Emergence of IT & ITES – Effect on the Labour Laws

India’s emergence as the 4th largest economy as also a contender for a seat in the UN Security Council is the result of the high pace of economic development that it has achieved in the current phase of liberalisation. In the course of fifteen years, India has come to be acknowledged as the IT hub-centre, supplier of skilled workforce to the world, etc. It has also regained its position as the spokes nation of the developing world. On the other hand, India is poorly placed in terms of human development index. The development of social capital is inadequate and worst is its access, as it remains confined to urban areas and to rural elite. For majority of population, more so those who earlier constituted part of the Organised Sector workforce, the emerging conditions can’t be worse. The informalisation of work, skill obsoleteness, absence of any formal social security has left them in a state of desperation.

The direct affect of informalisation has been deterioration in respect for labour rights. The provisions of large number of labour laws remain non-enforced. The adherence to the core labour standards remains good in paper only. The desire to get more FDI and pressure from the MNCs have caused the government to overlook violations. Further the trade unions are divided on political lines. There are however, increased activities among non-mainstream labour organisations, but then they are not influential on the policy-making levels. The declining size of workforce in the organised sector, with dwindling support from the government against an aggressive employers have further enlarged the size of workforce that is not in receipt of benefits of legislative protection as also of government’s labour welfare policies.

The available discussions in the ITES-BPO sector in India strongly suggest that the sector is characterised by some degree of `representation insecurity’ or `voice-insecurity’. Near absence of trade unions or similar organisations in the sector, till recently, is reflective of this aspect. Striking absence of collective bargaining and social dialogue institutions, dismal scenario labour law implementation and a strong inclination of the firms towards managing industrial relations on an individual basis, technologically aided surveillance mechanisms and so on cumulatively led to a situation, where the industry is characterised with totalisation of labour control or the `end of employee voice’.

The dismal profile of trade union activities in the outsourcing sector of India, during the early phase of the industry, could be due to a host of reasons, which include unique profile of the workforce engaged in the sector, atypical nature of work and work organisation, mobile nature of work and high rates of turnover of the industry. Issues related to the newness of occupations in the sector (and thus, lack of experience of stakeholders in tackling the issues) and so on. Some of these aspects are elaborated subsequently to arrive at certain conclusions on the organising issues in the sector.

The business and technological modernization such as particularly web-based service outsourcing, should not be undertaken at the expense of labour, that is, by pitting workers against workers everywhere and rolling back labour rights through a race to the bottom, ignoring the universal core labour rights (freedom of association, collective bargaining, non-discrimination, non-use of forced labour and elimination of extreme forms of child labour) and forgetting that the end-all and be-all of any economic development is the improvement of the lives of the working people.

The well documented job turnover rates in the ITES sector, the highest among industries, only show too well that occupants of these ‘highly-paid’ jobs find their jobs difficult, boring and undesirable in the medium and long runs. Decent working conditions are a prerequisite for good and reliable service provision. To make these jobs sustainable and minimize costly turnovers, the owners and managers of call centers, BPOs, software and IT companies as well as governments have to address the human resource concern and respect the basic rights of these employees to establish trade unions of their own choosing and bargain collectively as provided for in the respective ILO Conventions.

It is also widely acknowledged that the lower degree of trade unionism or collectivity among the workers is closely related to the technology aided work organisation and controls practiced in the sector. The work arrangements and interactions at workplace are pre-designed and implemented, leaving the workers minimum scope for any `undesirable’ socialisation aiming at organisation or formation of employees collectives . The employees have to work continuously and in their endless run after work targets, they do not even find any time for thinking about collectivity and trade unionism. The HR practices in the ITES-BPO sector indicate a changed paradigm of personnel management vis-à-vis that of the conventional manufacturing/ service sectors. The task of camouflaging work as fun is vested with Human Resource (HR) managers. They pay attention to a host of issues, varying from hiring the right people to charting out their career options to the employees.

Agreements between companies and unions at the national level should ensure the following:

o Job Security: Companies should immediately cease proposals to outsource, offshore or contract out work that will result in the forced lay off of workers.

o Redeployment: Effective redeployment must be undertaken protecting career value and terms and conditions of employment.

o Labour Standards: Companies to which work is outsourced must observe all the core labour standards of the ILO. These are in particular the rights to organize and bargain collectively. Moreover, we need mechanisms to monitor observance of standards; they must include the trade unions and their global union federations.

The ITES owners and managers, governments and relevant international bodies have to consider the adoption of a universal charter. Recognition of a universal charter with clauses respecting minimum labour standards, core labour relations rights, healthy and safe work conditions, ceilings on work hours and employee representation are essential to protect the interest not only of the ITES employees but also of the ITES industries themselves. They are the key to the stabilization of jobs in what is otherwise seen as a ‘transition industry’.

It is evident from the above that due to multiple factors the penetration of trade unions in the ITES-BPO sector of India has been minimal in the first phase of advent and growth of the sector. However, it would be wrong to conclude that this sector would continue to be a trade union-free zone for years to come. Already there are spurts of organised collectivity among BPO workers in different parts of the country.

The recent clarifications of government that all the labour laws are equally applicable to the sector and the ongoing efforts of Government towards effective policy formulation are also suggesting towards the emergence of a more encouraging framework for healthy trade unionism in the sector. Thus, the approaches of various stakeholders towards collectivity in the sector are gradually changing and the worker associations are increasingly being viewed as desirable institutions to improve workplace relations and social dialogue.