The IT sector often projects a rosy picture of itself to those who do not belong to it — fat paychecks, zero on-field visits, the corporate lifestyle, visits to clients (even in foreign locales), and the list goes on! Only IT pros know what it’s really like.
It’s not as if the above mentioned benefits or perks are not available to IT professionals. In one sense, IT employees have seemed to be satisfied with their jobs and employers. That makes it even more surprising that there has been plenty of talk about IT workers forming a union.
In fact, one of our states, Tamil Nadhu, is now permitting IT employees to unionize under the Industrial Disputes Act of 1947. So, what has suddenly changed that the highly organized IT sector is suddenly on the verge of getting trade unions across the different states of India?
Let’s take a look at the series of events that has led to the development of such IT unions, as well as at the states that may be impacted. I’ll also try to answer whether IT workers really needs unions and what the potential impacts may be on employees and the Industry as a whole.
The Reasons for IT Unions
This all started in 2015 when Tata Consultancy Services (TCS) laid off thousands of employees. This mass layoff was unexpected and sudden and came as a shock to many of TCS’s employees.
Since then, there have been the usual after-layoff reports that the possible reason for such a decision was that management wanted to implement reforms and reduce expenses across the various TCS centers — this in spite of 17 percent growth registered by the company in the first half of that fiscal year.
You might be wondering about what “saving expenses” has got to do with the layoffs of experienced employees who have been working for the organisation for quite some time.
New campus recruits cost less and have a fresh set of skills (some of which may be in sync with the latest technological trends). Meanwhile, the senior or experienced employees who do not improve themselves with new skills are of little value to organisations like TCS, as they cannot be given leadership or management roles.
The Real Problem with TCS’s Decision and IT Labour
The main problem was that TCS did not inform the labour department about its decision to lay off employees from its centers in cities like Bengaluru, Chennai, Kochi, Hyderabad and Pune.
They did not do so partly because India’s IT workers do not fall under the Industrial Disputes Act, which allows workers to form unions and makes the employers accountable and answerable for such actions. Even though some experts claim that the Act does cover IT workers, many states have issued exemptions that prevent the forming of unions.
The IT industry has always been known to be one of the most organised sectors, where the needs of labor are believed to be handled reasonably well. However, we often ignore the fact that the threat of unjustified terminations or layoffs always loom large and employees are not offered any legal protection against such unanticipated terminations.
And, this does not even take into consideration the problems with a lack of a redressal mechanism and longer working hours for the IT employees.
The Outburst that Triggered the Debate of IT Unions
The above discussed problems have been at the back of the minds of many IT employees and it is likely that these are also considered by some of the laid-off TCS employees. When TCS took the major step of mass layoffs, the outrage among IT professionals exploded. This was evident in the kind of support that the TCS employees received from IT workers belonging to other companies on their Facebook page, We are against TCS Layoff.
In Chennai, a group named Forum of IT Employees (FITE) discussed the issue of unexpected layoffs with the terminated employees and even initiated an online campaign to submit a mass petition to Prime Minister Narendra Modi to stop such unjustified layoffs.
Meanwhile, the New Democratic Labour Front (NDLF), which was a trade union organization, also raised concerns in favor of the laid off TCS employees. Such support has led to the formation of an IT Employees Wing.
The NDLF could not get any response, however, from the Tamil Nadu state government. Hence, it approached the Madras High Court to get clarification of whether the IT industry was covered under the Industrial Disputes Act.
What is the Industrial Disputes Act?
The Industrial Disputes Act came into force in 1947 to protect employees (or workmen) against victimization by employers and to offer justice for both employees and employers. The Act’s prime objective is to maintain industrial peace and harmony through appropriate processes for the investigation of industrial disputes and their settlements through negotiations. It helps in the regulation of layoffs and the retrenchment process for employees.
Union Nod for Tamil Nadu’s IT Industry
Previously the IT sector has not been covered by the Industrial Disputes Act for the majority of Indian states, including Tamil Nadu. After the TCS layoff event in 2015, however, the efforts of NDLF resulted in a ruling allowing IT workers in Tamil Nadu to form their own trade unions.
With major IT giants, such as Infosys, Cognizant, Wipro, HCL Technologies and TCS, in Tamil Nadu, a large number of IT employees will now be able to take advantage of the provisions listed under the act. Contrary to this development in Tamil Nadu, Karnataka, which is the largest IT hub in the country, still prohibits IT professionals from forming trade unions. The same holds true in Kerala.
General Impact of Worker Unions
The manufacturing industry probably has the largest number of worker unions that work cohesively to protect the rights of the employees working in that industry. Most of these employees, however, are not highly educated and they may not always know what to do when faced with crisis situations, for example sudden terminations. This is where they get the support of the trade unions, which know how to fight for their rights and get justice.
Yet the trade unions often result in more non-productive days for the employers during protests, when the company does not get any work done and the employees do not earn any wages or salaries. Thus, prolonged strikes or protests have often led to certain factories being shut down. One such example is the shutdown of ITC’s main factory in Bengaluru in 2014.
Will IT Workers Unionize?
Coming back to the IT sector, most of the employees are byproducts of the Indian education system, which at least makes them self-dependent and able to fight for their own rights. And, with the IT industry being based on hierarchy, there are many leadership roles that the junior employees aim for. It may well be easier to keep quiet and avoid trouble. Being seen as a union organizer could have negative repercussions for one’s career.
Additionally, unlike manufacturing workers, IT workers tend to have high-value skills that make them competitive. On top of that, many IT workers may not wish to be led by the outside people or organizations that form part of an IT trade union (if it materializes), particularly a union that crosses into other states and may have other issues to handle.
Thus far, there has been little incentive to form unions among IT workers. This is because the industry has been growing rapidly with above average wage hikes and the concern for employers has been how to retain employees.
Moreover, there are many IT organizations that really do look after their employees. The intervention of trade unions might taint the positive relationships that many IT employers have with their employees. At any rate, only time will tell how good an idea it is to allow unions for the IT industry in Tamil Nadu and most likely by extension, the country as a whole.
The ability to unionize in Tamil Nadhu isn’t expected to have any negative impact on the Industry in the short-term. It is the long-term consequences that concern industry experts especially as automation increases and begins to impact the demand for labor.
So, do you think that unions in the IT sector should be allowed for all states? Does it augur well for the industry? Kindly share your opinion in the comments section below.