Infosys faces backlash over new clause restricting employees from finding a new job

• NITES union has lodged a complaint against Infosys seeking removal of their newly imposed non-compete clause.
• The clause bans the employees to work in the competitors for six months after they quit the company.
• The companies included in their competitor list are — Accenture, Tata Consultancy Services (TCS), IBM, Cognizant, and Wipro.

An information technology (IT) union has reportedly filed a complaint against the Indian multinational IT major Infosys, on April 20. The Nascent Information Technology Employees Senate (NITES) union is seeking to remove the non-compete clause, which states that the employees cannot work for the competitor companies for six months after leaving the company.

The clause also forbids the employees to join the workforce of the clients they had worked for in the last 12 months before quitting, according to the letter to minister Bhupender Yadav.

The clause includes these companies in their competitor list — Accenture, Tata Consultancy Services (TCS), IBM, Cognizant, and Wipro.

“For the period of six months after leaving Infosys, employees will not — accept any offer of employment from any customer, (with whom I worked) in the twelve months immediately preceding my termination or accept any offer of employment from a Named Competitor of Infosys, if my employment with such Named Competitor would involve me having to work with a Customer with whom I had worked in the twelve (12) months immediately preceding the termination of my employment with Infosys,” the clause says according to the letter.

The letter was written by the NITES union president, Harpreet Saluja, to the minister stating that the clause violates Section 27 of the Contract Act.

“They are likely to affect the employee’s means of procuring a livelihood for himself and his family. Hence the company should be stopped from enforcing it,” read the letter.

Recently, Infosys also witnessed the highest level of attrition rate in the company as compared to its competitors. Its attrition worsened in the January-March quarter reaching 27.7% from 25.5% in the previous quarter.

However, the management at Infosys said the attrition rate has come down on a quarterly basis as against the LTM (last twelve months) data disclosed. Moreover, it expects the attrition rate to decline gradually as it also kicks off hikes from April 1.

The company is looking to hire more than 50,000 employees in FY23 as against the 85,000 hired in FY22. Infosys has an employee base of 3.14 lakh, which is half of what TCS has.

The company’s net profit for the March quarter rose about 12% to ₹5,686 crore with revenue growth of 22.7% year-on-year at ₹32,276 crore.

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