Will Trade Unions Matter In The Age Of Automation

by Sohini Bagchi    Nov 10, 2017

The Karnataka government’s recent approval to allow the formation of the State’s first IT union may slow down hiring but could force the industry to look at alternatives to layoffs. 

The Karnataka government in October 2013 exempted IT companies from labour laws for another five years till 2018. However, unemployability of techies and massive job loss owing to automation and other global policies have made a section of employees realize the need for collective action. This week, the Labour Commission finally gave its nod for the formation of Karnataka State IT Employees Union (KITU). 

trade union

Many employees referred to these layoffs as unfair termination — meaning that they were not given a fair opportunities to prove their work. This has enraged a section of laidoff employees and associations such as KITU and Federation of IT Employees (FITE) have come into fore.

While there are no official numbers on layoffs, FITE estimates that 60,000 workers have lost their jobs in the past few months. According to a study by McKinsey, around two lakh techies are expected to lose their jobs every year. According to the research reports, job cuts in IT sector would be around 1.75 lakhs and 2 lakhs annually for around next three years. 

Read more: IBM India Trims Workforce; Indian IT Fears More layoffs

In recent months, insecurity has been running high among India’s IT employees owing to automation and job loss. The move to form unions have also been voiced out regularly this year as companies such as Cognizant, Infosys, Wipro, IBM and others recently resorted to lay-offs, in an effort to show improved profitability as they go through a shift in business model. 

J Jayaprakash, a member of FITE said, “Since we ourselves are IT employees who have started this, people trust us to take up their issues. It is a homegrown solution to their problems. The companies call this ‘trimming the extra fat.’ “But they do not realize that each and every employee has a family to support,” Jayaprakash said in a statement.

Another IT executive said on condition of anonymity that the entire thing about automation and laying off staff is kind of constructed. “With automation underway, IT employees, who are generally skilled workers, need to be retrained and not sacked at this rate.” Moreover, he pointed out that the actual number of employees being fired are much more than those reported by the companies. 

In other sectors, such as in banking, manufacturing and healthcare, issues like pay, career trajectory and job security were addressed by forming unions, but those drawn to the IT sector have been resistant to this approach. With plenty of jobs available in the sector, workers, even if mistreated, choose to keep quiet rather than risk spoiling their careers by organising themselves.

Read more: Global Headwinds Hit India’s IT Growth: Report

However, many industry watchers believe that this move by the government of encouraging unions will not solve the problem of job loss. “It is a very wrong move, will have a bad impact on the industry and goes back on the promise that the government made earlier,” TV Mohandas Pai, former CFO of Infosys, told BusinessLine. “In fact, it will hurt job creation as companies will think twice about the inspector overhang,” said Pai.

According to veteran journalist and Founder-CEO, Trivone Digital Services, L. Subramanyan, “Workers unions were an idea mooted to prevent exploitation of blue-collar workers by the owners. Back then, the establishment owners were were not only a tad reluctant to pay not just fair wages, but also scrimped on paying extra wages for the extra hours that the workers put in. Consequently, the government, in all countries, brought in an element of fair play, by legislating and allowing the workers to form unions to ensure collective bargaining.  

“Now compare them with the typical IT employee, graduating, probably from an engineering college and has been paid as per industry norms (or even ‘more’ than industry norms) and have very clearly defined working hours. In most cases, these folk get transport from to the place of work, get to enjoy facilities such as campus cafeteria, corporate HR interventions such as paid leave, insurance, gratuity, provident fund etc. In many companies, they also have access to medical facilities, counseling facilities too.  

Now these folks want a union to force the management of the IT services companies, who, due to whatever reason (Trump, Brexit, declining sales) want to tell the employee “Thank you very much. Here is your severance (which is more than what is generally stipulated by law), we can’t afford you anymore,” he regretted.

Is co-existence possible?

Nonetheless, technology and trade unions do exist. WashTech represents a portion of Microsoft employees. Alliance@IBM, possibly one of the oldest computer technology unions, represents IBM employees. Then there’s IEEE for electrical engineers that has some union-like characteristics, aimed at bettering the programmer and technical workers who operate on their own. But these groups represent a tiny fraction of the total workforce.   

While trade unionism need not be glorified in any sector,  IT employees have realized that it is a fundamental right of an Indian citizen (under Article 19) to form associations or unions in an effort to challenge HR practices of IT companies. As employment editor of Financial Times, Sarah O’Connor noted, “No matter how much IT sector can boast of its ‘independence, must realize that for every dot-com millionaire, there are most likely a thousand IT employees that will never see an IPO. These are the workers that struggle as contractors and freelancers, often without benefits or job security.”

In such a scenario, only organized unions could come as a rescue towards progress for IT workers - helping employees realize the need for collective action.