Tamil Nadu Government says IT employees can form unions

Trade Unions never had any luck to take root in India's game-changing $118 bn plus IT industry.  There have been random instances in the past to create trade unions to fight for the IT employees cause, but they were all nipped in the bud.

A statement made  by Kumar Jayant, Principal Secretary, Labour and Employment Department to a petition filed by 'New Democratic Labour Front – IT Employees wing (NDLF)' asking for the right of IT employees to form trade unions, the Secretary has stated that,  "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."

We reached for the industry reactions, but the IT companies refused to take a stand or comment on the likely impact this statement will have on the IT industry.

However V.Balakrishnan, former CFO, Infosys wrote in Business Standard that, " I sincerely feel that Tamil Nadu government should reconsider its position on this issue and revert to status quo. As a country, today we are struggling with the biggest issue of employment generation. There are very few industries which can create jobs at a scale. We should not kill the golden goose to achieve certain short-term political points. One of the reasons the industry flourished was because the government never really understood and interfered in the industry. I think it is in the government’s interest to leave the industry alone for it to prosper. One consequence of this would be that the industry will be skeptical on expanding further in Tamil Nadu."

Balakrishnan has a valid point.  A 24/7 mission critical industry such as IT cannot be compared to other core industries - like factories - wherein the workforce skill-sets are totally different. IT is purely a knowledge based one and bringing under the ambit of an outdated Industrial Disputes Act of 1947 does not augur well for the growth of the industry.

Interestingly last month a sacked HCL Tech staffer moved his case in a court here in Chennai and received a favourable judgment. Read: Industrial Disputes Act Covers IT.

The IT industry by and large see this development as a retrograde one and consider that  it will create an unfavourable investment climate going forward. Per se they see that if this development takes root in Tamil Nadu or elsewhere, it will impact new investments going forward, but that said, the IT companies on their part must also address some of the genuine HR concerns the employees in this industry faces. A section of IT employees ask for a common platform.

Clearly the jury is still divided and time is now for IT companies to take a definite stand on whether we need unions or not. Hope a healthy debate ensures instead of dismissing this development as an aberration.