing more than Rs. 10,000 will go out of the purview of the ID Act only if he is employed in a supervisory capacity or exercises functions mainly of a managerial nature. In other words, an employee of an IT company who draws wages exceeding Rs. 10,000 per month and who is not employed in a supervisory or managerial capacity will come within the definition of the term "workman" as defined under the I.D. Act.

With regards,

Thank you for your advice on this.

Roles of IT Employees

Regarding the roles of IT employees, I don't think these employees are below the level of supervisors or managers. Considering their high pay packages, which usually exceed 10,000 per month, it may be difficult for them to be covered under the Industrial Disputes Acts. Therefore, I have raised this query.

Seeking Redress for Service Condition Disputes

Continuing from this point, if an employee does not fall within the purview of the Industrial Disputes Act or meet the definition of a workman under the Industrial Disputes Act (as confirmed above), and has a dispute regarding any of their service conditions or terms, how should they seek redress? Who is the proper competent authority to address this issue?

Your advice on this matter would be greatly appreciated.

Regards,
Atul S. Malve

Thank you very much for this valuable guidance! In short, the employee who is not covered under the ID has to struggle hard for grievance redressal, if any. It was very nice to take advice from you. Thanks again.

Regards,
Atul S. Malve