Karnataka Budget 2017: Retirement age in private sector up to 60, IT, ITeS exempted

BENGALURU: Karnataka Chief Minister Siddaramaiah on Wednesday proposed to increase the retirement age of private sector employees from the present 58 to 60, leaving the captains of industry worried as they were hoping for more easing of labour regulations. The budget, however, did not talk of any major reforms in labour laws.

Bengaluru itself houses more than a million workers in technology and BPO sectors, and service sectors are known to hire workers on contract basis, and renew the employment contract on expiry on a need basis. Even public sector HAL has taken to contract hiring route. Its chairman T Suvarna Raju, at a recent press conference, said that the organisation has begun hiring engineers based on project tenures.

“Each company in the private sector has its own dynamics based on the industry in which it operates, and therefore, it is unfair to impose an extended age of retirement,“ said Shekar Viswanathan, vice chairman at Toyota Kirloskar Motor.

According to Madhu Damodaran, head of legal operations at Simpliance, a labour law compliance firm, Karnataka is well within its powers to mandate retirement age of 60 through standing orders under its existing state labour laws. He, however, clarified the retirement age regulations are not applicable to the IT and ITeS firms as they are exempt from following the standing orders by way of a notification.