Now Layoff news comes from Verizon. The US based multinational company lays off 1000 employees in different centers in India.
Layoffs happened in IT companies for several years and almost all IT companies were doing layoffs. But Verizon layoff is different and it gives a clear indication of what is going on in corporate companies and how future layoffs are going to happen. This knowledge will help IT employees to face layoff issues better and be prepared for the action to be taken during such crisis situation.
How layoffs happened in Verizon?
Ravi (Name changed) is working with Verizon for around 5 years and he gets a call from HR for an urgent discussion. HR asks Ravi to collect all his personal belonging from his workplace before attending the meeting. This gives a hint to Ravi on what is going on.
When Ravi enters the conference room, security officer collects his mobile. He sees a group of people along with his HR manager. HR manager starts the discussion.
He says that due to new initiatives company is reforming its employee structure and planning to lay off several people. HR manager says that Ravi is identified as part of layoff employee list. He asks Ravi to submit resignation. He says that Ravi’s employment contract is cancelled with immediate effect and Ravi doesn’t have any option other than to submit resignation. HR officer says that he will get 1 month salaryfor every year of service with the company as compensation in addition to 2 months salary for notice period.
Ravi is shocked as he did not expect this sudden end to his employment and he starts refusing the offer provided and requests time to think before taking any decision. The person sitting next to HR introduces himself as a psychiatrist and starts convincing Ravi to take the offer and that this is the best offer for him to take. He starts brain washing Ravi and threatens about various issues he will face if he resists to resign.
While discussion is going on, security officer comes to Ravi and asks him to surrender the ID card, laptop and other belongings. Ravi resists but security officer forcefully collects the ID badge from Ravi. The doctor and HR officer force Ravi to sign the resignation papers and threaten he will not get anything if he refuses to resign, his name will be blacklisted and he won’t get any future jobs. As Ravi is left with no option, he signs the resignation letter. Security officer escorts Ravi to the outside gate of Verizon office.
Ravi has a few more personal things to collect from his work place but security officer does not allow Ravi to go to his work place. His access to company is restricted and Ravi is out of the company within 30 minutes after he entered the discussion. When Ravi moved out, he comes to know that several of his colleagues are also thrown out of the company in a similar fashion.
Corporate layoff tactics changed
A few months back, an employee from Tech Mahindra got a call from HR manager and was asked to resign on the same day. The audio clip of the HR conversation went viral and later top management had to put up a sorry face about the incident. After that incident IT companies did not stop terminating employees but they are doing it with more preparation, now.
It is evident that Verizon management is not allowing mobiles in the discussion rooms to avoid any incident like Tech Mahindra employee’s forced resignation.
Illegal forced resignations scale up better with doctors and bouncers involved to avoid conflicts. We can understand bouncers are doing their jobs for pay but not sure how professional psychiatrist doctors involve themselves in such illegal activities.
This Verizon incident gives a lot of insight into how future layoffs are going to be planned.
How layoffs were planned in the past?
Employee performance is assessed as part of quarterly/half yearly and annual appraisal process. Top management will instruct managers to identify 5 to 10% of employees as under performers. In addition, management will target people who are in senior positions for specified no of years and even if they perform better in the company. These employees are forced to submit resignation in the system and if they resist to resign their resignation is submitted in the back end.
Most of the employees resigned on the very first day after having discussion with their HR manager. They are provided with 2 months notice period and are allowed to work in the company for 2 months period. If employees requested to withdraw their resignation request during the notice period, company will not agree to revoke the resignation. However, there was one small benefit to the employee with the notice period. Employee can look for job outside while working in the company not as someone without a job. However, this option also narrowed down with the recent mass retrenchments by all IT majors.
Corporate companies did not follow Industrial dispute Act 1947 and they did not provide any compensation to employees who were forced to resign. They also terminated employees who are in bench for more than 1 month.
The problem with the old approach
The main issue corporate companies faced with the old process is now IT employees got to know about Industrial Disputes Act . They understand terminating employees is illegal. They join IT unions like NDLF. They come to know the real face of corporate companies. They take various legal steps against corporate companies.
There are increasing number of employees filing 2A and 2K petition against corporate companies. If you see the past history, till 2015, we have only Ramesha case against HCL disputing termination of employment.
But in the last 1 year, NDLF has filed 2K petition against Wipro, complaints against CTS, and various 2A petitions against several companies in different labor offices.
