Will the techies raise the red flag?

Gopal Sundarajan, a 38-year-old techie, was leading a good life. The mechanical engineer had passed out of Vellore Institute of Technology with distinction and then landed a job in Tech Mahindra. In nine years, he moved up the ranks to become Senior Applications Engineer, managing prestigious clients like British Telecom. He drew an annual salary of ₹50 lakh, drove a premium hatchback and lived in his own 2BHK semi-premium villa in Bengaluru. Life was relatively smooth sailing.

That was till April 21. In the morning “an HR executivecalled me for a meeting,” he says. As he entered the room there were two people, dressed in sharp formal attire, waiting for him. “The air was tense but I initially thought that they were here to inform me about their inability to add more staff to my project,” Sundarajan recounts.

The lady first spoke. “Your role is no longer suitable and you will have to put in your papers,” she said coldly. Sundarajan was taken by surprise. While his first reaction was calm, he asked both of them whether he is being laid off. “They did not answer me directly,” he says.

The lady was doing majority of the talking, and said his skills (in software such as Unix, database management, Java etc.) were not relevant for the company. The person next to her maintained a stern look through out the meeting. “It was intimidation: resign or we will sack you,” he says.

Sundarajan is not alone. Pallabi Dasgupta (names of employees have been changed as requested), another employee in India’s $155-billion IT sector, was the first software engineer in her family. “I was put on the bench for five months. Every week, I would go to ask my project manager whether I could work on projects. He would turn me back every time, despite my good ratings (for previous projects),” she says. Soon enough, Dasgupta was asked to resign earlier this year.

Sundarajan and Pallabi are among the several thousands of employees who have been terminated from the Indian IT sector in last one year. While there is no reliable number on how many have got the payslip till now, according to McKinsey, 2 lakh ITengineers will lose jobs annually in the next three years.

The job losses, and the increasing fear that more is in store, comes at time when changes in the technological landscape and macro economic factors have put the brakes on growth rates of most of the IT companies. Apart from HCL Technologies, other companies like TCS, Infosys, Cognizant and Wipro have not met analysts’ growth expectations.

The angst of what employees call “unfair dismissal” is starting to find a sound board — a union or association. Both, Sundarajan and Pallabi have approached Forum of IT Employees (FITE) to air their grievance. The FITE, with 2,000 members from about 50 IT and ITeS companies including Accenture, Cognizant Technology Solution, HCL, BM, Infosys, Tata Consultancy Services and Wipro, claims to be the biggest association in the sector. Others like All India IT Employees Association (AIITEA), National Democratic Labour Front (NDLF) are also championing the cause of aggrieved employees in the sector.

Chennai was always considered a safe haven for the information technology industry. A conservative society meant that companies located here reported one of the lowest attrition rates in the sector.

However, this 'conservative' reputation has taken a turn. The FITE, which is based in Chennai, is in the process of becoming India’s first trade union in the IT sector. Its agenda is simple — to protect interests of thousands of employees facing the lay-off threat. Formation of an IT union could possibly rattle the industry that has 4 million employees and managed to keep off any kind of union activities. Till now.

The first murmur of a union in the IT sector started in 2007, around the time when signs of sub-prime crisis started to emerge in the US. At that time, the BPO sector, which speeded India's ascent as a software giant was laying off employees in droves. R Karthik Shekhar, a former IBM employee started Union for Information Technology Enabled Services (UNITES), as part of Union Network International, a Switzerland-based group created to organise white-collar workers around the world. While the cause was noble, it did not take off and UNITES no longer exists.

In recent months, the momentum to form a union picked up with threats of mass lay off in many companies, including Cognizant Technology Solutions, Infosys and Wipro, over non-performance issues. It hasn’t helped that some of the employees, especially those in the middle-level management, might find themselves out-of-sync with emerging technologies such as automation, cloud and software as a service. But in the name of non-performance, these employees are being sent out, said an employee of Cognizant. Another employee from Wipro said that employees on the bench were asked to leave without being given the stipulated notice period time of two months. The two employees requested anonymity.

The movement for a union got a boost when in 2015, Sasirekha Natarajan got her termination by TCS revoked by the Madras High Court. This was followed in June 2016, by the Tamil Nadu Government stating that IT employees can unionise, and that employers come under the Industrial Disputes Act (IDA).

