Wipro’s latest Layoff Gambit – Where do Employees Stand?

As the fight against forced resignations, illegal layoffs, and terminations in IT sector continue, company managements come up with new tactics to harass employees. Recently we received information that several Wipro employees are getting “Discharge Letter”. Wipro management is depositing 2 months salary in employee’s account and then issues this letter. The letter says that the employees is discharged from service with immediate effect. The employee is asked to surrender ID card and leave the office.

In one week, we have received specific details of atleast 5 employees who received discharge letter (we estimate that the actual number would be several orders of magnitude higher). The format of the letter is the same for all the 5 employees. The letter does not mention any reason for discharge other than the clause in employment contract. Letters are sent by e-mail and also by registered post to employee address. The last date for completing formalities is set as 25th Sep. Employees are not targeted based on appraisal rating, like earlier. Some of the employees who got this letter are not given low ratings in appraisal.

Some general legal points (Our legal team is preparing more detailed case histories on these)

  1. Company can not retrench employees like this. They have to follow retrenchment process as per Industrial Disputes Act.
  2. This clause in the offer letter is a standard one for all employees in the company. Company cannot pick and send out a few employees in an arbitrary manner.
  3. Mass retrenchment plan in any enterprise employing more than 100 persons, should be communicated to the concerned labour department and permission obtained from the government. In such a retrenchment, last in first out principle should be followed and it should not be used to selectively layoff experienced, senior employees.
  4. Sufficient time should be given to employees. Sending out employees within a day as mentioned in discharge letter is not legal.
  5. If affected employees join the union and take up legal fight, possibility for win in favor of employee is quite high.

But the following questions remain

  1. If retrenchment is easy as specified in the discharge letter, why Wipro did not choose this method earlier?
  2. People who are part of petition filed by NDLF IT Employees Wing under section 2K of Industrial Disputes Act did not get discharge letter. If company has the right to discharge, why they are not sending discharge letter to employees who filed 2K petition?
  3. If this technique is so simple, why other companies are not using this method to send out employees?
  4.  In an earlier article by our president Shyam Sundar, it was mentioned that company cannot send out employees citing terms of employment contract and that the law of land supercedes individual company contracts. If this is the case, how Wipro send this discharge letter?
  5. Wipro has a strong legal and compliance team with highly paid legal experts. If sending out employees in a single day without any reasons is not possible, how Wipro’s legal team recommended to Wipro to take this option. If chances of employee win is 100% in legal fight, why did they recommend this course of action?
Rishad Premji, Chief Strategy Officer

Rishad Premji, Chief Strategy Officer (Is Service Discharge letter with 1 day notice applicable to CSO also?)

Based on discussions we had with affected employees we deduce the following.

When major layoffs were planned in April by Wipro, last date was set as June 30th for all employees. Performance appraisal was cited as reason in these layoff discussions (forced resignations). Employees were given 2 months notice period. For some of employees, who submitted resignation in May, their last date is set as Jun 30th and 1 month salary was credited for the remaining 1 month notice period. There are many recording of conversations with HR available which suggest that the management wants to meet the target for the quarter and wanted all targeted employees to go by June 30th.

But as the campaign against this unfair and illegal labour practice gathered momentum, many employees targeted in that plan joined NDLF IT Employees Wing. They resisted the pressure and refused to resign. Some of the employees who were forced out earlier filed petition under section 2A of Industrial Disputes Act under union guidance. NDLF IT Employees Wing filed a petition on behalf of affected Wipro employees under section 2K of ID Act complaining about non allocation of project, variable pay cut and harassments.

Wipro team has a target for layoff in each quarter. As the next quarter end Sep 30th approaches, Wipro management wants to send out next list of people before the quarter ends.

But, as explained above many more people have got awareness about labour unions, Industrial Disputes Act and rights of employees. The possibility of employee refusing to resign when threatened by HR is high. If many people resist and refused to resign it creates complications for the management’s plan. Hence, the management did not want to give any breathing space for employee to think as earlier. That is why Service Discharge letter method is followed.

Azim Premji

Wipro’s money and your wealth did not grow on trees, Mr Premji. It grew on the sweat and toil of employees. Please respect them.

Wipro managements knows very well that legally there might be complications if they send out employees based on discharge letter. But they have taken this chance only because they believe, if they send discharge letter to 2000 people, only 10-20 employees will take up the fight. They may have to reinstate a few of them, but in the larger picture, they meet their quarterly layoffs target.

There are no prior legal cases about IT employees being fired based on offer letter. Wipro team will argue that they followed terms in offer letter. They are taking the risk of losing and having to reinstate 10-20 who take up the fight.

So this is another technique used by Wipro team to layoff next set of people. Companies use various techniques to terminate people. This can be stopped only when more employees come forward to strengthen the union and intensify the legal and political struggle.

It is interesting to note that one of the employee who got discharge letter did not agree to resign and company has not terminated that employee so far.

We need to spread awareness to all employees about the legal rights. It is the responsibility of each one of us to spread awareness to fellow employees. We request people who read this article to forward to all your friends group. If we fail to act, we will see the repeat of same act by December end (next quarter end) where a few thousand more employees will lose their jobs.

IT employees should come forward and join NDLF IT Employees Wing. Unions have the legal, organizational and mass political base to take up the fight for the employees rights.

– Spring Thunder