Why IT Companies Allergic to Unions?

This entry is part 2 of 10 in the series I, IT employee named Shyam Sundar



In my previous article, I have written about termination of my employment from the company for which I worked for the last 18.5 years.

There is another termination of a unionist this week. A.J. Vinod who is the president of Forum for IT Employees also got terminated last week. Last year, Elavarasan who is the General Secretary of FITE got terminated.

Vinod AJ,
General Secretary of All India Forum For IT Employees – AIFITE,
Termination date: 03/08/2020

Shyam Sundar,
Former President, NDLF IT Employees Wing,
Termination date : 31/07/2020

Elavarasan Raja
Former General Secretary of Forum For IT Employees, Maharashtra
Termination date: 12/11/2019

Why companies target union leaders and members? Are unions illegal in India?

We have unions in banks, factories, among transport workers and across various other sectors in India. Unions in IT sector exist in many other countries as well. We have association groups in local panchayaths, apartments, for petty owners and in many other unorganized sectors.

Are there any restrictions specific to IT industry?

IT companies have a union for themselves called NASSCOM. If they want to impose any restrictions, it is only for employees.

There are no specific labor laws applicable to IT sector. But, all labor laws applicable to other sectors hold good for IT sector also. On behalf of NDLF union, we filed a public interest litigation in Madras high court and as per the court’s direction we received confirmation from the government of Tamil Nadu that IT employees can form unions and file grievances with the labour department.

This being the case, why IT companies do not like or allow unions in their companies?

To find the answer to this query, let us take a closer look at what changes IT unions have brought in the IT industry in the last 3 years.
To know this precisely, we should take a look back and see how terminations happened prior to the evolution of IT unions in 2015.

IT companies have employees count in the form of pyramids. They add junior employees who are freshers at the bottom of the pyramid.As and when the employees gain experience, their salary is increased and they slowly move up the pyramid. As the shape of the pyramid becomes flatter, companies decide to reduce senior employees and make the pyramid sharper again.

To this end, they used their appraisal systems unfairly and tagged many senior employees as non-performers without any basis. They used to give 2-month notice to these people and ask them to submit their resignation. If any employee resists the management decision, the management (HR) submits resignation on behalf of the employee and force them out of job.

In the past, only in very few cases affected employees fought against their employers such illegal activities. Companies did not pay any severance package for their long service with the company also to such affected employees.

Then, after 2015,  came unions like NDLF, FITE, UNITE and started to create awareness among the employees.

  1. On behalf of NDLF, we published more than 400 different articles about various challenges faced by IT employees. We explain legal rights of employees and the advantages of unions in these articles. We give step by step guidelines on how to face illegal retrenchment. We published this information after consulting with labour lawyers who support our union.If you google with any issues related to issues faced by IT employees like layoffs specific to companies, appraisal threats, long working hours, women employee issues, we can find these articles popping and helping IT employees. Unions are creating repository of awareness for IT employees.
  2. As the second step, we started organizing employees as unions. In IT sector there are restrictions on employees not to disclose any employment related information to others. Employees are not allowed to share their salary structure, appraisal rating or increment details to others as these information are termed as confidential. In all other sectors, these things are public and open.As awareness about unions and their rights spread, people who received unfair lower ratings and were facing illegal job threats approached unions.We raised concerns to labor department about the illegal practice of submitting resignation in the system on behalf of employees as part of specific cases.
  3. As the third step, we helped these affected members by providing legal help. We have lawyers in different unions who specialize in labor laws. We help employees to file disputes and cases against illegal retrenchment by their companies

These are the 3 important changes which unions brought among IT employees. True, many employees have much hesitation in joining union until their job is affected. But when their jobs are at risk, they started approaching unions. This started creating issues to the leading companies.

But, the reality is that even now only less than 5% of employees are approaching unions when they face job threat. The sad part is 95% of employees fall prey to the management threats and submit resignation.

Many of them succumb to mental pressure. There is a survey which illustrates that more than 8000 IT employees in Tamil Nadu committed suicide in the last 5 years and major reason for these suicides is job loss of the employee. A recent victim is a techie from Pune.


Till about 3 years ago, there is no practice of giving severance package to senior employees who are asked to go by the company. But now the practice of giving severance package to senior employees is prevalent across all leading companies.

Companies are offering 15 days severance pay for every year of employee service. Some companies are paying severance pay of 1 month also for every year of service. But the issue here is this 1-month salary is not based on gross salary but based on only few components of employee’s salary stack.

There is an audio conversation with HR and employee that was published in our website about the severance package offered by a company here in India. IT employees who are not part of unions are also receiving their severance (even we did not support) by various issues created by IT unions

Thus, unions are directly or indirectly helping employees in many ways and naturally it affects company profits and hence it was resisted by companies. IT companies did not like even these 5% people to fight for their legal rights. They consider that unions are the root cause of the legal challenges they face and started terminating senior union members. That is the reason IT companies are targeting union office bearers.

Due to the pandemic situation, it is not possible for unions to show their protest or take immediate legal action. Companies are using this pandemic time to retrench union office bearers.
But this is a paradigm shift and definitely rise of unions cannot be stopped for long in IT industry. Strengthening of unions only will make IT a safe place to work.

In the first part, I have given a hint about Tholar Palanichamy’s story. As the news of Vinod’s termination was received, I wrote about this second part about union’s role in IT sector. We will continue in the next part.

– Shyam Sundar


Series Navigation<< “I, IT employee named Shyam Sundar”The Dilemma in Taking up the Legal Fight when you are terminated. >>

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