- It Life Fun or Problems – Series 2 – PART 1
- “Clean Exit” – Sacred Cow of HR and Employees
- “Company has Right to Terminate Employment any Time” – True or False?
- Compliance Violation and Termination – Facts to Know
- Nazi Gas Chambers and HR Exit Process
- What Legal Rights I have as an IT Employee?
- How Much it Costs to Approach Labour Department?- Zero!
- Fixed Term Employment : A Ticking Time Bomb
- HR Targetting Pregnant Employees is Illegal and Inhuman
My name is Shyam Sundar. I am working in one of the top 5 IT Companies in India. I have 21 years of working experience in Information technology. I am working in the current company for the past 17 years. I have experience working in various parts of the world including countries like USA, UK, Switzerland, United Arab Emirates, Malaysia and South Africa.
I joined NDLF IT Employees Wing last year. I wrote a series of articles called “IT Life Fun or Problems” covering the various aspect of how employees in IT sector are targeted as layoff victims and how they can protect themselves from layoff. This article series was published in our website in both English and Tamil version. Later this series is published as e-book and currently we are in the process of bringing printed version of this series.
In the first part, I covered mostly soft skills which help employees to safeguard from layoffs and touch base with legal aspects only lightly. I intentionally skipped the legal aspect as, to be honest, I was very hesitant and a bit nervous about the subject matter and the impact it will make.
In the last 1 year, I happened to talk with more than 300 employees who faced layoffs.
How do they face a sudden job loss situation?
This industry brings the best possible opportunities for educated youth, like higher salary, onsite opportunities and better life style. If a person is blind from child hood, blindness will not affect them much as they got used to it. But if blindness caused in middle, the impact it causes is very high. Likewise, when IT employees who are settled in family life with good income and better lifestyle are faced with layoffs, the impact it creates is very bad.
I have mentioned the suicide of Durga Prasad in the first part of “IT life fun or problems” series. Unfortunately more suicides are happening in IT sector. The recent death of Ganta Krishna Chaitanya affected me personally.
As the first reaction to suicide news, many people pass comments against the act. They say that it is not a correct decision; they blame the suicide victim. People working in IT sector are well educated and are in a well paid job. The sudden job loss induces them to commit suicide, which is definitely wrong. But, the companies should should understand the impact of being without job in the person’s life and how cruel sudden layoffs are. It is true that companies are not directly responsible for such acts, but if they follow proper process and legal procedure these kind of incidences can be avoided.
On the employees part also, the main reason for taking such wrong decision is lack of awareness about labour laws and and about their rights. IT employees are not well versed with legal aspects of layoffs. The comfort level provided by a job in IT sector makes employees lack knowledge on legal aspects. This is the primary reason for companies repeatedly trying to do layoffs year after year.
In sectors like banking, education, railways or many other sectors, we do not hear about such forced resignations. The employees of these sectors have formed labour unions for themselves and are protected from such arbitrary acts of management. Union streamlines employee-employer relationship and helps business to proceed in a better way. So information technology sector should also move towards unionization which is the only solution for protecting employees from this pressure.
To make this happen, awareness among employees is the core requirement. That is the prime reason for me to continue this series after a year of the first part. I got my bread and butter for 20 years from this industry and my intention is not to complain about the industry as a whole. My prime intention is to make the companies understand employee concerns and streamline exit process in a smooth and planned way instead of forcing employees to submit resignation and leave on the same day.
When we look at how employee is asked to leave by companies, usually layoffs are planned using any one of the three ways:
1) Employee is asked to submit self-resignation
2) Company issues termination letter citing redundancy
3) Company issues termination letter citing compliance issue
In most of the leading IT companies, employees are asked to submit self-resignation. Normally employee submit resignation on their own due to the following reasons:
1) Getting better offer
2) Higher studies, marriage, any other personal reasons
3) Voluntary retirement
In all the above cases, employee submits resignation for their own interest. Then it is called as voluntary attrition. In case of voluntary attrition, employee has to serve notice period as mentioned in the offer letter. Usually, the notice period is 1 month for employees who are not confirmed and 2 months for confirmed employees.
But, even when the company wants to send out employees for some reason (mainly to maintain profitability through cost cutting), they ask the targeted employees to submit resignation on their own. The intention is to show the involuntary exit as voluntary attrition to the outside world.
The main advantage of showing an involuntary exit (termination/layoff/retrenchment) as voluntary attrition are:
1) It reduces legal complications
2) No permission is required from labour department as employee is resigning in their personal interest
3) Company does not want to follow the legal procedures under Indian labour laws for termination/retrenchment/layoff.
Due to the above reasons only, HR officers are repeatedly asking employees to resign. As a sugar coated poison, HR officer now comes with ‘beautiful’ offers such as
a. 2-3 months salary cheque on immediate basis,
b. plus a ‘generous’ offer that the exit will be shown as clean. i.e the exit will be considered as voluntary resignation, with good remarks by the management with proper relieving letter
c. even offer to find another job for the employee in the market.
1) Employee will not be given relieving letter.
2) Company will blacklist the employee and he/she will not get any other offers
3) If company terminates, 2 months notice salary will not be paid
4) Provident fund and gratuity will not be paid
5) Company reserves the right to terminate employee as per offer letter and new company policies
6) Employee will fail if they go for legal battles
We have seen in detail how all the above threats put forward by human resource officer are mere myths and they can not carry out any of the above threats. Please read our earlier series to know answers to the above queries.
What is the difference between voluntary exit (attrition) and involuntary exit (termination/layoff/retrenchment):
|Sno||Voluntary Attrition||Involuntary Exit (Termination etc)|
|1||Employee resigns on their own. Here the action is initiated by employee.||Company terminates employee. Here the action is initiated by employer|
|2||There is no pay in lie of notice period as the employee is leaving on their own.||Employee will get notice period pay.|
|3||Employee will be provided with proper relieving letter||Employee will be provided with termination letter. Company will not mention any reason related to performance in this letter. They usually specify termination is carried out due to role becoming redundant|
|4||Employee has to serve 2 months notice. In other words, employee has to work 2 months in the company. Some companies relieve employee on the same day also||Employee will be terminated on the same day.|
|5||Provident fund and gratuity will be paid||Provident fund and gratuity will be paid|
|6||No permission to be sought from labour department||Company (with more than 100 employees) has to get prior permission from labour department if they want to terminate.|
I hope the above comparison will give you fair idea about why company is repeatedly asking employees to submit self-resignation. You try to list down the various reasons you can think of. We will cover them in detail in the next part.
Please post your comments for this article and if you have want your queries to be answered as part of this series, please e-mail us.
– Shyam Sundar