Tech Mahindra, Telangana Govt Get High Court Notices For Unlawful Layoffs 

HYDERABAD: In a setback for Tech Mahindra (TechM), Justice MS Ramachandra Rao of the Hyderabad High Court on Monday issued notices to the state of Telangana, its labour department officials as well as TechM, directing them to respond to the allegations of unlawful retrenchments of software engineers and other professionals.

The judge gave them three weeks to file their replies to the contentions raised in a writ petition filed by Sudhakar Suddala and three other retrenched employees of TechM, who brought to the notice of the court the issue of lay-offs of IT employees prevailing in the software sector.

The counsel for the retrenched employees informed the court that the TechM management was resorting to large scale, illegal retrenchment of its employees in Hyderabad.

He also told the court that the human resources (HR) department of the company was pressurising employees to tender their resignations in a manner that made it look like they quit voluntarily.

The petitioners had earlier approached the joint commissioner of labour, Ranga Reddy district, under whose jurisdiction the company falls, complaining against the high handed and illegal methods being adopted by the company to get rid of its employees.

But even as the conciliation process was set in motion by the labour department, the company went ahead and terminated the employees without waiting for the outcome of the conciliation process, showing scant regard for the law and the government, the advocate for the techies told the court.

The laid-off techies also informed the court that this action of the company ran contrary to Section 47(2) of the Telangana Shops and Establishments Act, 1988.

Since the exemption from this provision of the Act to IT companies, given by the state government vide GO MS No 22, has been stayed by the High Court itself in another petition, the counsel sought a direction to the labour department and TechM to forthwith reinstate the retrenched employees pending the conciliation proceedings.

Meanwhile, Tech Mahindra chairman Anand Mahindra has tweeted seeking apology for the rude sacking of an employee in Chennai.

I want to add my personal apology. Our core value is to preserve the dignity of the individual & we'll ensure this does not happen in future.

The incident shows the heightening stress in the sector that is taking a toll on the self-esteem of the employees, both the engineers and some very experienced ones at that, besides on the management front, too.

Tech Mahindra IT employee's sacking by HR in this audio clip goes viral!

The cruel manner in which the HR is trying to dispose the IT employee is heart rendering, so much so that Mahindra Group Chairman, Anand Mahindra apologized for the conduct.

Firing employees, irrespective of experience, is not a new phenomenon in the IT sector. There are sacking orders executed by top majors in the IT sectors that could be seen as inhuman in the context of ‘best’ practices.

What is becoming evident and clearer in the public forum is the manner in which the employees are being asked to leave. In a recent case, a fresher joined an IT company in Chennai in 2011-12 after paying Rs1 lakh as bond. The agreement stated that if he left the company’s services within a year or if the company terminated his services, either which way, the employee had to forfeit the bond to the company. Eight months after joining the firm, the employee was sacked with no reasons offered. When he reported to work, the security at the gate took away his ID card and asked him to go home as his services were terminated. He approached Fight for IT Employees (FITE), a union that has taken shape in Chennai and is awaiting registration. FITE is fighting the case in court.

More Layoffs In IT Sector In The Offing

The IT industry is going through a churn with automation, stricter visa rules in the US, Singapore and Australia among other countries, coupled with the rapid pace of technology. This is one of the reasons for mass layoffs in the sector. "Around 100,000 employees are expected to be laid off by the year-end. So far, 50-55,000 employees have been sacked or asked to leave," said an analyst.

Assocham, the country's apex trade body, had cautioned about the IT sector’s prospects in April: "Aggravated by rising rupee leading to lower realizations for software exports, the Indian IT firms may be forced to displace work force. In that case, the chances of layoffs are real."

With rapid change in technology, IT firms cannot afford to go by outdated human resources (HR) practices that make hiring and firing a closed-door affair.

“Traditional HR practices cannot work anymore when you fire an employee,” reiterates Sanchit Vir Gogia, chief analyst, Founder and CEO of Greyhound Knowledge Group, a global strategy and transformation research, advisory and consulting group. With social media gaining increasing traction with regard to hire-fire policy of the Indian IT sector, HR policy needs to undergo a transformation, says Gogia.

Why do companies take to this threatening attitude when asking employees to leave? One of the reasons for it, says Vinod AJ, general secretary, FITE, is that the company wants to avoid paying compensation to employees and also because simply there is no employee ‘incompetency’ to report about. “What else can they do than fire an employee on the spot,” asks Vinod.

Anand Mahindra’s tweet is just a mere apology, says Vinod AJ. “What will it do for the employee? The job is not going to be offered back,” he says.

But that is the reality of the sector. With almost 60 percent of Tech Mahindra’s -- just like the other Indian IT major’s -- projects comes from the West where a severe slowdown and protectionist policies are dampening business prospects, revenues and bottomlines of the companies are hit.