There are several reports of lay-offs in the IT industry. And there are comments on why unions are making foray in IT industry. But there is a missing factor in those analyses.
The reports show an alarming situation although some industry stalwarts have tried to play it down saying it only represents 4% or so of the employment. The numbers are alarming. Even if loss of job is [probably] not seen as negatively today as it was in pre-1990, it brings misery for the person who loses it, particularly in Indian context. Moreover, employees feel humiliation when they are labelled ‘poor performers’ following performance reviews and then removed.
Are Unions New to IT Industry?
All this plus a general gloom in the IT industry has made IT employees to seek protection by forming unions. Are unions new to the IT industry? Certainly not! Here is a photograph of the Labour Minister Mr. Bandaru Dattatreya speaking at a function when a Federation of IT unions was launched in Hyderabad. I was invited and I attended it too. That was more than two years ago! See my blog ‘IT & ITES Companies Must Conform to Highest Ethical Standards UNITES Conference’.
In the drama that followed when TCS retrenched employees and now when Cognizant did it, the Press has wrongly positioned union formation as a recent development. In fact, the report erroneously conveys it by the title ‘Tamil Nadu Techies Say They’re Moving To Form India’s First IT Union’.
Tamil Nadu Government clarified, “IT company employees are free to form a trade union and can redress their grievances by evoking the provisions of Industrial Disputes Act 1947. It is also informed that no IT industry has been exempted from the provisions of Industrial Disputes Act 1947,” Kumar Jayant, Principal Secretary, Labour and Employment Department, has said in response to a petition submitted by the New Democratic Labour Front – IT Employees wing (NDLF). See IT employees free to form union: Labour department .
TCS may not have a union today, but their employees were represented by RJ Mehta’s union for a long time, in the seventies and eighties!
Modern View and Traditional Response
The response of the IT Industry managers voiced by T Mohandas Pai was not just shocking but also disclosed lack of understanding of the issues involved. [The FITE has responded to this by a separate letter.] Here is the relevant excerpt from the interview. [verbatim transcript of Rahul Jain and TV Mohandas Pai’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18]
Mohandas Pai: Why TN allowing unions for IT cos is bad news
Latha: This news that Tamil Nadu has now said that the industrial disputes act applies to IT companies as well. The labour secretary clarified that yesterday to journalists. So is this going to be big bad news for IT companies?
Pai: I think it is a bad news for Tamil Nadu because in most states they have exempted IT industry from all this unnecessary regulations because an IT industry caters to the global marketplace and there we need certainty, we need 24×7 service because we do very critical work. If you don’t have proper legal protection for work to be done in 24 hours and you are susceptible to several demands from employees, then, it is going to be troublesome. [Mohandas Pai: Why TN allowing unions for IT cos is bad news]
The Missing Factor or the Real Issues in Employment Relations in the IT Industry
The real issues are completely missed by IT industry and also their analysts. In order to understand those issues, we have to understand three major trends:
First: The unions have lost their teeth. They are a spent force. Unions in India [I have been told by a Researcher and Labour Economist] are more powerful than those abroad in developed countries! In India the unions could not prevent closure of several industries, notwithstanding the fact that closures require Government permission. Opportunist union leaders who were in the trade only to make a quick buck have already deserted the unions. The unions have thus lost their ability to influence the political leaders and therefore the Government. When TCS laid off employees earlier, nothing much happened. People and IT employees alike think that Unions have become irrelevant in the post globalization era.
Second: IT Honchos like Mohandas Pai have sadly forgotten that building employment relationship is done consciously with a clear thought and a consistent stance. A student of Employee Relations knows that there are three ways of looking at the employment relationship, called the frame of reference. Alan Fox introduced the ‘frames of reference’ approach to industrial relations (IR) in which he argued that it is always possible to conceive the employment relationship in either one of two incompatible ways. Either it is a relationship of social membership which exists to satisfy common interests (the Unitarist frame of reference), or it is a negotiated, contractual relationship which exists to satisfy the interests of separate but interdependent groups (the Pluralist frame of reference). He introduced a third frame of reference, the Radical frame of reference, from the perspective of which the employment relationship is an entirely illegitimate relationship which exists solely to satisfy the interests of the dominant party.
Marico experimented with Unitarist stance in the nineties’. They created HR processes to support it. The IT industry wants to adopt Unitarist frame of reference but manage it [obviously like Mohandas Pai] with feudal mind-set. This will not work. The IT industry which places great value in communicating with employees ought to appreciate that the culture of ‘telling’ does not suit the new age industries. The HR Guru Edgar Schein insightfully points out ‘I label this a “Culture of Do and Tell” and argue that not only do we value telling more than asking, but we also value doing more than relating and thereby reduce our capacity and desire to form relationships.’ [The Humble Inquiry]. My friends in IT industry tell me that open house sessions or town hall sessions usually do not succeed in deepening conversations or understanding core employee concerns.
The real substitute of union [if the unions have become irrelevant] is in reaching out to employees with a view to be responsive to their concerns. Listening rather than telling! Responding rather than Instructing! Otherwise the IT industry managers will be reminded painfully that the Constitution of India guarantees Freedom of Association. Just as TN Govt did.
Third: And this is weird! There is a phobia, quite unjustifiable, among the HR Honchos about managing employee relations. I know at least three persons who told their prospective employers that they have no experience in employee relations and also would not like to handle it. The interesting part was they got the job nevertheless! While some skills are essentially required to manage employee relations, one has to appreciate that the core is managing relations and that’s the territory of confluence of HR and ER, the advice on labour law can be bought, and without that insight of managing relations no manager can have claim to the senior position in HR.
The missing factor is reaching out to employees, listening to understand, holding meaningful conversations and responding with speed. This is not easy when you employ several thousands of people.
Not easy, yes! But is there a choice?
Vivek S Patwardhan