Reflections IT Unrest and Closures in 2014 ER Part 3

Reflecting on past events is essential. It tells us trends. And very different points of view. It also points to issues before us. And hopefully it helps us learn and find a better way ahead. “Follow effective action with quiet reflection. From the quiet reflection will come even more effective action” said Peter Drucker.
So let us review the ER in 2014. This is the third part in the series of blog-posts.
[This review is being published in parts. The fourth part will be published in two days.]  
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. Ms Renjini Mary Joseph [a Tissian settled in Johannesburg] sent this message to me:
Hello Patwardhan sir: Hope that you are well. Although I don’t respond to your blogs, I am an avid reader of them (whenever I get some time, that is). It’s quite sad that I don’t really follow all the Indian labour news though, simply because I am trying to catch up with South African labour law and incidents here. However, the TCS incident has triggered some serious thoughts in my mind. I have been following the incident quite closely. I saw the link that you shared and I wanted to know where you stand, sir. I know both sides of the story, the organisation that needs to bring in fresh thoughts, and more billing and therefore, senior personnel can be fired. I heard they are hiring 55000 freshmen. But what about the people – 25000 people who served the organisation for 10 years or so; what about the reputation of the brand? The least they could have done was to be more consultative, let them know in advance so that they are better prepared, give these senior people an option of applying for the 55000 jobs at junior level. Also, what was HR doing? Their role in this is vital. Shouldn’t someone be held responsible for such a hasty decision? If it wasn’t a hasty decision, why this process? I feel this is totally inhuman. Am I missing something? I feel miserable, although I or anyone close to me has nothing to do with this. 🙁 I would love to hear what you have to say about this?
You can’t keep quiet after receiving such an appeal. So here are my views, and I am aware that there can be many facets of the issue. So readers are welcome to leave their view in the 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 ‘lay-off’ it means retrenchment in Indian labour Laws. Lay-off word is borrowed from USA, it has a different meaning here.
TCS has decided to retrench 25000 of their techies. That’s one report. And TCS says it is just 3500 who are asked to go!
The problem is on four counts [a] the number getting retrenched is very large, it is bound to recoil on TCS, [b] the stigma of being labelled ‘under-performer’ and the associated fear that they may not get a job elsewhere, and [c] since it is unprecedented, there are rumours of the real reason being something else, not really the weeding out of under-performers, [the memories of Satyam are still fresh in the minds of people] and left as a food-for-imagination of rumour mongers, [d] what should IT organisations do if they have a downturn, or wish to shed people not-adequately-skilled.
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. [See myblog post].
Here is a news report:
CHENNAI: Apprehending unrest in the Indian information technology (IT) industry, New Democratic Labour Front (NDLF), has joined trade unions like the left-wing CITU, right-wing BMS and the Congress-backed INTUC wooing IT employees.
NDLF inaugurated its IT Employees Wing on Saturday and urged techies to join them to achieve collective bargaining strength. “Almost 10,000 IT employees have engaged with us through the web and telephone. We want to urge these employees to join the IT union started by us for their benefit,” P Vijayakumar, state treasurer of NDLF and co-ordinator of the IT employees wing said.
Going by the account of removal finding publicity, this has not been handled well by HR, at least in some cases. There is a rumour that over one hundred HR personnel also have been removed! Phew!!
The antiquity of labour 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 organisations 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.
Labour laws of this country deny that flexibility. And those laws essentially made keeping realities of manufacturing sector in mind may be [perhaps they are actually] 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 labour laws which will be based on new age business realities.’  
Let us watch Renjini, this is certainly a defining moment for IT industry.
We once again begin taking stock of the ER events in 2014. The earlier parts have covered strikes and lockouts, and this part covers closures.
For those readers who are interested in reading more on closures, I would suggest them my earlier blog post The End Game: The Inner Game of IndustrialRelations  
Two stories on closures gripped the ER scenario – Nokia and Foxconn. A closure hits earning of [usually] the breadwinner so it hurts people very badly. While newspapers cover the stories cryptically, very few articles cover the impact as felt by people – a sociological angle.
There was an exception. Read the Nokia story in Business Today. Here is the Link. Death of a dream 
Frontline story observed,
‘On October 7, the Nokia management announced that its plant at Sriperumbudur on the outskirts of Chennai would “suspend its operations” with effect from November 1. It has transferred most of its production work to its facility in Vietnam. As many as 5,700 of its 8,400 employees in the plant, 3,800 of them women, had been forced to take the voluntary retirement scheme (VRS) offered by the company.
Many of the workers, the majority of them women, had no other alternative but to accept it. About 10,000 others, who are indirectly employed, have also been laid off. Today the facility has 1,100 workers, including a few apprentice operators, on its rolls. These are people who refused the VRS offer. They face an uncertain future.’
Nokia was like a woman who is deserted by her husband and shunned by father – [or Amma!].
Almost 50% of Nokia’s workers were women.
While Nokia Union chief attempted suicide, [Nokia India employees union chief attempts suicide] workers also alleged that the union leaders were nowhere to be seen when VRS was offered and gates were closed.
While Nokia handled the issue of closure with some sensitivity, Foxconn showed its characteristic style. The company announced suspension of operations from Dec 22 although the actual date as announced earlier was Dec 24.
Since 70% of parts manufactured from the facility were served to telecom major Nokia, the closure was imminent. That meant 2500 workers were going to be rendered jobless! Not to mention those in the ancillary units.
While sympathies of people are for the employees of Nokia and Foxconn, such was not the case initially when Kingfisher nosedived [that’s what Kingfishers do!] in 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 that followed.
The women employees of Kingfisher wrote and 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:
….. …..We understand corporates like you feel elated by looting public banks and other institution but why you never thought twice before denying us our wages…..
Is it not true that some of the cabin crews were forced to serve in your nasty parties and your guests like you use to misbehave with them and whoever didn’t agree to this she was tortured and harassed. If this is not true please come forward and deny this in front of the whole world…..
….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 then come and meet us and have a first-hand look at the kind of lives that we are leading. It will surely then make u 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 the IPL players.
Vijay Mallya will never understand the plight of the employees, his name will go down in the history as the man who destroyed an industrial empire carefully built by his illustrious father.
Looks like Spice jet is also suffering from the Kingfisher disease. This story is still unfolding and I wonder if the end will be any different.
Finally Hindustan Motors called it a day. Nobody shed tears. They suspended operations in May and offered VRS to its 2600 workers in November. In May 2014 the wages were not paid for six months. This closure would not have been surprise to anybody.
While industry must survive so also the people for whom 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.
So much about the IT industry’s woes, and some heart-breaking stories of closures. 
Before we stop here in this second part, here is a food for thought:George Eliot says, “In every parting there is an image of death.”[You may recall here that the late Justice Mr Krishna Iyer labelled termination of service of an employee as ‘economic death.’]  
And I will reach out to you in the fourth part to continue this review. What’s your response to this blog-post? Do write, your comments will further learning of ER professionals.
Wishing you a very Happy New Year,
Vivek S Patwardhan
“What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others.”