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EMERGENCE OF IT & ITES- EFFECTS ON THE LABOUR LAWS

EMERGENCE OF IT & ITES- EFFECTS ON THE LABOUR LAWS

           

   India is a country having diverse religions and cultures. It becomes necessary to harmonize industrial relations in the country with respect to such diversity. India’s trade performance during 2003–04 was influenced by a number of factors which include productivity changes in the manufacturing sector, recovery of global economy and world trade, continued trade promotion and trade facilitation efforts of the government, and an appreciating Indian Rupee against the US dollar. Hence India has a wide variety of labour laws which are essential for the smooth functioning of industrial relations in the country. In today’s developing world IT has played an important role to formulate it into a new height. IT plays a role like a magnet, at one pole it is positively charged and the other is negatively charged. As such its magnetic field helps some aspects of life and affects some aspects of life. One of the most critical needs of the burgeoning Indian software industry and other outsourcing service providers is to have the flexibility and the independence to hire the most worthy of the manpower and fire the unproductive employees. There is also a growing need to draw a fine balance between the hire and fire policy of the employer and the rights of the workmen. This article proposes to discuss the Indian retrenchment laws, right of compensation of employees and applicability of these laws to Indian Information Technology (the “IT”) industry

MEANING-

Information Technology (IT) in a broad sense connotes that technology which is connected with information. More particularly it connotes that technology which has taken shape during the last five decades or so involving electronics.  THE Indian IT industry is among the country’s fastest growing sectors. India has been able to establish itself as a competitive and quality destination for outsourcing IT & IT enabled services.

The Information Technology Enabled Services (ITES) sector is spreading in India fast, and over five lakh workers and technicians are employed in it. We welcome the development of this sector as it is providing gainful employment to educated persons in India. Several centres in India have developed a large number of call centres and consultancy offices, which are earning enormous profits. Their number is likely to swell very fast in the near future. Accordingly to uphold the network of information technology in India IT Act came into force in 2000.

The use of such technology for the storage, retrieval and dissemination of information has given rise to several legal, social and ethical problems.

EFFECTS ON LABOUR LAWS-

         The direct affect of in formalisation has been deterioration in respect for labour rights. The provisions of large number of labour laws remain non-enforced. The adherence to the core labour standards remains good in paper only. The desire to get more FDI and pressure from the MNCs has caused the government to overlook violations. The ID Act which is applicable to all industrial and commercial establishments defines employee/workmen and both skilled and unskilled persons may be considered as ‘workmen’. However, a person employed mainly in a managerial or administrative capacity or if the nature of services rendered by an employee is supervisory in nature, the employee may not be considered as workman. In view thereof, the Head, Project Managers, Manager (business development) of the project teams at an IT or outsourcing company may not be termed as ‘workmen’ subject to actual assessment of their roles and responsibilities. However, it is likely that the other team members, associates, trainees employed by an IT company may be considered ‘workmen’ subject to assessment of their specific job profiles, roles and responsibilities

         Termination of employment needs to be in accordance with the Shops and Establishments Act as applicable to the jurisdiction where the IT company is situated and the Industrial Disputes Act, 1947 (hereinafter the “ID Act”). The Shops and Establishment Act usually enables the employer to discharge his employee, other than an employee engaged for a specified period or in a leave vacancy, from the service by providing the employee a 30 days notice in advance or such longer period as may be required under the terms of employment or salary in lieu thereof.

         The business and technological modernization such as particularly web-based service outsourcing, should not be undertaken at the expense of labour, that is, by pitting workers against workers everywhere and rolling back labour rights through a race to the bottom, ignoring the universal core labour rights (freedom of association, collective bargaining, non-discrimination, non-use of forced labour and elimination of extreme forms of child labour) and forgetting that the end-all and be-all of any economic development is the improvement of the lives of the working people.

         The ITES owners and managers, governments and relevant international bodies have to consider the adoption of a universal charter. Recognition of a universal charter with clauses respecting minimum labour standards, core labour relations rights, healthy and safe work conditions, ceilings on work hours and employee representation are essential to protect the interest not only of the ITES employees but also of the ITES industries themselves. They are the key to the stabilization of jobs in what is otherwise seen as a ‘transition industry’.

           In the course of fifteen years, India has come to be acknowledged as the IT hub-centre, supplier of skilled workforce to the world, etc. It has also regained its position as the spokes nation of the developing world. On the other hand, India is poorly placed in terms of human development index. The development of social capital is inadequate and worst is its access, as it remains confined to urban areas and to rural elite. For majority of population, more so those who earlier constituted part of the Organised Sector workforce, the emerging conditions can’t be worse. The informalisation of work, skill obsoleteness, absence of any formal social security has left them in a state of desperation. The direct affect of informalization has been deterioration in respect for labour rights. The provisions of large number of labour laws remain non-enforced. The adherence to the core labour standards remains good in paper only. The desire to get more FDI and pressure from the MNCs have caused the government to overlook violations. Further the trade unions are divided on political lines. There are however, increased activities among non-mainstream labour organisations, but then they are not influential on the policy-making levels. The declining size of workforce in the organised sector, with dwindling support from the government against an aggressive employers have further enlarged the size of workforce that is not in receipt of benefits of legislative protection as also of government’s labour welfare policies.

