It’s sunshine for Tamil Nadu IT employees as the Tamil Nadu government has clarified to the Tamil Nadu High Court that IT/ITES employees can form trade unions.
The clarification came in a case filed by the NDLF (National Democratic Labor Front) - IT Wing on behalf of laid off employees. The government reiterated that IT/ITES employees can seek remedy under Section 2(k) of Industrial Disputes Act (1947) after becoming members of a trade union. This is a welcome clarification by the Tamil Nadu Government, after a prolonged silence on this issue. Kudos to the NDLF for taking such a stance, and making efforts to bring to light the plight of suffering software employees.
In an interview to Moneycontrol website on June 10, Mohandas Pai, former board member, Infosys, had commented on the TN government’s clarification that 'labor laws are applicable to IT employees' are in bad taste. Similar views are being heard from senior managements of IT majors.
Let’s look at the concerns raised by Mr. Mohandas Pai and analyze if they really are a threat to IT Industry.
Unnecessary Regulation?
In his interview, Mr Pai had mentioned “unnecessary Regulations”. Can Mr Pai call the labour laws of European or American countries “unnecessary regulations”? IT companies in India have been enjoying many tax exemptions, nominal electricity charges and special provisions to establish their firms. But these companies don’t want to follow any labour regulations/laws of the government. All such benefits are exclusively given by governments to companies only for the sake of employment generation. If the companies are tampering this very objective, then governments are also not under the obligation to pamper them. The Tamil Nadu Government has realized this situation and has clarified on this matter at a crucial time.
Labour laws not only protect employees, they give detailed guidelines that will help and benefit the employer as well. Management people like Mr Pai should understand that.
Attrition
The reason mentioned by Mr Pai for non-requirement of labour laws for IT employees, ie “15-20% attrition”, is the very reason that IT employees need labour law protection. When Mohandas mentioned “attrition”, he should have clarified which attrition he was referring to. Was it “voluntary attrition” or was it “involuntary attrition” (forced resignations)?
According to a survey conducted by CiteHR, voluntary attrition due to employees' personal reasons, family issues, location preferences, peer relationships account for only 8.03%. Whereas 91.97% of the voluntary attrition is due to organizational factors such as compensation, job profile and Supervisors & Line Managers. Substantial percentage of the survey showing managers being reasons for employees' exit indicates that managers do not meet the expectations of employees'. “Employees don’t leave the company but they leave their managers”. Unfortunately, many IT companies are not able to address this and take the lead in training managers and nurturing manager-employee relations.Another factor is antiquated HR policies. Many a time, HR personnel are reluctant to pay attention to employee grievances. Most grievances are related to partial appraisals, meagre pay hikes, workplace harassment and sexual harassment. It is natural that employees will be dissatisfied and de-motivated if their concerns are not addressed efficiently. This ultimately leads to increased attrition.
Compensation and job profile are also big factors that affect attrition rates. It is the senior management’s responsibility to enrich job profile and compensation. But with market pressure, global recession, tough competition and lacklustre economy, companies are forced to implement uneven compensation policies. This creates gaps in productivity and performance of employees, resulting in higher attrition rates. Mr Pai may not have taken these factors into consideration before accusing employees as the sole reason for attrition.
Lay-offs
When the law defines “lay-offs” and specifies guidelines in executing a “lay-off”, it would be a challenge for IT companies to illegally terminate employees in the name of self-coined corporate terminologies such as “workforce optimization”, “involuntary attrition”, “Project Chrome” and what not.
According to the Industrial Disputes Act “Lay-off” is done when the company reports losses. When employees are laid off, it is done on a last-come-first-go basis. When the company attains financial stability and starts re-recruiting employees, those who were laid off should be given preference and taken back to work.
TCS attempted to illegally terminate jobs of 25,000 employees in 2014-15 masquerading it as “lay-off”, and announced that it would recruit 50,000 freshers in the same fiscal year. If this would amount to anything, it is “Human Resource Exploitation”. Apart from this Illegal job termination or forced resignations, overnight company shutdown, non-payment of salaries, non-remittance of Income Tax, sexual harassment, physical assault on employees and many other cases are reported consistently to Forum for IT Employees (F.I.T.E.).
Job Offer not a Job Agreement
Mr Pai also blames candidates for not joining companies after offer letters have been issued and so reasons that they need not have legal protection. He should understand that it is “Job Offer” and not a “Job Agreement”.
When managements go to clients with proposals, some are lost. Can Mr Pai ask the same question to the clients who rejected his proposals? Clients chose the better proposal. The same way, students/employees chose the better offer.
