Telangana Extends Exemptions for IT and ITES Establishments from Shops and Establishments Act

The Government of Telangana has issued a notification, GO.Ms.No. 5, dated June 7, 2024, from the Labour, Employment, Training & Factories (Labour-I) Department, granting a further four-year exemption to all Information Technology Enabled Services (ITES) and Information Technology Establishments operating within the state. This exemption, effective from May 30, 2024, is from specific provisions of the Telangana Shops and Establishments Act, 1988 (Act No. 20 of 1988). The notification, which constitutes delegated legislation, was published by authority in the Telangana Gazette, Part-I Extraordinary, on Wednesday, June 12, 2024. This measure aims to provide operational flexibility to the burgeoning IT and ITES sectors in Telangana, acknowledging their unique working models and global competitiveness. The exemption specifically covers sections 15, 16, 21, 23, and 31 of the 1988 Act, which typically regulate aspects such as daily and weekly hours of work, intervals for rest, spread-over of work, opening and closing hours, and holidays.

The core of the legislative action provided: “the Government of Telangana hereby exempts all Information Technology Enabled Services (ITES) and Information Technology Establishments in Telangana State from the provisions of sections 15, 16, 21, 23 and 31 of the Telangana Shops and Establishments Act, 1988 for a further period of four (4) years w.e.f.30.05.2024, subject to the following conditions:” This exemption is contingent upon strict adherence to a set of eighteen conditions designed to safeguard employee welfare while facilitating business operations. Key conditions include a maximum weekly working hour limit of 48 hours, with mandatory overtime wages for work exceeding this limit, and the provision of a weekly off for every employee. The notification permits the engagement of young and women employees during night shifts, provided adequate security and to-and-fro transport from their residences are ensured. Companies are also mandated to provide identity cards and all other welfare measures as per existing rules. Employees working on notified holidays are entitled to a compensatory holiday with wages, as per the proviso to sub-section (2) of section 31 of the Act. Furthermore, the notification stipulates detailed security protocols for transport services, including pre-employment screening of drivers, non-disclosure of women employees' contact details to unauthorized persons, and careful route planning to ensure women employees are neither picked up first nor dropped last. Companies are encouraged to provide security guards for night shift vehicles and maintain control rooms for monitoring vehicle movements. The exemption also grants general relief from maintaining various statutory registers in hard copies, recognizing soft copies as sufficient compliance, and mandates the use of Integrated Registers and filing of integrated Returns as per G.O.Ms.No.23, LET&F Department, dated March 24, 2016. The government retains the right to revoke the exemption at any time without prior notice if any of the stipulated conditions are violated, emphasizing that these conditions must not be detrimental to the employees.

The legislative intent behind this notification is to foster a conducive environment for the growth of the IT and ITES sectors in Telangana, recognizing their significant contribution to employment and economic development. The earlier legal position, governed by the unexempted provisions of the Telangana Shops and Establishments Act, 1988, presented certain operational challenges for these sectors, particularly concerning their 24/7 work cycles and global client servicing requirements. The exemption addresses these statutory limitations by providing flexibility in working hours and shifts, while simultaneously introducing new obligations for employers to ensure employee safety and welfare, especially for women working night shifts. This balanced approach aims to bridge the gap between traditional labor laws and the dynamic needs of modern service industries. The conditions imposed serve as enforcement mechanisms, ensuring that the operational freedom granted does not come at the expense of workers' rights. The policy rationale underscores the state's commitment to supporting the IT industry by adapting regulatory frameworks to contemporary business practices, thereby promoting ease of doing business and attracting further investment in the technology sector.

Keywords: Telangana, IT, ITES, Shops and Establishments Act, Exemption, Labour Laws, Employment, Notification, 2024, Employee Welfare

Geo Tags: India, Telangana District: Not Applicable