[Samurai]

Originally Posted by V.Narayan

Spending too much on training employees especially in deep knowledge doesn't pay in India because the SC has not allowed the validity of bonds against deep training.

That's why I feel laws have to change drastically to protect employers against such situations.

Originally Posted by V.Narayan

The Indian Govt tried this in the 1970s and till I think early 1980s where the MD's salary was capped at Rs 7000 a month in rupees of those days. Needless to say they had no way to control the leakage!

Now technology can monitor such leakage. I know this means major reform, and may cause chaos in short term. Right now we are running towards the oncoming train. It is time we started walking in the right direction, away from the train.

[Chetan_Rao]

Originally Posted by Samurai

....I know this means major reform, and may cause chaos in short term. Right now we are running towards the oncoming train. It is time we started walking in the right direction, away from the train.

We can either reform, or play by current market dynamics and brace for impact.

It's a choice between short term pain for long-term gain, or short-term pain (for those who are affected today) with long-term mayhem (when the unsustainable pay bubble pops and affects entire demographics).

Unfortunately, humans tend to sit on their hands until they're personally, and adversely, affected by something, so I'm not holding my breath expecting widespread corporate governance reform.

[civic-sense]

I joined a large IT company just after the dot com bust of 2001 and was greeted by unenthusiastic employees who were being paid about half of the salaries they had in their offer letters. The villian was what they used to call variable pay which was about 40% of the CTC. At the peak of the recession the variable pay paid to them was reduced to zero. Incidentally the company tided through the recession without even a single job cut. Consequently when the recession was over and the market boomed they all hopped as they were disenchanted with the company.

The company was quick to realize their folly and merged about 80% of the variable pay with the fixed pay leaving only meager sums to play with. Then the 2008 recession occurred. This time they didn't have a large variable pay to work with, so the company resorted to what every other company did - job cuts.

Till now I have failed to make up my mind about what was in the best interest of the employees - salary cuts or job cuts.

[Gansan]

Originally Posted by R2D2

In almost all cases IT staff are placed in the management cadre to avoid them being ruled by current labour laws.

Slightly OT.

Actually I observed first hand this issue of Management / Supervisory cadre employees termination sans benefits some years ago. A pharma unit at Cuddalore was closed, employees started a sit in protest with their families for many days, and it quickly blew up in to a political issue. There was bad press for the government and the collector had to intervene. All those in workmen categories had to be given a VRS package according to their years of service, but a large number of "officers, executives, Asst Managers" etc were simply terminated with just notice pay. The employees protested further and refused to leave the site.

Finally the government authorities concerned called in all such employees in to the room one by one, and in the presence of the HR head each one was posed one question. Did he have the authority to sanction leave and overtime? If he did not, he was decreed as a workman, irrespective of what the employer had designated him and had to be given the same severance package.

The promoter had already sold the site and P&M to another party and the deadline to handover was fast approaching. They did not fight it further and settled. It was a miscalculation by the HR about how easily the matter could be handled.

[sdp1975]

Originally Posted by Gansan

Did he have the authority to sanction leave and overtime? If he did not, he was decreed as a workman, irrespective of what the employer had designated him and had to be given the same severance package.

There have been numerous judicial pronouncements that for categorization as a "workman" , designation doesn't matter. What matters is the actual work the employee does . If the work performed is that of a supervisory/administratrive nature , then the benefits under the Industrial Disputes Act won't accrue - the benefits being 15 days of pay for every year of work.

Given the vague definition of "workman" under the IDA, judicial pronouncements have widely varied between cases. In the specific case quoted by Samurai , the employee apparently didn't qualify as a workman given his duties, but others may or may not , depending on what their duties are.

With support from trade unions , employees nowadays are increasingly willing to litigate. A 50 year old who loses his IT job has little chances of finding another job - he has nothing to lose by filing a case. A 30 year old has better chances of finding a job and is less likely to litigate. For companies , there's a risk that the case drags on for several years, and eventually if the verdict goes against them, the judicial predecent has been to mark the termination illegal and reinstate the employee with full or partial back wages from the date of termination. This can burn a hole in the company pockets, so it's really important that they make their choices carefully , and not circumvent the law.

[kiku007]

Originally Posted by V.Narayan

kiku007 - glad we agreed on something

Originally Posted by V.Narayan

I believe our IT industry will hit a wall sooner than they expect. In 10 years a lot of the low end programming will likely get taken over by AI inspired programming software.

..and countries that are cheaper than India. I currently work with an offshore team in Vietnam and to be honest I didn't know until last year that Vietnam had an IT outsourcing industry.

[blacksport]

Originally Posted by naveenroy

To be honest, I do not understand what you are getting at. No offense. Because you mention that it is lame that supervisors are excluded from the Industrial Disputes Act. But also mention that it is fine if a company just fires you.