         The business and technological modernization such as particularly web-based service outsourcing, should not be undertaken at the expense of labour, that is, by pitting workers against workers everywhere and rolling back labour rights through a race to the bottom, ignoring the universal core labour rights (freedom of association, collective bargaining, non-discrimination, non-use of forced labour and elimination of extreme forms of child labour) and forgetting that the end-all and be-all of any economic development is the improvement of the lives of the working people. The well documented job turnover rates in the ITES sector, the highest among industries, only show too well that occupants of these ‘highly-paid’ jobs find their jobs difficult, boring and undesirable in the medium and long runs. Decent working conditions are a prerequisite for good and reliable service provision. To make these jobs sustainable and minimize costly turnovers, the owners and managers of call centers, BPOs, software and IT companies as well as governments have to address the human resource concern and respect the basic rights of these employees to establish trade unions of their own choosing and bargain collectively as provided for in the respective ILO Conventions.

           It is also widely acknowledged that the lower degree of trade unionism or collectivity among the workers is closely related to the technology aided work organisation and controls practiced in the sector. The work arrangements and interactions at workplace are pre-designed and implemented, leaving the workers minimum scope for any `undesirable’ socialisation aiming at organisation or formation of employees collectives. The employees have to work continuously and in their endless run after work targets, they do not even find any time for thinking about collectivity and trade unionism. The HR practices in the ITES-BPO sector indicate a changed paradigm of personnel management vis-à-vis that of the conventional manufacturing/ service sectors. The task of camouflaging work as fun is vested with Human Resource (HR) managers. They pay attention to a host of issues, varying from hiring the right people to charting out their career options to the employees.

Agreements between companies and unions at the national level should ensure the following:

Job Security: Companies should immediately cease proposals to outsource, offshore or contract out work that will result in the forced lay off of workers.

Redeployment: Effective redeployment must be undertaken protecting career value and terms and conditions of employment.

Labour Standards: Companies to which work is outsourced must observe all the core labour standards of the ILO. These are in particular the rights to organize and bargain collectively. Moreover, we need mechanisms to monitor observance of standards; they must include the trade unions and their global union federations.

             The ITES owners and managers, governments and relevant international bodies have to consider the adoption of a universal charter. Recognition of a universal charter with clauses respecting minimum labour standards, core labour relations rights, healthy and safe work conditions, ceilings on work hours and employee representation are essential to protect the interest not only of the ITES employees but also of the ITES industries themselves. They are the key to the stabilization of jobs in what is otherwise seen as a ‘transition industry’. It is evident from the above that due to multiple factors the penetration of trade unions in the ITES-BPO sector of India has been minimal in the first phase of advent and growth of the sector. However, it would be wrong to conclude that this sector would continue to be a trade union-free zone for years to come. Already there are spurts of organised collectivity among BPO workers in different parts of the country.

             The recent clarifications of government that all the labour laws are equally applicable to the sector and the ongoing efforts of Government towards effective policy formulation are also suggesting towards the emergence of a more encouraging framework for healthy trade unionism in the sector. Thus, the approaches of various stakeholders towards collectivity in the sector are gradually changing and the worker associations are increasingly being viewed as desirable institutions to improve workplace relations and social dialogue.

INDIAN IT- FIRMS EXEMPTED FROM LABOUR LAWS:

            With the IT firms being affected the most during slowdown and facing tough situation to come out of that phase, the government has rendered a helping hand by exempting IT/ITES and software establishments from the provisions of Industrial Employment (Standing Orders) Act 1946 (Central Act 20 of 1946) for two years. This Act applies to every industrial establishment wherein one hundred or more workmen are employed or were employed on any day of the preceding twelve months. This law is strict on classifying workers, their working hours and shifts, the wages payable, besides other archaic rules on leave and attendance.

            Following the announcement, Mohandas Pai, Head of HR in Infosys Technologies told the Economic Times, “We have antiquated labour regulations, which do not fit the requirement of the knowledge-based industry. This reform is necessary. We do not want inspector raj here, what we want is more such reforms across industries.”

CONCLUSION-

It is evident from the above that due to multiple factors the penetration of trade unions in the ITES-BPO sector of India has been minimal in the first phase of advent and growth of the sector. However, it would be wrong to conclude that this sector would continue to be a trade union-free zone for years to come. The recent clarifications of government that all the labour laws are equally applicable to the sector and the ongoing efforts of Government towards effective policy formulation are also suggesting towards the emergence of a more encouraging framework for healthy trade unionism in the sector. Thus, the approaches of various stakeholders towards collectively in the sector are gradually changing and the worker associations are increasingly being viewed as desirable institutions to improve workplace relations and social dialogue.

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