Employee Trade Union In Information Technology Sector


What law says?

Industrial Disputes Act, 1947[1],

“The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations.”

“The provision for payment of compensation to the workman on account of closure or lay off or retrenchment”

  1. “The procedure for prior permission of appropriate Government for laying off or retrenching the workers or closing down industrial establishments”
  2. “Unfair labor practices on part of an employer or a trade union or workers”
  3. “The Industrial Disputes Act extends to whole of India and applies to every industrial establishment carrying on any business, trade, manufacture or distribution of goods and services irrespective of the number of workmen employed therein”
  4. “Every person employed in an establishment for hire or reward including contract labor, apprentices and part-time employees to do any manual, clerical, skilled, unskilled, technical, operational or supervisory work, is covered by the Act”
  5. “This Act though does not apply to persons mainly in managerial or administrative capacity, persons engaged in a supervisory capacity and drawing > 10,000 p.m. or executing managerial functions and persons subject to Army Act, Air Force and Navy Act or those in police service or officer or employee of a prison”

Government of India Union Ministry of communications says, Information Technology (IT) companies are functioning well and hence local state law will have to be used.

But, each state has varied views when it comes to unionizing IT sector. For many states till now, the IT sector has been completely against forming employee union in IT sector as against with the manufacturing industry

Tamil Nadu, Karnataka, Telangana states houses majority of IT companies employing over 4.5 Million people in India.

In Karnataka, which is the country’s largest technology hub, the state prohibits unionization at these companies. Also, IT sector will not come under industrial employment Act 1946. IT sector will be treated on par with “essential services”.


Tamil Nadu state has been under assumption that IT sector is not covered under trade union until things started to change after January 2015. Tata Consultancy Services (TCS) said it would give pink slip to non-performers. This created unrest. Industry experts and employees said TCS planned to sack more than 25,000 workers. But TCS media person’s statements said that it will send home not more than 3,000 as part of its yearly “workforce restructuring”.

Beginning of the year 2016, New Democratic Labour Front (NDLF), came forward and filed a PIL with Madras High Court requesting action to prevent such illegal practices by IT companies.

trade union

While responding to the court, Tamil Nadu government confirmed that the IT industry has not been exempted from the provisions of Industrial Disputes Act, 1947.

Kumar Jayant, principal secretary in the labour and employment department said[2],

“All the labour welfare legislations are applicable to all the IT and ITeS companies and they are being monitored by the enforcement officials for proper implementation of labour legislations and thereby ensures the welfare of the employees,” in a letter of May 30, 2016, addressed to Karpagavinayagam, organiser of NDLF.

“The IT company employees also are free to form trade unions and can redress their grievances through evoking the provisions of Industrial Disputes Act 1947.”

“In case of any contravention of the provisions of the Act, IT employee may approach the concerned conciliation officer through their union and file an industrial dispute against the erring employer,”

“The inspectors of labour department are inspecting the IT companies on a routine basis.”

This put off all the unrest as NDLF helped to get the clarification from Tamil Nadu government on forming trade union in IT sector.


For the past two plus decades, the IT sector corporates have been very hard on its employees. Prevailing pain areas in this industry such as illegal firing practices, denied right to form trade union, and long irregular working hours, Compensation Related Issues, Appraisal & Promotion Issues, Job Insecurity, High Stress Levels, unrealistic work load, and No Transparency.

Brining IT sector under provisions of Industrial Disputes Act 1947, and forming employee trade unions, the employees can reach out to the conciliation officers to address their problems any applicable grievances.


This blog has been created for education purpose only with high level information. This blog is not a comprehensive article which details about all nitty gritty aspects of this case and the law. Hence there might be any unintentional missed out information in the article.


[1] https://en.wikipedia.org/wiki/Industrial_Disputes_Act,_1947
[2] http://www.financialexpress.com/economy/tn-says-labour-norms-applicable-to-it-industry-staff-free-to-form-union/277981/

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