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September 11, 1998


Task force recommends creation of 'sweat shops'

Email this story to a friend. The Prime Minister's Task Force on Information Technology has recommended that the Indian infotech industry be exempted from labour laws and allowed to operate longer hours.

This is aimed at making it competitive with its counterparts in South Korea, Taiwan, Singapore and the Philippines.

This Sam's not slowly
Motorola India
Sweat shops mooted
Madras police site
The suggestion has been made without consulting the labour ministry. In its second report, the task force has recommended that the IT industry be exempted from the Contract Labour Abolition Act.

At present, employees are obliged to give permanent status to an employee working for more than 240 days.

The task force, headed by Andhra Pradesh chief minister N Chandrababu Naidu has suggested that the temporary status of an employee could be 720 days in three years.

The report also suggests long daily working hours. In order to be able to run three to four shift operations, labour laws should allow up to 12-hour shifts without overtime as long as the total number of hours in a week averages the current norm of 48 hours per week, says the report.

In other words, an employee can complete his 48-hour quota in just four days. While this may be good for the IT industry, which can utilise staff better to meet sudden export demands, the recommendation does not take into account the spirit of labour legislation which is more concerned about the health of workers, labour leaders said.

Trade union leaders have protested against the move and described it as a first step by the government to satisfy industry's demand to totally deregulate the labour market.

"If they want the IT industry to be free of labour laws today, they will want to extent the benefit to the export sector tomorrow and then move on towards total deregulation of labour market," said W R Varada Rajan, a leader of the Centre for Trade Unions.

At the same time, the task force has advocated sweat equity to enable directors, promoters and employees of a company to get stock options at a 30 per cent discount to the six month average market price for contributing know how, intellectual property or value addition to the company.

It has also said the Companies Act should be changed to allow IT firms to increase the paid up capital by 10 per cent for allocating it to employees, promoters and directors as stock option without the approval of the AGM.

They should also be allowed to increase the pool of shares meant for stock options from 10 to 25 per cent with the permission of the AGM, it said.

Manufacturers must be allowed to downsize employee rolls by up to 10 per cent of the total employee strength of a company without permission, the report said.

- Compiled from the Indian media

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