Industrial Disputes act is just an unnecessary law according to me, and all that matters should be the contract they entered into when he was hired. But if a law is there in place then it should at least sans discrimination. Why discriminate against a supervisor?

For me, that is all the more reason to have more rights for workers in the IT Industry. No?

People should be allowed to waive off any rights they have. Like I should be allowed to waive of my right to a severance package in exchange for a well paying job.

On the other hand people should be able to insist that if companies want to hire them the contract should have a clause that he could not ever be fired, of if fired should be paid a heavy severance package.

[Samurai]

Originally Posted by blacksport

Industrial Disputes act is just an unnecessary law according to me, and all that matters should be the contract they entered into when he was hired....People should be allowed to waive off any rights they have. Like I should be allowed to waive of my right to a severance package in exchange for a well paying job.

...contract should have a clause that he could not ever be fired, of if fired should be paid a heavy severance package.

All this logic assumes that both parties are equally well informed and are in similar position of strength while negotiating an employment contract.

That is almost never the case. Employers who hire all the time, have very good understanding of labour laws, the loopholes, and demand/supply situation. They also have experienced HR professional and lawyers to enforce and defend their HR practices. On the other hand, employees generally know nothing about their rights, and are often ready to accept the job irrespective of the clauses in the employment contract.

Employers often break the labour laws knowing that even 1 in 1000 employees will not dream of suing them, for the fear of getting blacklisted. If even 1 in 1000 does sue them, the cost of dealing with it is lot cheaper than following the law.

For example, TCS had the habit of gobbling up the tax refund the US based employees receive from the IRS (US income tax department). We all knew it was a federal crime, but any protest against it was dealt with an iron hand by TCS. We had to handover the refund cheque to TCS office.

Many years later couple of former employees decided to sue TCS in USA regarding this practice. TCS settled the case, and had to pay $29 millions back to affected employees. I was already out, so I got nothing. But my friend who stayed back, got ₹20L compensation out of that. That means TCS still profited by the illegal act they practiced since the 70s, but had pay back only to a small portion of the victims.

So the powerful party can break laws regularly, and get away with a small fine if caught-sued-proved. Employees don't have this advantage. That is why laws are necessary to protect them for predatory practices of the employers.

[xcentrk]

@Samurai: Nice find. Thanks for sharing the article.

Originally Posted by V.Narayan

^^^^^
Samurai, thank you for the article. Very interesting judgment. A judgment, I as an erstwhile employer am relieved to read. In some of the posts above we are mixing unrelated issues -

Very well written. You just took things out of my thoughts!

As a current IT guy with 10+ years of experience, I can vouch for everything you have mentioned. No interest towards improving the skill, or to learn new expertise makes employees stagnant. I can see the hesitation in meetings while choosing manager for a new project as the one's who are good at, is already leading more than one project and one who is not fit, will be there in office with no real purpose. Yes, they are competent at one area/technology, but that isn't enough in this day and age.

Automation is taking up the big stage and technology is evolving at a phase no one imagined.(I mean, not even in my dreams I thought Javascript will be used to write server side logic!).

Most of the employees forget that the willingness to learn something new, updating your existing skill and being an expert in your domain/technology is a MUST. You simply cannot be like how you were a couple of years ago.

We have more than enough resource now(I mean, we have lakhs & lakhs of freshers with updated skillset) and instead of paying someone 10 grand, employer can choose to pay 2 grand for an employee with tad less experience, and that is ok as long as the new employee is skilled. If choosing to resign from the company is one's own decision, why not termination be a way of employer taking his decision?

My family is full of entrepreneur and I can see how hard the life is for them. It is really hard to imagine what kind of hurdles they had to jump before they can earn something substantial all the while managing the workforce who are mostly(not all) unwilling to help when the company is in need. In the end, it is business for the employee and if it's so, then it is purely business for employer as well. I don't see anything wrong in that!

[blacksport]

Originally Posted by Samurai

All this logic assumes that both parties are equally well informed and are in similar position of strength while negotiating an employment contract.

That is almost never the case. Employers who hire all the time, have very good understanding of labour laws, the loopholes, and demand/supply situation. They also have experienced HR professional and lawyers to enforce and defend their HR practices. On the other hand, employees generally know nothing about their rights, and are often ready to accept the job irrespective of the clauses in the employment contract.

Employers often break the labour laws knowing that even 1 in 1000 employees will not dream of suing them, for the fear of getting blacklisted. If even 1 in 1000 does sue them, the cost of dealing with it is lot cheaper than following the law.

For example, TCS had the habit of gobbling up the tax refund the US based employees receive from the IRS (US income tax department). We all knew it was a federal crime, but any protest against it was dealt with an iron hand by TCS. We had to handover the refund cheque to TCS office.

Many years later couple of former employees decided to sue TCS in USA regarding this practice. TCS settled the case, and had to pay $29 millions back to affected employees. I was already out, so I got nothing. But my friend who stayed back, got ₹20L compensation out of that. That means TCS still profited by the illegal act they practiced since the 70s, but had pay back only to a small portion of the victims.

