Analysis | Understanding Karnataka's Proposal For 14-Hour Workday

The Karnataka state cabinet has put on hold its proposal to extend daily work hours limits in the IT/ITeS sector to 14 hours a day. The government's proposal met with strong resistance from both the employees and their unions who defined the bill as an 'attack on basic rights of a worker'.

Later, to mitigate the situation, Karnataka's IT Minister, Priyank Kharge, explained to the media that he was unaware of the proposal as the draft bill was brought by the labour department. He, however, assured that more discussion will take place on it before it is approved.

The Karnataka labour minister, however, clarified that the government is evaluating the Bill 'from the labour department's perspective'.

The Karnataka State IT/ITeS Employees Union's (KITU) fear is that the amendment could allow companies to switch from the current three-shift system to a two-shift system, which might result in one-third of the workforce losing their jobs.

The National Association of Software and Services Companies (NASSCOM) also made it clear that it does not support the move. "All we have asked of the states and the central government is to consider some flexibility within this 48-hour limit. This would help companies with a pan-India presence to standardise their operations. In Karnataka, we had a similar discussion with the IT department a few months ago," a senior NASSCOM official issued a statement.

Government's Proposal

The new proposal is called the Karnataka Shops and Commercial Establishments (Amendment) Bill, 2024. Currently, the Karnataka Shops and Commercial Establishments Act, 1961, regulates the working conditions and rights of employees in shops and commercial establishments, which includes residential hotels, restaurants, theatres, and IT/ITeS companies.

Presently, Section 7 of the Act recommends that no employee would work for more than nine hours a day and 48 hours a week. The number of hours, including overtime (OT), must not exceed 10 hours a day. As of now, OT hours are limited to 50 hours in three consecutive months.

"In the proposed amendment, basic working hours will continue to be nine hours a day. The government wanted to change Section 7 to raise the cap on working hours and OT hours together to 12 hours a day and increase OT hours in three months to 125 hours. Since OT hours cannot breach 125 hours in three months, employees may need to work beyond 10 hours only on certain days. It is not possible for them to work 12-hour shifts every day, as the set limit ensures such extended shifts are not frequent," the source explained.

Section 10 of the Act says that the working period, including rest intervals, will not exceed 12 hours a day. The Karnataka government wanted to increase this limit to 14 hours.

"Introducing such a drastic change through government policy disrupts established work models. Uncertainty and confusion are likely to arise regarding project deadlines, workload distribution, and compensation for extended hours. Forcing compliance through policy changes could stifle innovation and demoralise the workforce," says Sunil C, country manager, Adecco India.  

Expanding Base

Interestingly, Karnataka wouldn't have been the first state to exempt IT/ITeS from the purview of the Shops and Establishments Act. In states like Gujarat, Telangana and Odisha, all IT, ITES and financial services establishments have already been exempted from the applicability of fixing hours of work, giving employers greater flexibility to determine the working hours of their employees. The exemption covers various sections pertaining to operating hours, work timings and safety and security, overtime wages etc.

According to a Karnataka GCC Landscape Report released on July 15, Karnataka will have about one million professionals working in GCCs (global capability centres) by 2030. There are about 5.70 lakh people employed in GCCs, as of now, the report said and Bengaluru holds an impressive 39% market share of the larger GCC market in India.

A source in Karnataka's IT-BT department says, "There was a call from the IT/ITeS companies to align the work hours here with the global shift of 12 hours. Our aim was only to provide flexibility to these industries that often operate round-the-clock...The government will always ensure that employees' rights and welfare are safeguarded, striking a balance between operational needs and employees' protection," the source adds.

For instance, the recent global Microsoft outage created significant operational challenges, and to make up for the loss, extra work hours would have helped to meet the deadlines. Moreover, GCCs' expanding base along with a vibrant start-up ecosystem in Karnataka requires added manhours.

Impact on Health

The KITU pointed out studies on the health impact of extended working hours among IT employees. "As per the report of KCCI, 45% of employees in the IT sector are facing mental health issues such as depression and 55% facing physical health impacts. Increasing working hours will further aggravate this situation," it said.

Presently, IT sector employees' work stretches to 10-12 hours during peak project delivery phases to meet increased demands. "14-hour work shifts are unlikely to be productive. Extended hours decrease focus, increase errors, and lead to burnout. Long hours are linked to health problems that reduce well-being and increase absences," says Sunil. He adds, "A sustainable solution should prioritise creating adaptable work models rather than simply extending working hours. This could involve exploring options such as remote work or staggered shifts to achieve efficiency without compromising employee well-being."

There are many studies and researches that say productivity does not necessarily increase when hours are lengthened, and that in many industries, it appears that shorter hours are associated with higher output rates per hour. Before coming out with any law that causes upheavals, the Karnataka government should consult all stakeholders for a realistic work boundary. Any impulsive government decision impacting the operation of IT/ITeS can backfire, with both the employers and the employees relocating to other cities that offer better support.