TCS agrees to settle lawsuit with ex-staff, to pay $29.8 million

Tata Consultancy Services (TCS), India's largest software services exporter, has agreed to settle a suit filed by two former employees alleging violation of certain rights of its non-American workers in the United States. The company has agreed to pay a sum of $29.8 million for settling the matter.

The case against TCS was filed by two of its former employees — Gopi Vedachalam and Kangana Ber — who were sent from India to the US. In 2006, the two former employees accused the company of forcing all non-US workers to sign over their US tax refund cheques back to the company and also that TCS deducted Indian salaries from their compensation.

The terms of the settlement are described in a February 21 filing with US District Judge Claudia Wilken in Oakland, California. The California Federal Court in April last year had permitted the class-action suit which alleged that TCS and its holding company Tata Sons breached employee contracts by wrongfully withholding wages and violating the labour laws of California between 2002 and 2005. The employees claimed that the firm had promised to pay them their gross salary in dollar terms and a separate Indian salary during their stay in the country.

In an e-mail response on the settlement, a TCS spokesperson said, "TCS believes that it always acted appropriately notwithstanding the allegations in this case. The company has admitted no wrongdoing and none has been found by the court. It agreed to settle this matter to eliminate any on-going distraction to its associates and management."

The North America market accounts for 52.6 per cent of TCS revenue according to its third quarter results data and has over 18,000 employees working in the US.

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