In a development from August 4, 2025, Karnataka’s Labour Minister raised alarms over massive layoffs at TCS, questioning whether the long-standing exemption from labour law inspections for IT, ITeS, BPO, and startup companies should continue. The exemption—originating under the 1946 Standing Orders Act and extended twice—permits companies to operate without routine labour department scrutiny, provided they set up internal POSH and grievance committees, inform the department of disciplinary actions, and promote fair service conditions. However, IT & BT Minister Priyank Kharge confirmed the exemption remains in place until 2029 to uphold Karnataka’s economic competitiveness.
timesofindia.indiatimes.com
This story hits at the heart of trust in self‑regulation: startups and tech giants enjoy freedom—but when large-scale layoffs happen, should internal ethics mechanisms suffice? Or have these exemptions inadvertently created soft targets for compliance failures? For HR and compliance leaders, it’s a reminder that creating strong internal redressal, transparency, and ethics frameworks isn’t optional—it’s vital for resilience, even when external monitoring is light.
In high-growth tech environments with reduced external oversight, what proactive internal audit and ethics mechanisms can ensure fair labour treatment—even under pressure?
Should HR adopt “sunset clauses” or periodic external reviews as a condition of maintaining exemptions, especially after impactful workforce changes like layoffs?
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4timesofindia.indiatimes.com
This story hits at the heart of trust in self‑regulation: startups and tech giants enjoy freedom—but when large-scale layoffs happen, should internal ethics mechanisms suffice? Or have these exemptions inadvertently created soft targets for compliance failures? For HR and compliance leaders, it’s a reminder that creating strong internal redressal, transparency, and ethics frameworks isn’t optional—it’s vital for resilience, even when external monitoring is light.
In high-growth tech environments with reduced external oversight, what proactive internal audit and ethics mechanisms can ensure fair labour treatment—even under pressure?
Should HR adopt “sunset clauses” or periodic external reviews as a condition of maintaining exemptions, especially after impactful workforce changes like layoffs?
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In high-growth tech environments with less external oversight, several proactive internal audit and ethics mechanisms can ensure fair labour treatment, even under pressure.
1. Establish a robust internal audit team: This team should regularly review the company's compliance with labour laws and internal policies. They should also assess the effectiveness of the company's internal controls and risk management systems.
2. Implement a comprehensive ethics program: This program should include clear policies on ethical conduct, regular training for employees, and a confidential reporting mechanism for ethical violations.
3. Foster a culture of transparency: Regularly communicate with employees about the company's performance, future plans, and any significant changes that may affect them. This can help build trust and reduce anxiety among employees.
4. Set up a strong grievance redressal system: This system should allow employees to raise concerns or complaints without fear of retaliation. It should also ensure that these concerns are addressed promptly and fairly.
As for the question of whether HR should adopt "sunset clauses" or periodic external reviews as a condition of maintaining exemptions, it's a complex issue that may require a balanced approach. On one hand, these measures can provide an additional layer of oversight and help ensure compliance with labour laws. On the other hand, they may also impose additional burdens on companies and potentially hinder their competitiveness. Therefore, it's crucial to consider the specific circumstances of each company and the potential impacts on both employees and the business before making a decision.
From India, Gurugram
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1. Establish a robust internal audit team: This team should regularly review the company's compliance with labour laws and internal policies. They should also assess the effectiveness of the company's internal controls and risk management systems.
2. Implement a comprehensive ethics program: This program should include clear policies on ethical conduct, regular training for employees, and a confidential reporting mechanism for ethical violations.
3. Foster a culture of transparency: Regularly communicate with employees about the company's performance, future plans, and any significant changes that may affect them. This can help build trust and reduce anxiety among employees.
4. Set up a strong grievance redressal system: This system should allow employees to raise concerns or complaints without fear of retaliation. It should also ensure that these concerns are addressed promptly and fairly.
As for the question of whether HR should adopt "sunset clauses" or periodic external reviews as a condition of maintaining exemptions, it's a complex issue that may require a balanced approach. On one hand, these measures can provide an additional layer of oversight and help ensure compliance with labour laws. On the other hand, they may also impose additional burdens on companies and potentially hinder their competitiveness. Therefore, it's crucial to consider the specific circumstances of each company and the potential impacts on both employees and the business before making a decision.
From India, Gurugram
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The massive layoffs at TCS is a concern for the whole country.
Now it is an alarming question for the whole IT sector companies and the will go for lay off sooner or later days.
The long-standing exemption from labour law for the IT, ITeS and BPO company employees will have to suffer a lot.
The exemption under the 1946 Standing Orders Act speaks for the inception periods but not for longer duration.
The extension granted twice and permitting companies to operate without routine labour department scrutiny was a major flaw by the Govt.
This action of government is to ,provide free hand to abstain away from the legal frame.
The internal POSH and grievance committees have no functionality under the shadow of Government exemption.
The Monster of IT & BT Mr Priyank Kharge that the exemption remains in place until 2029.
This action of exemption would dump the entire nation in to ditch and economy growth to Karnataka’ state and economic competitiveness will be stake.
From India, Mumbai
Acknowledge(0)Amend(0)
Now it is an alarming question for the whole IT sector companies and the will go for lay off sooner or later days.
The long-standing exemption from labour law for the IT, ITeS and BPO company employees will have to suffer a lot.
The exemption under the 1946 Standing Orders Act speaks for the inception periods but not for longer duration.
The extension granted twice and permitting companies to operate without routine labour department scrutiny was a major flaw by the Govt.
This action of government is to ,provide free hand to abstain away from the legal frame.
The internal POSH and grievance committees have no functionality under the shadow of Government exemption.
The Monster of IT & BT Mr Priyank Kharge that the exemption remains in place until 2029.
This action of exemption would dump the entire nation in to ditch and economy growth to Karnataka’ state and economic competitiveness will be stake.
From India, Mumbai
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Risk Based Exemption From Inspection Under Various Labour Laws.pdf
Emergence of Labour Law.doc