Why IT unionisation is a non-starter

All together now Members of the New Democratic Labour Front during a protest seeking unions in IT companies.

TE RAJA SIMHAN

KV KURMANATH

TN government clarification that infotech workers are free to form labour unions does not count for much: even workers don’t want it
CHENNAI/HYDERABAD, JUNE 20:  Labour leaders, who have long been looking to unionise 30 lakh white-collar workers in the infotech sector, were recently spurred to action by a development that sounded to them like a clarion call for a workers’ revolution.
It happened when the Tamil Nadu Labour and Employment Department issued on May 30 a clarification stating that employees of information technology companies are free to form trade unions and seek redressal of their work-related problems.
The clarification came in the context of recent reports of infotech companies, among others, withdrawing offers of letters to new recruits, and other reports of workplace frictions in the IT space. These developments have inspired labour groups such as the Puthiya Jananayaga Thozilalar Munnani (New Democratic Labour Front) to take up their cases and campaign for unionisation of white-collar workers in this sector.
The PJTM has been pressing the government to clarify 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.
The right to unionise
“When IT companies and employers organise themselves under different associations such as Nasscom, TiE and MAIT, why should employees be left unorganised?” wonders Kiran Chandra, a leader of the Forum for IT Professionals.
“It is a fundamental right for IT employees to form workers’ organisations. They should be able to fend for themselves in disputes with their respective companies,” he thunders.
Chandra cites the recent instance of L&T Infotech’s failure to honour the offer letters it issued to recruits. “We have petitioned the Labour Department. But it is ineffectual to talk to them as individuals; we can derive more strength from being part of an association,” he feels.
Inconsequential move
However, other than among diehard trade union leaders looking for new territories to conquer and hoist their red flag, the general consensus is that the Tamil Nadu government clarification is unlikely to count for much in real terms.
For starters, there is minimal interest even among white-collar techies to unionise. “The moment there is a union, we will be treated like bonded labour,” said an employee, speaking on condition of anonymity.
Tech workers, who are acutely aware that they are far better paid than unionised factory workers, fancy their career prospects are better served by job-hopping if they are unhappy, rather than fight workplace issues, even when they are perceived to be exploitative.
In the past, a move to start an IT workers’ union in West Bengal, that bastion of workers’ rights, proved futile, recalled a labour lawyer.
BVR Mohan Reddy, former Chairman of Nasscom, says there is nothing new in the demand for unionisation of tech workers. “IT is an industry and, therefore, IT employees come under the ambit of the Industrial Disputes Act,” he points out.
The managements of IT companies are, of course, loath to see red flags on their campus for fear that it will discomfit their clients. After all, the supernormal growth of the IT-ITeS industry of the past three decades was facilitated by and fed the absence of formal unionisation of workers.
The likely impact
“It is unlikely that the formation of unions in the IT sector will hurt the industry in the short term, but it will definitely have bring about changes in business function,” Chandu Guntupalli, Founder of HR Champs, a HR executives association, told BusinessLine “More particularly, the role of the Human Resources department in IT-ITeS companies will become more challenging,” he adds.
The IT industry fears that unionisation will lead to increased litigation. “Legal issues will then occupy more of our time and efforts,” a top executive of an IT firm said on condition of anonymity.
The issues that agitate white-collar employees are not existential, and unrelated to, for instance, the implementation of the Minimum Wages Act or working conditions, Guntupalli points out.
“However, HR needs to be cautious about hiring employees in large numbers as asking them to leave in times of business downturn can lead to legal complications. HR needs to redress the employee grievance lawfully as the collective bargaining power of employees will increase,” he feels.
Another reason why the unionisation move may not take off is that IT companies typically have strong internal grievance cells that address issues in most cases.
Nobody can stop employees from forming a union in an IT company, says the labour lawyer. “But if the management does not recognise it, there is no use for such a union.”
The due process
So what happens when an individual or a group of employees in an IT company has unresolved problems even after the in-house grievance cell has done its work?
The employee can approach the conciliation machinery (of the Labour Commissioner) under the Industrial Disputes Act, who will call the employee and the management for conciliation. If the matter remains unresolved, the Labour Commissioner issues a ‘failure report,’ which the individual can then use to move the Labour Court.
If a group is affected, they can collectively approach the Labour Department for remedy. If over 100 workmen are involved, the dispute is referred to a tribunal for adjudication.
In an exceptional case, an order by Tata Consultancy Services last year to terminate the services of a pregnant lady was stayed by the Madras High Court; she got back her job on compassionate grounds. But this may not constitute a legal precedent.
In fact, the Court did not come to the rescue of a large number of employees of an IT company, whose serves had been terminated. The case was dismissed as the judge told the employees that he could not interfere in the case as they had approached the Labour Department under the Industrial Disputes Act.
This means that employees may have to fight for themselves or leave the company for another. Relative to other sectors, IT employees are typically young and prefer to move onto another job rather than go to court. They also fear that taking on the management might restrict their chances of future employment, said an advocate.
If an employee wants to take his employer to court, it is not possible to do so while still in service, the advocate said. There have been cases in the US where suits were filed only after the employees of Indian IT companies moved on from their jobs, he added.
(This article was published in Business Line on June 20, 2016)
http://www.thehindubusinessline.com/info-tech/why-it-unionisation-is-a-nonstarter/article8752488.ece