Landmark Ruling: How Chennai Court's Decision Impacts Software Engineers in Supervisory Roles

Dear friends,

The Labour Court in Chennai has issued a landmark ruling that covers provisions of the Industrial Dispute Act, 1947 for a software engineer working in a supervisory capacity. To read the complete news report, please click on the following link: [Chennai court orders HCL to reinstate sacked employee | Business Standard News](http://www.business-standard.com/article/companies/chennai-court-orders-hcl-to-reinstate-sacked-employee-116051000750_1.html)

Forwarded for your information.

Dinesh Divekar

Request discussion as to whether this decision will adversely impact the "hire and fire" policy followed by IT industries and consequently its competitiveness from a performance point of view, but will ensure job security of the employees in the IT industries. In fine, will this decision be good or bad for the IT industries? It is also reported that the industry is contemplating to move to the higher court against this decision.

If an industry can maintain "competitive" standards only by hire and fire, then something is wrong. While it should be like a government or PSU job where it is totally safe, there should not be insecurity also. Insecurity causes its own set of problems.

Just being an IT company does not exempt it from the provisions of the law. Unless a specific exemption for the company is granted by the government, which is rare, all labor laws are applicable to the IT company as well. This is because it is conducting an industry; therefore, the Industrial Disputes Act (IDA) would also apply.

In case of dismissal or termination, the Honorable Court will examine if the concerned employee fits the definition of a workman as per section 2(s) of the IDA. Consequently, if the action is based on misconduct, it will be weighed in terms of the proportionality of the punishment. There is no "hire and fire" policy. If the concerned employee is performing manual, technical, or clerical duties not involving major decision-making or granting/recommending leaves, then he could be considered a workman. In that case, any termination must be preceded by a domestic enquiry if it is for misconduct; otherwise, it will be deemed illegal and quashed.

Regards,
Dinesh

Dear Dmc123,

Yes, all industries should be covered under all labor laws. However, as far as the state of Karnataka is concerned, the Government of Karnataka has exempted the IT/BPO sector from the Industrial Standing Orders Act. This decision was made against the recommendation of the Department of Labor.

Thanks,
Dinesh Divekar