COVID-19: Forced Resignations, Termination of Contracts in IT Industry in TN

The employees of Information Technology (IT) and IT Enabled Services (ITES) have started to feel the impact of the COVID-19 lockdown. The contract workers of major and mid level companies have started receiving emails and telephone calls informing them of the termination of their contracts. Many other companies have resorted to pay cuts and modifications in leave policies for the employees as a means to reduce expenditure. 

The multinational companies (MNCs) and mid-level companies have adopted the strategy of reducing employee strength and curtailing benefits to balance their profit margin. The MNCs have performed well during the last quarter. The motive of these companies seem to be to make their shareholders happy by compromising on the rights of the employees. 

Rajesh* (name changed), a resident of Chennai, received a call on April 22 from the HR executive of Mectus Systems India Private Limited (MSIPL) informing him of the termination of contract with the company. He has been working with the company for the past two years on a project for Valeo India Limited. 

Rajesh, while speaking to NewsClick, said, “I was informed that the notice period has already started from April 10 and my last day in office would be May 9. We are around 30 employees engaged in this project and the termination has come as a shock to us.”

Incidentally, Rajesh and a few tens of his friends are the first batch of contract employees working for Valeo through MSIPL from Chennai. Rajesh has also received an email from his office regarding the termination of contract. 

Alagunambi Welkin, general secretary of Union of IT and ITES Employees (UNITE) said, “This is highly unfortunate that the companies have decided to end the contract of several workers abruptly. The projects have come only to a temporary halt due to the pandemic and all the works are set to restart soon after the lockdown is revoked.”

The curious case of Valeo is that the organisation works on futuristic technologies and is a pioneer in the field. “The work on such technologies will immediately start once the fear of pandemic is over. The termination of contract may affect several employees out of one lakh employees working for Valeo across the globe. The termination itself is unwarranted given the temporary nature of the COVID-19 threat and the projects carried out by the company,” Welkin added. 

Another organisation eNoah iSolution Private limited with offices in Chennai and Coimbatore too have retrenched employees. The affected employees have approached the UNITE following the sudden retrenchment. The sudden retrenchment is set to affect the employees psychologically and financially. Such job cuts will drastically increase the unemployment rate in the country which already has been soaring.

The organisations are using the COVID-19 outbreak to terminate the contracts and force employees to resign. The balancesheets of most of these companies are strong and the inhuman acts at the time of a pandemic are being carried out to improve profits.

Some of the companies have started exploring the option of work from home in the long run. “The companies are planning to explore the possibilities of adhering to the international security standards. The execution of such practices need a data protection act, while our country is yet to have one,” said Welkin.  

The act would give complete powers to the employers to track the employees and their activities. This could further snatch the minimal rights of the employees in the IT sector, a vast majority of which remain unorganised. 

The action of these companies also go against the directives of the Ministry of Labour and Employment (D.O. No. M-11011/08/2020 dated 20th March 2020).

The UNITE has represented the issues to the central and state ministers for labour and employment as well as to the Labour Commissioner. The directive of the Labour Ministry clearly directs the companies to refrain from retrenchment or forced resignations with specific reference to contract and casual workers. 

The directive seems to have no impact on the attitude of the companies, inclined more to satisfying the expectations of the shareholders by improving profits and not on protecting or ensuring the livelihoods of the employees.

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