So the powerful party can break laws regularly, and get away with a small fine if caught-sued-proved. Employees don't have this advantage. That is why laws are necessary to protect them for predatory practices of the employers.

If one doesn't understand what he is getting into, it will help him if he doesn't get in. As you said somewhere earlier the "powerful" can get the govt to enact the kind of laws they want. So rather than running the risk the powerful making laws you don't want, why not... "Caveat Emptor"? How about getting hold of what happens in your life than letting the govt do whatever the "powerful" want in your lives? So you don't have to shift the blame when something goes wrong. Just do your homework and take responsibility when something goes wrong.

[Gansan]

^^There are certain rights, which one can't state in an agreement that he will forego. It will not be legal. Even if he signs an agreement like that, it can't be legally enforced. He can simply say later he signed under duress, and the onus of proof that it was not so,will be the other party's responsibility. There are certain relationships/conditions under which the accuser need not give any proof.

Employer - Employee relationship is one of them.

[R2D2]

Originally Posted by Samurai

I am a business owner, and based on my experience, I feel it is far more complicated.

From your several insightful posts on TBHP, I am aware you are a hands-on person in both management and technology. And frankly, I admit your awareness of the many nuances of running an IT business would be higher than mine.

But IT workers are not entrepreneurs, they are actually very risk Faverse. They are in a high paying industry, where the demand for labour was always higher than supply.

I think the honeymoon has come to an end a long time ago

During my counseling of youngsters (<25 Y.O.) including my own friends' children some of whom plan to join engineering and later MBA colleges to enter IT industry only if they want to work like a slave, a like small cog in a giant wheel. UNLESS they are willing and able to pick up new skills over the course of a long career. There's been a reality check that's been long overdue. I have advised them to stick to core engineering and technical skills. And not to get swayed by the glamour of overseas assignments, the carrot that many fell for 2-3 decades back.

One of the 2nd tier MBA colleges in Pune I do guest lectures in had an interesting insight to share - the # of engineers opting for MBA has dropped from 60-70% in the 1990s to about 5-10%. I enquired with some other Institutes and this pattern is visible there as well. Youngsters are hesitant to do engineering + MBA for the poor value it offers. This, of course, does not apply to top tier engineering institutes and business schools.

I have read the distilled version in another book. He suggests it is time corporations move away from worshiping a single master called shareholder. They should also serve employees, customers, and societies they exist in. This is what companies in pre-Friedman era practiced.

That was a good read. Thanks for the pointer.

Now 40+ aged employees have discovered the truth, and <35 aged employees are still far from learning the truth. When supply outstrips demand, everyone will learn the truth.

That thread on TBHP has been a source of an uncomfortable wakeup call for those working in IT. But I say it is better to hope for the best and plan for the worst when there is sufficient time.

This is why high pay is like sugar. Employees love high pay when they are young. Only in the 40s, they realise sugar is poison

Which feeds into that thread about >40 IT workers most of whom are members of the 'Stupid IT Managers' category.

Originally Posted by V.Narayan

kiku007 - glad we agreed on something I believe our IT industry will hit a wall sooner than they expect. In 10 years a lot of the low end programming will likely get taken over by AI inspired programming software.

Vivek ji, I had a dinner get-together about a week back with former boss and several ex-colleagues from the IT and telecom world. TBH, we hit the "wall" post-2008 and that wall has and will become increasingly insurmountable as the years roll on. Hence the thoughts I shared on the >40 YO IT employees thread for many of today's youngsters to prepare for retirement by 45-50. This career span may get compressed further as AI and automation become commonplace. I know of a private bank in Pune to that laid off about 30% of staff due to automation, this info is from one of their management cadre employees.

[Chetan_Rao]

Originally Posted by R2D2

....we hit the "wall" post-2008 and that wall has and will become increasingly insurmountable as the years roll on....

One thing a lot of people in IT still don't realize, is changes in IT are akin to the 'boil the frog slowly' metaphor.

There won't be a single catastrophic event that will change the industry overnight, more like an accelerating chain of events that started a decade or so ago.

[Samurai]

IBM fired 1 lakh older employees to look 'cool,' and 'trendy' for millennials like Amazon and Google.

As a 50 year old, I am shocked at this news. It is an accusation, not sure it is really true. But the statement came former IBM HR vice president Alan Wild.

[sdp1975]

Originally Posted by Samurai

IBM fired 1 lakh older employees to look 'cool,' and 'trendy' for millennials like Amazon and Google.

As a 50 year old, I am shocked at this news. It is an accusation, not sure it is really true. But the statement came former IBM HR vice president Alan Wild.

I'm not at all surprised at this news. Age based discrimination comes in many forms - here's one in the name of performance.

In the US, fortunately there are laws against such discrimination and they're reasonably well enforced.