Tamil Nadu Govt allows IT (information technology) to form trade unions it is expected that this decision may have a long-term impact as automation begins to hit demand for labour, experts said.
Until now, the IT sector has been completely exempted from this law compared with the manufacturing industry, which is highly unionized.
Acknowledging employee rights for a strong 4.5 lakh IT workforce in Tamil Nadu, state labour secretary Kumar Jayant in reply to a petition by the labour union wrote, “IT company employees also are free to form trade unions and redress their grievances through evoking the provisions of the Industrial Disputes Act 1947. Any trade union with IT employees as its members can rise industrial disputes under section 2 (k) of the act and seek remedy,” said a Economic Times report.
Trade unions, which have been restricted to factories, have been trying to get a foothold in the $118-billion IT sector that employs nearly four million people, the ToI report said.
However, former Infosys board member TV Mohandas Pai has strongly criticized the move. Since IT industry caters to global marketplace thus it needs certainty, therefore IT sector needs 24×7 service said Pai.
“If you don’t have proper legal protection for work to be done in 24 hours and you are susceptible to several demands from employees, then, it is going to be troublesome,” he said.
The move is not expected to increase costs for the IT companies, but experts fear the sector could become uncompetitive over a period of time.
According to Pai, the IT sector has become a mature industry now. “It handles a lot of critical functions and if there are some things like this, I think it is something that they have to keep an eye on,” he said.
When industry major TCS undertook a severe retrenchment exercise to cut its workforce, various labour unions had mobilized IT employees in Tamil Nadu following reports of massive downsizing by the IT giant.
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According to Business Standard, the idea of forming an employee’s union was tried earlier too but failed miserably. The reasons are multiple. One it is a global industry which hired best talent purely on merit. Second, the employees are highly skilled and hence always carried a market value which reflected in greater attrition in the industry. Third, these are white collared workers who are averse to joining a formal union to assert their rights. They were always pampered and were paid the best in the country with all attendant benefits.
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The industry will be skeptical on expanding further in Tamil Nadu. It is not a good sign for the new government which had just taken over with the key plank of creating greater investments and jobs. I hope good sense prevails.