Red Flag in the IT Industry

The IT Industry has changed the landscape of India irrespective of its political philosophy. Various state governments are offering the red–carpet treatment to the IT Industry. This sector has generated huge direct and indirect employment. The salaries in the IT Sector are unmatched even by the manufacturing sector. Any Engineer with adequate knowledge of Information Technology can get a job in the IT Sector. State governments, competing with each other, have started offering huge incentives such as extra F. S. I., exemption from many taxes, land at low rates to name a few. The growth of the IT Sector has changed the landscape of the country.

Against this background, while the Manufacturing Industry is seeking a change in labour laws so as to implement a hire–and–fire policy, the IT Sector is pressing hard for framing of laws related to confidentiality, non–competition and compulsory working for the agreed period. In the absence of law, employment terms are drafted determining terms of employment.

The prevalent practices in the IT Sector, such as instances of executing bond, payment of large amount as severance package in case the employee leaves his job, retaining original certificates or official documents like the passport, harsh terms in appointment letters show that the industry is keen to retain talent and prevent poaching by others in Industry.

So far Trade Unions kept themselves away from this sector. The Sector was under the impression that trade unions cannot be formed. However, in India, the right to form an association is a fundamental right under Article 19(1)(c). The IT Sector employees were also unwilling to associate themselves with trade unions as they were unwilling to equate themselves with blue–collar workers. Various state governments went out of their way to support the IT Industry when limited efforts were made in small IT Companies to form unions or espouse the cause of employees. Political parties were trying hard to make ingress into the IT Sector so the Trade Union movement never gathered momentum in the IT Sector.

However, recently there has been a shift. Slowly but certainly, IT employees are responding to Trade Unions. Trade Unions are approaching them. Employees are approaching political parties, local elected representatives or so–called social workers to resolve their problems.

In 2013, fresh HCL recruits formed a Union and staged protests after the company officially delayed their joining dates at least five times. Unions like the All India IT Employee Association and Forum for IT Employees (FITE) have come into being. In a debate in September, 2014, Senior CITU leader and former CPI–M Member of the Rajya Sabha, K. Chandran Pillai said “Due to increasing reports of employee exploitation there is a discussion to form Trade Unions in the IT Sector.”

Unrest amongst employees is growing due to various social aspects. Social aspects of the IT Industry are not considered by its promoters. A large number of employees hail from semi-urban/ rural areas. With better salaries, there is more disposable income which allows more freedom. Besides, this, the employees are leading a stressful life, which is leading to a high rate of divorce, frustrations and health issues etc. There is also insecurity of employment. Employees are sometimes asked to quit without even notice pay. Conversely, when an employee gets a better chance, he is not relieved without complying with harsh terms and conditions.

The IT Sector has a voluminous employee turnover irrespective of the best HR practices and better service conditions. However, there is something amiss, as an increasing number of young professionals tend to keep an eye out for the next lucrative opportunity. They also do not strike a work-life balance leading to early burnout, high levels of frustration, all leading to a high rate of divorce amongst other issues.

The issue whether the Factories Act is applicable to IT Companies has been under consideration for a long time before the Supreme Court. Whether a Software Engineer is a workman or not also requires consideration, although in a few instances a Software Engineer is considered a non–workman.
Against this background, the IT Industry is taking all steps to retain employees. Steps such as post–dated cheques, retaining Passport, original educational certificates, stringent terms and conditions in letter of appointment, have not yet been tested in a court. The working hours of IT companies are aligned with principles in other countries. Therefore, the working hours are unregulated. Customers are overseas and, therefore, sometimes the employees have to work for more than 8 hours.

The promoters of IT Industry should keep in mind the reasons for the rise of the late Dr. Datta Samant in Maharashtra. With Dr. Datta Samant getting into the trade union movement, the landscape of service conditions of workers underwent a change. His presence increased unprecedented violence leading to better service conditions for the working class. The rise of the late Dr. Datta Samant in many cases was due to poor service conditions including wages offered to workers. In a matter of time, trade unions will enter the IT Sector. Trade Unions are now functioning on professional basis. Some of the Trade Unions have now become money-making machines. In case this happens, the legal framework or the employees cannot be blamed. The IT Industry should understand the coming storm and deal with the problem before it is too late. The Industry should understand what is wrong at home in the Sector and why youngsters are quitting and looking for better options. The employers need to diagnose the problem and treat it before it gets out of control. Once professional trade unions enter the IT Sector, there is no point in rushing to the government for a change in laws.

Consequences, of Trade Union in the IT Sector can be disastrous for the industry as also the society. To know more about this the IT Sector can get in touch with the journey of Manufacturing Sector.