The employees started getting following benefits after filing petitions with labour department:
- NDLF filed 2K petition against Wipro in Chennai and Wipro in their return reply mentioned that as per their policy, they don’t ask any employee to resign. There is no concept of forced resignation in Wipro.
- As per section 33 of Industrial Disputes Act, if employees approach labour department seeking remedy from employer for a dispute under section 2K of Industrial Disputes Act, the employment terms of employee should not be altered without permission from labour department. Wipro agreed and gave written guarantee that they will not alter employment terms of employees who filed 2K. As a result all employees who filed 2K are still with the company.
- Some employees were assigned projects after having kept in bench for more than 6 months. One employee got his confirmation letter which was held back long after his probation period was over.
- Resignation letters are revoked for employees who are in notice period. In previous cases, companies will drag till employee completes the notice period and show the door out to them. Now NDLF action made the company to accept the resignation revoke request with help of labour officer
- The same happened with employees of CTS and they provided projects for all employees who are not resigned.
- CTS gave offer letter from a consulting company for contract job as a remedy for some of the employee who submitted 2A petition against the company. But, under NDLF guidance, these employees took a firm stand that the they should be reinstated back in the company.
- NDLF filed legal cases about appraisal issues and cases are pending against TCS in this regard.
Increasing number of people taking legal fight is definitely becoming a big headache for all IT companies. This also put a temporary stop to terminating people in the earlier way. But companies are exploring various possibility of doing this termination in the future.
Changing HR methods to fire employees
We already gave a hint on how these layoffs are going to be in our previous article against Wipro where employee are terminated with Service Discharge letter in Bangalore. Please refer this article for details. In this method, 2 months salary is credited to employee a day before to HR discussion. During discussion, employee is provided with discharge letter and asked to leave on the same day.
These incidents reveal that termination methods have been changed by company after many employees starting going to labour courts against illegal terminations
As mentioned earlier, in the past, an employee is allowed 2 months of notice period and he/she is allowed to work in the company till notice period is over. Now the company is afraid that employees will take legal action before notice period is over and hence can not be send out. They see increased number of employees submit resignation revoke request after HR discussion. The affected employees are getting united through labour unions and started taking up the fight against the company. So the company doesn’t want to provide any breathing space to employees. They want to terminate employees on the same day.
Companies know very well there is still a risk of employees going to labour courts or taking up the fight with the help of unions. But still they are taking this chance as they feel not many employees will take up this fight. They probably get inputs from their legal team.
Several thousands of employees are laid off in the last several years and employee taking legal fight is less than 100 so far in IT sector. So they may expect only very few employees will take the fight with company. They have confidence that they can drag the case for several years and many employee will stop in the middle if they get new jobs or due to personal issues. That’s the reason, companies who make hefty profits resort to such illegal activities.
Employees unity and fight brings corporates to follow the law partially
The main difference we see between layoffs before and Verizon incident is that Verizon followed IDA process partially. As per IDA, 15 days severance package to be paid for every years of service to employee if they are terminated. Prior to Verizon incident, there is no concept called severance package in IT companies. They will give just 2 month salary and make employee work during this 2 month period and then show that they resigned on their own. Even if an employee worked for 20 years with the company, only this rule is applied.
But now Verizon paid 1 month salary for every year of service to make the termination partially legal. (But, it is still illegal as the company did not follow the process for retrenchment of employees as laid down in ID Act).
Now corporates don’t use the appraisal drama for targeting senior employees and making them quit with low performer tag. They can no longer show forced resignations as attrition which they did till recent years. Now the cat is out of the bag and employees exits are shown as clear termination cases.
This change is only due to various developments in the last 1 year. Only unity among IT employees will make corporates follow complete legal process which will safeguard our jobs and livelihoods.
We have lessons to learn from Verizon incident. Such a brutal treatment happened to our colleagues in Verizon this time and it may happen to us also soon. Unless all of us unite and take up this fight, we will not be able face such a situation.
NDLF is a registered trade union and we already have vast experience in helping affected IT employees. So affected employees should join hands and take the fight for their rights with the help of our union.
All IT employees should come forward and join our union to protect their rights.
Our industry is service industry and survives only with the hard work of employees. If several employees join hands together, companies are left with no option other than stopping illegal termination. So come forward and let us join hands together. Please send mail to NDLFitUnion@gmail.com to register your membership with us.
– Spring Thunder