The Hindu Business Line : Fate of neighbourhood shops when giant retailers march in

"IT sector is the only sector available to young professionals to jump into immediately after finishing studies. It is the silver lining in the job market."

Story so far: An unusual development that I witness is of unionisation at a neighbourhood BPO. The trade union leaders who speak before the assembled employees of `business process outsourcing' units emphasise the need for unions to counter employers who routinely flout labour laws. I wonder about the efficacy of trade unionism for the IT (information technology) sector.

Episode 151

Can the IT sector do without trade unions? That was the question I had wrapped with last week. "Trade unionism is a legacy of the past era and needs to be buried," writes Krithivasan. "In today's competitive environment, with globalisation and liberalisation, there can be no place for any disruptive forces such as unionism." Wonder how trade union loyalists would react!

"By and large, BPOs are oriented towards servicing overseas clients, where time element is crucial. In case the trade unions become aggressive, as they used to be earlier, the jobs may move to other countries. Then it is back to square one — unemployment. BPOs are in the process of evolving. With competition between them to retain talented workforce, better HR (human resources) policies will certainly emerge. Both for the BPOs and the employees, it will be `survival of the fittest'." Thanks Krithivasan for the forthright comments.

"Dear daughter Swati, after a long gap I once again decided to join issue with you," writes M. Thangavelu, Chennai. "Union in IT sector! Right now, it is the only sector available to young professionals to jump into immediately after finishing studies. It is the silver lining in the job market after the depressed situation that prevailed for more than a decade. Why should people want to kill the goose that is laying golden eggs?" Why? "The reason is simple. Say there are 50 lakh people in the IT sector. If 50 per cent join the union, the unions can collect a monthly fee of Rs 20 or Rs 30. So the monthly collection will be approximately Rs 5-7.5 crore, which the so-called unions desperately need to survive; their members are dwindling because of fewer additions in the manufacturing and other sectors." Interesting logic.

"There were days when employees were mostly uneducated, exploited by employers. There were reasons for having unions then. And also we had selfless union leaders." How is the scene now?

"The new economy employers are well educated. Labour laws are stringent. Hence there is no need for unions. In the better educated sector of IT, companies themselves take care of the employees, because of the high attrition rate. The Labour Department of the State Government can perform periodical inspections to ensure that employees are given their due benefits. Similarly, checks can be in place to ensure the proper accounting of PF (provident fund) deductions."

Thangavelu says that it would be a great service to youngsters if big companies did not insist on experience certificates. Why? "Because most of the smaller companies that engage these youngsters do not give them appointment orders even after two years!" In sum, his suggestion is "Union no, monitoring strictly by Labour Department, yes."

Next is a mail from Tanuja Reddy who stumbled upon an earlier episode when searching for LPO-related news. That must be the piece on legal process outsourcing, sometime ago. "Hi Swati, I am a resident of Hyderabad and working for a law firm. We are a start-up in LPO." Great! "We are planning to provide high-end services like IPR (intellectual property right) — patent search and application drafting, IPR portfolio management, TM (trademark) and copyright registration and protection, contract drafting and management, litigation services, legal and business research, and document reviews. Also, low-end paralegal works like legal transcription, litigation support, legal coding and document management." Keep in touch, Tanuja. All the best!

"Hi Swati, this is Saravanan from Tiruchi, working in a BPO (Chennai). BPO needs union because many BPOs today work outside of the labour law. For example, in my BPO, if a person works nightshift, he/she will get nightshift allowances, whereas in some companies, no such allowances are given." How bad!

Saravanan's mail also talks about low level of security, especially for women who work night shifts.

"They don't get security — neither inside nor outside the office. If we want to reduce these problems the Government should draft a separate law for BPO employees. The sector has been contributing to the country's economic growth, and providing employment opportunities. For this reason at least we should create a separate law." Hope our policymakers are tuned in.

"Dear Swati, while it is true that team associates in the IT sector do not have formal structure to address their concerns, one should be aware that the key issue here is people, or in other words, the knowledge economy, rather than a machinery or product." Thus reads the mail from Sriram Kannan.

"When India is facing a realistic growth in the IT and IT-enabled sectors for the past few years, any action that could stifle or enhance the explosive growth rate should be taken only after proper consensus has been arrived at," he cautions.

"The nature of concerns faced by the people in the knowledge economy is totally different from what is seen in sectors such as manufacturing, electricity, oil and gas. Today, when most IT companies are luring the best of the minds through attractive incentives such as work-from-home option, extended maternity leave, etc, it has become imperative that the union issue in the IT field be handled in a more mature manner." So, what should be done?

"With IT hogging so much attention over the past few years for all good reasons, it would be a shot in the arm for the anti-outsourcing pundits if India goes all the way in registering and legalising IT unions," warns Sriram. "When we have prestigious institutions such as Nasscom, CDAC, and TRAI guiding India's growth seamlessly through the IT highway, it would be better if these institutions are involved in the decision-making process and a proper framework arrived at for the benefit of the industry and the country." Thanks!

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At the petty shop

The week has been rife with retail news, more so in my neighbourhood. A new supermarket was launched with great fanfare. It is adjacent to Mani Kadai, a petty shop that used to be my college-day hangout. One afternoon, I went to meet Mani and ask him how his business was taking a hit because of the new supermarket in the vicinity. But contrary to my anticipation, Mani was cheerful, what with so many customers at the shop, buying one thing or the other.

"Aren't you afraid of the big retailers?" I asked him, pointing to the new supermarket. Mani laughed at my question. "No, Swati, not at all! It can be the other way about," he said, again laughing, but louder this time. Seeing my puzzled expression, he proceeded to explain: "They may have money power, but we have public support!" I didn't have to ask him how, because there seemed to more customers coming by the minute, one asking for pen-torch cell, another picking up bread. Be it cell-phone recharge card for Rs 10 or the latest English magazine, be it the best Ponni rice or the finest date-fruit from Iran, Mani had them all in his small shop.

Stock was always fresh, thanks to quick turnover. Sipping a soft drink, again bought at Mani's, I pondered over his statement. Will the neighbourhood shops continue to flourish even after the giant retailers begin marching down our streets? Send in your thoughts by Friday.

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