HC: IT, ITeS cos not in Shops Act

The Telangana High Court has said that IT and ITeS companies in the state do not come under the purview of the AP Shops and Establishments (S&E) Act 1988, which was adopted by the Telangana state government after bifurcation.

Justice P. Naveen Rao of the Telangana High Court said that the authority constituted under the S&E Act or the labour commissioner are not vested with powers to adjudicate on disputes over termination of employees in these firms. He recalled that the Government Order (GO) No. 5, issued by the information technology and communication department on January 28, 2002, which notified the IT policy, had excluded ITeS and IT establishments from the purview of the S&E Act. He said that given the contents of the GO, employees of these firms will be barred from instituting an appeal before the authority against their termination.

Justice Rao said that employees whose services have been terminated by such companies will have other legal remedies and their rights will be protected.

The judge was dealing with a petition filed by Cognizant Technology Solutions India Pvt Ltd, challenging the adjudication power of the authority under the S&E Act or the assistant labour commissioner who had directed the company to pay allowances to its employees even after termination.

Cognizant argued that the authority has no power to adjudicate or deal with the issues related to IT companies, by stating that they were exempted from the S&E Act. It also highlighted GO 16, issued in 2002, which notifies exemptions from several provisions of the S&E Act to IT companies.