NASSCOM seeks relaxation in state labour laws to help IT firms cut expenditure

NASSCOM seeks relaxation in state labour laws to help IT firms cut expenditure
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29 May, 2020

Amid deteriorating economic conditions, the National Association of Software and Service Companies (NASSCOM) has written to various state governments, seeking changes in labour laws to help IT firms cut expenditure during the Covid-19 crisis.

Recently, global technology firms such as IBM, Cognizant and HPE cut salaries and jobs to lower expenditure, as demand rebound seems unlikely in the near future, even after Covid-19 lockdown is lifted. 

“NASSCOM has made representations to different states on changes in labour laws, including some short-term measures such as a temporary furlough scheme, exemption from apprentice act (Apprentices Act, 1961) and some broader changes, such as defined working hours, leave policy, night shift obligations when employees work from home (and) self-declaration on compliances,” the association said in a statement to TechCircle.

The industry lobby has also requested state governments to make key changes in policies that are needed to enable the new workplace model, and allow both the employer and employee to navigate the current crisis and prepare for the future, it said.

Some labour policy changes require a 21-day notice to be given to state governments. 

The waivers or relaxations will benefit Indian IT firms such as TCS, Infosys, Wipro and HCL Technologies, along with multinationals with a substantial employee base in India, such as IBM, Accenture and Capgemini.

“Talent is the key strength of the IT-BPM sector and as a responsible sector, the industry is making all efforts to protect jobs, reskill employees, enhance employee engagement and attract new investment in the country,” NASSCOM said.

Currently, most employees in the sector are working from home, while some are getting back to offices in a staggered way, as recommended by the industry body. 

Some states are proactively looking at attracting new investments in the manufacturing sector and are changing applicable laws to build investor confidence, the statement said.

“We believe there is equally an opportunity for new investment in technology services and design and engineering solutions. Favourable policies, ease of business and skilled talent can be the three key pillars for attracting more investment in technology in the country,” it added.

NASSCOM has been working with the government and IT companies to help its members to navigate through the current crisis. 

Last month, it secured permission from the Department of Telecommunications (DoT) to allow IT and IT-enabled services (ITeS) companies to permit their employees to work from home till May 31. 

In April, the organisation sought financial assistance and other measures from the government for employees. NASSCOM requested that the government pay a partial salary to benched employees, extend the recently-announced provident fund (PF) benefits to include more employee segments and permit units that operate under the Special Economic Zones (SEZs) to work from home beyond specific extensions. 

The lobby body had earlier asked the government to allow for flexibility in specific policies for IT companies working out of SEZs and Software Technology Parks of India (STPI), as it was critical for business continuity. 

Its chairman UB Pravin Rao told TechCircle that Covid-19 was an opportunity for every industry and sector to reevaluate their digital transformation journeys.

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