Way back in Sep 2017, we published an article about a layoff in the Bangalore location of Wipro. The laid-off employee’s received 2 month’s salary in their bank account and while they were wondering about the extra money, they were called for a meeting with HR and were informed that they were terminated. The management gave a plain reason for their termination, they said that since those employees fall under the category of supervisors, and as per the clause in their offer letter, the company has the right to terminate them anytime, providing two months salary. The terminated employees were given a discharge letter on the same day and were sent out immediately.
Some of those employees fought back against their termination in the legal route. They initially went to the Bangalore Labor office. But during the conciliation, Wipro was not ready to take back the employees who were terminated. Hence the conciliation resulted in failure, without resolving the dispute. Then the employees took the dispute to the court. The hearing on the dispute dragged for more than a year and went several rounds and this article is a follow-up on various happenings based on the case.
Each of the affected employees filed individual cases against Wipro. And in all the cases Wipro argued that the terminated employee had more experience and will fall under the category of supervisor. They also quoted that the salary structure of the employees was higher than the workman limit. And they had multiple employees reporting directly to them, they had sanctioned leaves for those who reported and played an important role in deciding the salary of those reporting to them. The judgment on one of these cases was declared last week.
As per the given verdict, the court has accepted the argument of Wipro and dismissed the allegations from the affected employee. The court confirmed that the company reserves the right to terminate supervisor based on the offer letter signed and industrial dispute act is not applicable for supervisor category employee. The company is not required to provide any further compensation as requested by the employee.
This is a very important verdict in the information technology sector and in fact the second verdict after the Ramesha case in Chennai. The case of Ramesha is against HCL and the argument by the company is almost the same as the affected employees in Bangalore. HCL in its argument mentioned that Ramesha is a supervisor and does not fall under the Industrial Dispute Act. But the court in Chennai dismissed the argument from the company and mentioned that Ramesha was doing a skilled and technical job and all people involved in skilled and technical job falls under industrial dispute act. The final verdict received in two cities is completely opposite now.
Usually, when a company wishes to terminate an employee it should do only based on the standing orders defined by the government. This standing order list down various reasons based on which company can terminate its employee. The standing orders given by the government does not provide power to terminate employees under the reasons that the employee is a supervisor or citing performance issues through appraisal. In Karnataka, the IT Sector got an exemption from this standing order.
This exemption was obtained in the year 2014 and was valid till 2019 and recently the Karnataka Government has extended this exemption for another five years till 2024. This is the main difference we see between two different verdicts on this issue. We in Chennai have obtained Government order that Industrial dispute Act is applicable for the Information Technology sector. Our aim is not to comment on the verdict, but we are trying to analyze the implication it is going to create in the IT sector in the future:
1) This verdict gives free hand to terminate senior employees without any legal hurdles. This increase the risk of getting terminated for many senior employees in different companies. There is layoff news in most of the companies like Verizon, Tech Mahindra, Bank of New York Melon, Oracle Corporation and this verdict gives more chance of more layoffs.
2) We have talked with a few employees in different companies who are less than 10 years’ experience. There termination reason for them is also quoted as a supervisor and some of them have less than 6 years’ experience. The clear definition of supervisor does not exist and almost 95% population in IT has direct and indirect people reporting. So this increased risk for almost all employees in IT sector.
3) The company can transfer employees to Bangalore location if they want to terminate to offset the legal hurdles.
4) The company can give promotion to employees, make more employees reporting to them and then terminate quoting reason as a supervisor.
The above verdict is a landmark judgment after Ramesha case. This verdict is a headline news for many business magazines and we are not sure why this verdict does not reach front media attention so far. We have not disclosed the affected employee name at this moment. We are not sure of various implications this is going to create in IT employee’s life.
Wipro Limited has grown multifold due to the effort and contribution of their employees and recently Azim Premji, Chairman of Wipro has given 34% of his share for philanthropy. He is one of the first person who donated a major portion of his income for the welfare of the company. He is also awarded Padma Vibushan award for his contribution to Indian society. It is a contrary that the same company has acquired a judgment that is going to affect the lives of thousands of IT employees. We think that this verdict should not be used as a tool for terminating more and more employees in the future.
– A Senior Wipro Employee