What answer has he got for the 1,500 students who had been issued “offer of intent” letters by L&T Infotech and who were informed that it was not “legally binding” for the company to give them jobs. Student in engineering colleges getting selected in one interview during campus placements cannot appear for any other interviews – a situation which works well for colleges to boast of 100% placements. After being let down by the colleges and L&T, the students were organized by Knowledge Professionals Forum to hold a hunger strike a few weeks ago appealing for their jobs. Do companies come forward to address their issue? Or can Mr Pai take personal responsibility on behalf of L&T Infotech and ensure that stranded students get an opportunity in some other company? This is not just the story of L&T Infotech but also companies such as Flipkart, Portea, InMobi etc. In 2013, students protested after a similar offer letter scam done by HCL.
In a country like India there is always cut-throat competition in the job market. In fact the entire job market in India is thriving on the young workforce having different skill sets and diverse backgrounds. As unemployment has been growing, no candidate will be ready to lose a job after getting an offer. Then who do we blame? Job seekers or employers? It is left to Mr Pai’s conscience.
Exploitation of Labour
Since its inception in India, the IT industry has been recording two-digit growth. More than 3.5 million employees are employed with annual revenues touching $100 billion with a target of reaching a whopping $300 billion by 2020. This became possible because outsourcing shot up from 25% in 1999 to 80% in 2014. This success is to be credited to the efforts of employees who toil day and night to achieve organizational goals and to put India at the top of the global business ladder. However, companies are not bothered about employee welfare. Most employees who work night shifts do not get sufficient night shift allowances. On an average, an employee will work 12 to 13 hours without getting overtime pay. Lack of regulations and intervention from labour department official’s allow exploitation of employees by companies. Given these circumstances, employees need minimum protection from exploitation in a 24x7 business environment. This is only possible through trade unions. It isn’t just companies who need legal protection but employees too need it, and even more so.
Happy with NASSCOM but not with Associations/Unions for Employees?
Companies are not only against employees forming unions, but also show the exit door to those who raise concern over red herring policies. But when it comes to the companies themselves, the situation is different.
NASSCOM is an industry lobby which exerts pressure on politicians and lawmakers to achieve results for the companies’ benefit. NASSCOM’s recent activities include lobbying on the US Immigration bill to safeguard the interests of Indian IT firms in North America. When employers have their own associations for their benefits, employees also have the right to form similar set up which is allowed by Indian law.
Trade Union - For the moral stability of employees:
The days of insulation from external intervention are over for IT companies. It is a myth that trade unions spoil the growth of the economy. In fact, gratified employees can achieve complete productivity and contribute their efforts to the country’s prosperity.
Employees of this new age sector - IT/ITES industry - definitely social security in the form of trade unions and labour laws such as the Industrial Disputes Act. This can be possible only through collective bargaining.
It is not the employees who are surviving at the mercy of IT giants, but the companies which are thriving on the abundance of qualified workforce in India. They cannot deny the rights of employees outright. That day has come now.
Forum for IT Employees (F.I.T.E.) requests Mr Pai and other top level management officials to watch the video below and join in welcoming the Tamil Nadu government’s clarification.
Let’s work together and make a win-win situation.
Editorial Team,
Forum for IT Employees (F.I.T.E)
fiteorg@gmail.com
Mohandas Pai’s response:
Responding to the open letter, Mohandas Pai said that “involuntary” attrition rate was “non-sense”. “Attrition is voluntary.” Asked about the FITE’s claim that the majority of attrition was involuntary, Pai said that it could not be more than 5-10%.
On companies’ lay-offs, Pai said that IT workers did not qualify as “workers” under the Industrial Disputes Act as they were paid around Rs 50,000. IT employees were officers, he said. Non-performers were relieved with an exit package of around Rs 1 lakh.
He agreed with FITE on its views that a job offer was an offer and not an agreement. “You cannot have it both ways.” If a person cannot be compelled to take up jobs, then neither can the company be forced to hire people, he said.
On FITE’s position that employees were exploited in the IT industry, Pai said no officer is paid over time allowances. He claimed that people who were in office beyond working hours were engaged in the gym or in non-working activities.
Responding to FITE’s argument that it was unfair that IT workers were not allowed to form unions while industry had its own lobby groups such as NASSCOM, Pai said: “Non-sense. It’s a stupid argument. NASSCOM does not bargain for its interests or class action. Trade unions are organizations which blackmail employers to precipitate action.”
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