Wednesday, December 10, 2008

Recession hits Indian workers

The recession in the United States has caused many companies to sack employees. Companies are sighting low consumer demand as a reason for laying off. Industries worst hit are Textiles, Automobiles, Information Technology (IT) and allied industries. Labour unrest is beginning in Tamil Nadu, in industrial hubs like Hosur, Coimbatore and Ennore. This will have a bearing in the upcoming General Elections.

T. Narendra Rao, General Secretary of the Water Transport Workers’ Federation of India and member of the Communist Party of India- Marxist (CPM), says that his party is taking this issue to voters in their campaign through street corner meetings and public meetings.

According to Rao, the Left’s constant opposition to Foreign Direct Investment has partially insulated India from the full impact of recession. “Only the Left had foreseen this. No other party can take credit for it,” says Rao.

According to L. F. Vincent, General Manager, Carborundum Universal, the recession has reduced the bargaining power of workers. Increments to blue-collar workers are largely made according to their bargaining power rather than their performance on the company’s profits. “Workers are groomed to follow might-is-right tactics. But with the recession, even their strikes against sacking are ineffective because factories don’t need their services as production has been cut.” says Vincent.
Vincent adds that the worst hit, are workers who were due for wage negotiation. They have lost their jobs instead of getting increments. Industries like Steel, which enjoyed a boom in the last three years are now passing off the entire burden of the recession on to their workers. Public Sector Undertakings and companies with strong trade unions are not laying off though.

This worries union leaders like Rao. Only 7% of workers are in the organised sector, says Rao. “Strikes are useless as temporary replacements are easily found. We are now trying our best to organise in the IT and the unorganized sector.”

Advocate V. Krishna Ananth says the law in this matter clear. “For instance, where the management decides to layoff a section of its workmen for a particular period of time, such workmen are entitled for a layoff compensation amounting to half the sum of the Basic Salary and Dearness Allowance and this will be applicable for a period of 45 days,” Ananth explains.

Prof. D. A. O. Abel Rajan, an Economist in Madras Christian College, says that companies are known to make unofficial payments to authorities to find a way around the law. Ananth and Vincent agree. Rajan believes that we need a right balance of economics and spirituality. “Here MNCs dictate terms to the State. This problem is of our own doing. What we need is self sufficiency. We need to re-plan our economy to avoid importing,” says Rajan.

He says that IT professionals are over paid and must be willing to suffer wage cuts. Their conspicuous consumption has contributed to inflation. “The Government needs to control the boom in real estate and regulate the IT sector.”

M. V. Krishna Prakasam, an employee of Cognizant, an IT giant says that there were fears of lay offs after Satyam Computers pink-slipped 4500 employees. Cognizant has assured job security, he says. “We recently won an outsourced contract of Pepsi, which took away 1500 American jobs. We have to contact these sacked employees to ask them about the project. It is very sad talking to them.”

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