Blog: Perils on the Employee Relations scene — Part II

Employee Relations

Perils on the Employee Relations scene — Part II

A look at closures by some noted organizations and how it reveals their respective employee policies
Perils on the Employee Relations scene — Part II

Reflecting on past events is essential. It tells us trends and very different points of view. It also points to issues before us. It might also help us learn and find a better way ahead. So let us review some of the events in employee relations (ER) in the recent past and see what they foretell for the future.

The TCS imbroglio. I was about to start penning my thoughts when the IT world ‘eruptions’ could no longer be ignored. HR people everywhere seem to have taken notice. Renjini Mary Joseph (a Tissian settled in Johannesburg) sent a message to me asking about my views on TCS layoffs and reported hiring of 55,000 freshmen. So here are my views, and I am aware that there can be many facets of the issue. Readers are welcome to comment; a good discussion will have a great learning value for all.

What is the issue? While the word used in many news reports is “layoff” it means retrenchment in Indian labor laws. The term “layoff” is borrowed from the US and has a different meaning here.

TCS has decided to retrench 25,000 of their techies. That’s one report. And TCS says it is just 3,500 who have asked to go! The problem is on four counts. First, the number getting retrenched is very large and is bound to recoil on TCS. Second, the stigma of being labelled ‘under-performer’ and the associated fear that they may not get a job elsewhere. Third, since it is unprecedented, there are rumors of the real reason being something else, not really the weeding out of under-performers. Finally, what should IT organisations do if they have a downturn, or wish to shed inadequately-skilled people?

Add to this the fact that union formation in IT/ ITES sector is simultaneously gaining ground. Readers will recall that UNITES has recently formed a Federation after registering the union in six states: Maharashtra, Andhra, Telangana, Tamil Nadu, Karnataka, Kerala. According to a news report, the New Democratic Labor Front (NDLF) has joined other trade unions in wooing IT employees.

Considering the publicity around the layoffs, the matter has not been handled well by HR, at least in some cases. There is a rumor that over one hundred HR personnel also have been removed! Phew!

The antiquity of labor laws is once again in the focus now, as also the issue of fairness in handling separations. While this entire issue of separations must be handled with sensitivity that it deserves, the fact also remains that business realities will force organizations to take steps to cut down the staffing. The scale is simply too big, mind-boggling actually, and the number will look large when some separations are to be managed.

Labor laws of this country deny that flexibility. And those laws, essentially made keeping the realities of manufacturing sector in mind may be woefully inadequate for the IT/ ITES industry.

It is time to “make in India” – what to make in India, Mr Modi? The answer is “suitable labor laws based on new-age business realities.” Let us watch, Renjini, this is certainly a defining moment for the IT industry.

Nokia. Two stories on closures have gripped the ER scenario — Nokia and Foxconn. A closure hits earning of the breadwinner, so it hurts people very hard. Most media reports have not addressed the sociological angle. Almost 50 per cent of Nokia’s workers were women. While the Nokia Union chief attempted suicide, workers also alleged that union leaders were nowhere to be seen when VRS was offered and gates were closed.

Foxconn. While Nokia handled the issue of closure with some sensitivity, Foxconn showed its characteristic style. The company announced suspension of operations from December 22 although the actual date as announced earlier was December 24. Since 70 per cent of the parts manufactured from the facility were served to Nokia, the closure was imminent. That meant 2,500 workers were going to be rendered jobless! Not to mention those in the ancillary units.

Kingfisher. While people sympathize with Nokia and Foxconn employees, such was not the case initially when Kingfisher nosedived (that’s what kingfishers do!) into deep waters. But that mood changed. The man who changed it was none other than Vijay Mallya. The public opinion was so much against him that nobody is shading a tear for his travails.

The women employees of Kingfisher wrote an open letter titled “Shame Mallya” to Vijay Mallya which found its way to the press, you may read the full text here. And here is a para I quote from it:

“Your plush lifestyle, ways and business ventures have been known to the world. It's laughable then to listen to your excuses. We wonder at times how a person can be so insensitive to human feelings and emotions. Mr. Mallya, if there is any shame left in you, come and meet us and have a firsthand look at the kind of lives that we are leading. It will surely make you realize that a human existence is far more important than breeding horses or running your emotions in the F1 track or playing your luck through IPL players.”

Vijay Mallya will never understand the plight of the employees. He will go down in history as the man who destroyed an industrial empire carefully built by his illustrious father.

Ambassador. Finally Hindustan Motors called it a day. Nobody shed tears. It suspended operations in May last year and offered VRS to its 2,600 workers in November. This closure would not have been surprise to anybody.

While industry must survive, so should the people for whom the industry is created in the first place. And we are at a critical stage where the government has the most unenviable job of balancing between the two.

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Topics: Employee Relations, #ExpertViews

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