Karnataka govt further extends exemption to knowledge based industries

The Karnataka government on Monday extended the current exemption to knowledge-based industries in the state from the standing orders issued under the Industrial Employment (Standing Orders) Act, 1946, for an additional period of 5 years, thus continuing the two-decade-old practice.

According to a note by EY India, the earlier exemption given in May 2019 has come to an end on May 24 this year. The exemption from the standing orders is applicable to organisations covered under the IT / ITES, start-ups / animation / gaming / computer graphics, telecom, BPO / KPO and other knowledge-based industries.

The Industrial Employment (Standing Orders) Act, 1946, is an important labour welfare legislation as it governs a host of service conditions, including appointment, termination and dismissal. It also classifies workmen as permanent, temporary, apprentices, fixed-term employees; manner of intimating periods and hours of work, holidays, pay-days, and wage rates; shift working; attendance and late coming, among other things.

While the standing order is applicable to all industries, the Karnataka government has been providing exemption to the knowledge-based industries in the state from the applicability of standing orders in the companies since 1999, in a bid to promote the sector in the state.

However, the notification also clarifies that the exemption from standing orders is subject to the industries constituting an internal committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

“Organisations shall [also] constitute a Grievance Redressal Committee (GRC) constituting an equal number of persons representing the employer and employees to address any complaint / grievances of any of the employees. The organisation shall [also] intimate information about the cases of disciplinary action like suspension, discharge, termination, demotion, dismissal, etc. of its employees to the jurisdictional deputy labour commissioner and commissioner of labour in Karnataka,” the note by EY India reads.

The notification also clarifies that in case the Industrial Relations Code, 2020 (one of the four proposed central labour codes), is implemented, the said code will apply to all establishments.