The clarification came in the context when some of the info-tech companies, including L&T Infotech, withdrew offer letters from new recruits. Along with the FITE, labour groups such as Puthiya Jananayaga Thozilalar Munnani (New Democratic Labour Front) took up employees’ cases and campaigned for unionisation of ‘white-collar’ workers in this sector. The provisions of IDA provide immunity for factory workers, classified as 'workmen'.

As of now, people working in the IT sector are not classified as workmen. “Duties that require imaginative and creative mind cannot be termed as either manual, skilled, unskilled or clerical in nature,” according to a judgement delivered by former Delhi High Court Justice Madan Lokur in 2004. The Labour Front clarified that the IT industry is not exempt from the provisions of the Industrial Disputes Act, 1947 and that affected employees can approach labour conciliation officers to redress their problems regarding retrenchment, termination or any other grievance.

In the last week of May, the FITE rallied around “laid-off” employees, signed petitions and has approached labour ministers from Tamil Nadu, Telangana, Maharashtra and Karnataka. “These are illegal terminations,” says Vasumathi, the FITE Vice-President. He terms the lay-off illegal because notice period was not given to employees. He also alleged harassment from the HR and misconduct of reporting managers.Others add that management of companies haven’t given a roadmap to employees, who have been axed suddenly.

Other associations have joined the fray. Syed Muqeemuddin, an IT employee runs the AIITEA. It looks at a range of employee-related issues — such as denial of relieving letters, workplace harassment and denial of severance pay. “Majority of the cases can be resolved if the employees know their rights. The management never helps them and this is where a watchdog is needed,” says Muqeemuddin.

Clifton D Rosario, State General Secretary, All India Central Council of Trade Union (AICCTU) said that the bigger issue is around the fact there is a need to re-look labour laws in the software services sector.

These developments have found backing amongst some of the industry titans. Infosys co-founder NR Narayana Murthy has come in support of the IT employees saying that it is not fair to send someone home. “I have no doubt that the leaders are well-intentioned people and can find solutions,” he told a television channel.

Emails sent by BusinessLine to companies regarding their employee redressal issues did not elicit a response.

Industry watchers believe that a union can hamper the industry growth and that there are adequate checks and balances to tackle any issue. Former Infosys CFO, V Balakrishnan believes that these (union) talks always fizzles out after some point of time. “It has never sustained,” he told a news agency.

Others see this slowdown in the sector as a passing phase, like before. “The dotcom bust happened, later there was a financial crisis, but the industry continued to grow,” says Manish Tandon, CEO, CSS. According to NASSCOM, the sector grew by 8.6 per cent year-on-year.

Others also point out that the current scenario emerges every time the industry goes through these kinds of shifts due to changing technologies and macro economic conditions. With technologies such as AI and machine learning becoming popular, fewer people are needed. Vamsi Krishna, co-founder of online teacher aggregator Vedantu , opines that automation has been on the horizon and is now increasingly used by companies. Market watchers like Kris Lakshmikanth, CEO, HeadHunters India believe that because of changing technology, the most affected will be the professionals aged 35 and above. “It would be very difficult for them to get jobs," he says.

An official in a leading IT company in Chennai even claimed that there is a well structured HR system in place in all major IT companies with a good redressal system. “Companies have always been harsh on non-performers who face the axe. However, the only major issue this time is that the number is large,” he said.

Karnataka IT Minister Priyank Kharge told BusinessLine that the Government will be open to look into the state's IT laws. But “Nobody comes forward, yeh log kuch nahin karte ,” he says, referring to IT employees. Though a Centre subject, the State can rewrite laws or include provisions specific to the IT industry.

Employees are also confused. “While I need to fight for my rights, I am worried that joining union could hamper my prospects of getting a job with another company. I will be branded as trouble maker,” said a 38-year-old employee at Cognizant. He didn’t want to be named.

At the same time, many think they can get back to the job market by updating their skills. This optimism is part of the reason why not all techies are convinced about the need for a union. And majority of them fear getting blacklisted by the IT companies. Also, employees are ignorant about their basic rights as they are weary about lengthy court proceedings. “A lot of the cases we get are related to unfair terminations,” says Muqeemuddin.

There is also the issue of employee associations not being totally united. Recently FITE had to evict some members. “We are not here to disrupt business but find a solution together such as phased lay-off and fair metrics for their performance measurement,” says Kathir, the Bengaluru coordinator for FITE. Efforts such as distributing pamphlets, asking people to come together have not met with much success.

Meanwhile, Dasgupta and Sundarajan are tweaking their resumes and figuring out their next course of action. “I don't know how the future will turn out but will not give up the fight,” says Sundarajan.

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