Cannot Work With 'Named Competitors' For Six Months After Resignation: Infosys Lays Out New Rule For Employees

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Cannot Work With 'Named Competitors' For Six Months After Resignation: Infosys Lays Out New Rule For Employees

Indian IT giant Infosys has come up with a new rule for its employees which has become a cause of worry for many. According to the new rule, Infosys employees who resign cannot work with 5 major competitors who have the same clients as Infosys, for a period of six months.

It has become a major cause of concern for Infosys employees and they are worried that it will curtail their options after resignation.

Also read: Infosys Witnesses Resignation Of 80,000 Employees: What Is Leading To The 'Big Quit'?

Some sources are suggesting that it is an attempt by Infosys to reduce the attrition rate which has stayed high for the last few years.

However, there are doubts over the long-term implication of this rule and new employees are uncertain about what it holds for them.

In a statement to Livemint, Infosys observed, “It is standard business practice in many parts of the world for employment contracts to include controls of reasonable scope and duration to protect confidentiality of information, customer connection and other legitimate business interests."

How Is It Being Implemented?

The employees first became aware of this new clause in the employment policy during the latest round of hiring. Infosys has created a steadfast rule which has been included in the offer letters of new employees.

The New Clause

"In consideration of the above, I agree that for a period of six months following the termination of my employment with Infosys for any reason, I will not:

accept any offer for employment from any customer, where I had worked in a professional capacity with that Customer in the twelve months immediately preceding the termination of my employment with Infosys.
Accept any offer from a named competitor of Infosys, if my employment with such Named Competitors would involve me having to work with a Customer with whom I had worked in the twelve months immediately preceding the termination of my employment with Infosys.

Also read: 60,000 Openings For Capgemini Recruitment In FY23; Guide To Landing A Job In Capgemini India

The Named Competitor

Under the so-called 'named competitors', Infosys has named 5 companies with which companies cannot work for 6 months after resigning from Infosys. We have listed them below:

TCS
IBM. Cognizant
Wipro
Accenture

However, Infosys clarified that this clause will only apply if the company where an employee is joining has the same clients as Infosys.

Why Is Infosys Doing It?

According to reports, Infosys is experiencing high attrition rates over the last few years. The attrition rate at Infosys is currently as high as 27%. In fact, all the major IT companies are witnessing this trend where newly joined employees are leaving in search of better opportunities.

Infosys non compete clause comes in on back of rivals poaching

Replugging my @livemint story on IT attrition on who is taking @Infosys & @TCS employees.

Non compete clauses may become industry norm in IT but can they be made legally viable ? @sruthijith @deborshi @ranjanir_ https://t.co/NmVX3i9Zp7
— Devina Sengupta (@DevinaSengupta) April 20, 2022

Reactions

After the news became viral and complaints started pouring in from Infosys employees, the Nascent Information Technology Employees Senate - an organization working for the welfare of IT employees, filed a complaint with the Ministry of Labour & Employment.

“The contract of employment is likely to affect the employee’s means of procuring a livelihood for himself and his family. The restraint being put on employees is greater than necessary to protect the employer, is unduly harsh and oppressive to the employee”, the complaint highlighted.

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Edited by

Shamik Banerjee

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