There are several reasons why India, in spite of sustained efforts by multiple governments, has failed to emerge as a Manufacturing giant. One major structural issue that has hamstrung India repeatedly is the inflexibility in its labour laws.
The problem of India’s archaic labour laws is compounded by pervasive and militant Unionism across the Manufacturing setup that for decades has effectively stalled its growth. While it is true that Unions have become more docile and amenable to change, yet the reality is that they are far removed from the reality of a rapidly changing and extremely competitive world.
That having been said, in some ways Unions are merely facades for political parties to fight their battles at the local level. Administration of Unions in many places is characterized by petty politics and wringing concessions out of management to prove their power, with scant regard to the interests of workmen. Who can forget how Dutta Samant single handedly brought down the thriving Cotton mills industry in Mumbai in the 1980s.
While he was portrayed as a Socialist hero, fighting the Capitalist mill owners, the reality is that his penchant for strikes and violence rendered generations of mill workers destitute and pushed them into poverty. The systematic dismantling of Manufacturing set up in West Bengal is also blamed on Unions and the Communist penchant for strikes, dharnas and violence.
India’s booming (at least until recently) IT industry seemed like the final frontier for Trade Unions in the country. In spite of continuous efforts to woo the IT crowd to embrace Trade Unionism, IT sector remained immune to Unionism. There were several reasons for this.
Firstly, booming IT sector meant that there were enough jobs everywhere. So, people who quit or were asked to leave would land another job quickly. Secondly, with their foreign postings and yearly increments, IT folks have never seen themselves as blue-collared ‘workmen’ and have had no appetite for Unionism. Thirdly, IT folks have been guided by selfish self-interests rather than the collective interests. There is always the lurking fear that if they were to get tainted by Unionism, they wouldn’t be employable elsewhere. These reasons have broadly ensured that IT sector remains Union-free and that the Management gets enough space to manouevre decisions related to productivity and costs. Governments, interested in portraying their states as Industry-friendly have also turned away their eyes from minor trangressions from law.
With the IT sector experiencing severe headwinds and headcount reduction becoming the norm of the day, Trade Unions have sniffed a God-sent opportunity to spread their wings. The key question that was deliberately left unanswered was whether IT employees are workmen as per Industrial Disputes Act, 1947. While Karnataka had clearly put IT employees in the exempted list with reference to the act, Tamil Nadu had dithered.
So, in 2015, when TCS began laying off employees, some employees formed IT Employees Wing that approached the Courts on clarifying their status. Last year, the Tamil Nadu government clarified that IT sector would be covered under Industrial Disputes Act, 1947, thereby opening the gates to Unionization of IT sector.
With Cognizant laying off some employees last week, the speed of Unionization in Tamil Nadu’s IT sector is gathering steam. As many as 100 employees have signed up as primary members of a Union formed to protect IT employees’ interests.
Tamil Nadu, with almost 4.5 lakh employees working in the IT sector has emerged as a fresh battleground for the forces of Trade Unionism.
It is only a matter of time before the virus of Unionism spreads to other IT hubs in the country. Already, Labour department in Telangana has given notice to Cognizant to respond to allegation of illegal termination of employees. As IT sector shrinks further and downsizing becomes the norm, employees who are unable to land jobs outside their current roles will be forced to look towards Unions as their saviors.
Needless to say, growing Unionization is also a damning indictment of management’s ability to communicate effectively and humanely to its employees. With reports such as only 20% of Software Engineers being employable, It is also important for employees to introspect if it would be worthwhile to upgrade their skills to make them easily employable in the future.
It is also important for the Government, that for years now has been crying itself hoarse on India’s IT prowess to reflect on what needs to be done to make our IT sector more competitive. Unionization, far from resolving the structural inefficiencies that plague the sector, will only introduce rigidity and political interference that the sector will do well without.
India’s experience with Unionism has been quite bad. Unionism has left in its wake a landscape devoid of industry, depraved work ethics and unemployable masses. Unionism has been a sure shot strategy to ensure that people are left mired in poverty so that political classes can exploit them as vote banks. If the government intends to ensure India establishes itself as an economic superpower, with IT as a strong component, it must proactively take steps to snuff the flames of Trade Unionism, while upholding employees’ rights.