Non-compete clause to ensure business confidentiality, says Infosys to centre

Bengaluru: The non-compete clause in its offer letters is to ensure business confidentiality and is a common practice among information technology (IT) companies in India, said in a letter dated May 24 to the deputy chief labour commissioner in New Delhi.

This came in response to calls for discussions on the issue after Pune-based labour union Nascent Information Technology Employees Senate urged the labour ministry in April to ask the Bengaluru-based IT services provider to remove the clause in its employment contracts.

Three calls for joint discussions between the parties turned out to be unsuccessful after Infosys’ executives skipped the meetings

“The purpose of the clause under discussion is to ensure business and client confidentiality. Moreover, the obligation is applicable for a very limited period only,” India’s second largest

IT services provider by revenue said. ET has reviewed a copy of the letter.

“Further, the clause under discussion is fairly common and standard business practice in employment contracts in the lT services sector in India. Candidates voluntarily agree to be bound by the obligations specified in the clause prior to joining the company, recognising the relevance and importance of such a clause,” said Santhosh K Nair, associate vice president in the human resource department of Infosys.

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Remis Tiru, the deputy chief labour commissioner, had forwarded the original complaints to state labour commissioners of Haryana, Maharashtra and Karnataka on Thursday.

“Further, as the appropriate government under the extant Labour Laws in the matter is the State Government, the matter is therefore being forwarded for further necessary action,” according to Tiru’s letter. ET has also seen a copy of the communication.

According to Infosys’ offer letter, an employee should not accept for six months an employment offer from “named competitors” such as

, and , among others, if the new job involves working with a customer with whom the employee had worked in the preceding 12 months during his/her stint at Infosys.

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