Economic Highlights

New Delhi, 5 February 2009

Economic Slowdown?

FIRMS RAKE IT IN, WORKERS LOSE OUT

By Shivaji Sarkar

It is a critical year, says the corporate world. But more than them, it is the workers all over who are struck by their calamitous moves. Sadly, while everyone talks about saving a corporate, nobody is saying much about the poor worker. He is either losing his job or his wages are being cut, and the corporate are devising new ways to deprive him of his livelihood. There is nobody to protect him. The instruments of the State have not been dismantled and neither are these being utilized.

This is not to say that the corporates are not in a state of shock. It is more for their own misdeeds than the failure of anyone else. Some of them are now showing losses. But most of them were already in the red or had siphoned away a major chunk. The loss is of the company and the owner whether Ramalinga Raju or anybody else is by and large personally insulated from it. It does not affect their fortunes. However, most corporate are not suffering losses either.

The owners have amassed wealth that should have gone to their company, shareholders and employees. Conceited operations have deprived the rightful claimants. It does not matter much whether they are in police or judicial custody. Unfortunately, the worker is not so lucky. His life verges on criticality. The corporates treat him as the bête noire. Losses for managerial follies or manipulations are heaped on him.

The companies are not in losses. A myth has been created. At the aggregate level, 562 companies listed at Bombay Stock Exchange in January-end, have increased their revenues by 15.6 per cent. Companies, however, say their profits are contracting but they are not in losses.

Reserve Bank of India also in its study found that 2072 companies did robust business till September 30 last year. It notes sales growth at 32.4 per cent – higher by almost 15 per cent than a year ago. But it states that a deceleration had set in owing to high selling prices. This clearly means that the companies had jacked up the prices without taking note of the purchasing power of the people.

Most Indian companies work at high profits. A little contraction is not harmful to them. They have to learn to work on low profits to keep prices at affordable levels. It is sad that they extort both the consumers and the worker. Under different industry lobbies they all gang up to extort various concessions from the Government. But when it comes to implementation of official rules and regulations, they look for cover. Ironically, they quite often blatantly say they are “private” companies and no official rule can be thrust on them. They easily forget that they are being funded by public and government financial institutions.

Worse, the Government agencies succumb to their blackmail. Neither the labour nor the Provident Fund commissioners act against them. The RBI says that expenditure of companies has grown owing to higher raw material costs. But the price for it is being paid by the employees though they only form only 7.6 per cent of the total expenditure. 

Almost all companies are violating the laws while reducing staff.  Most companies are not paying the legally mandated compensation. Others are resorting to devious means. Even some of the large companies such as the Tatas and Mahindra & Mahindra sacked employees who were working as casual for years together. It saved the companies money, as they don’t need to seek permission to remove casual workers.

Infosys is laying off workers without terming it as such. It has offered the employees to take a sabbatical from the company and receive 50 per cent of the wages. What else is a lay-off? No Company can lay-off workers without permission of the labour commissioner. Infosys HR Director TV Mohandas Pai has said that the effective way would be by using an outplacement agency and seek opportunities for them before laying them off.

In the scam-tainted Satyam, workers moving out are unlikely to be paid their gratuity and leave encashment. As gratuity is a deferred pay and is governed by the Gratuity Act, Satyam should have made a separate fund for the purpose. The move will affect the savings of the employees. In such circumstances, the law has provisions to prosecute the management for the glaring lapse. Will this happen?

The Indian unit of Agilent, one of the world’s largest measurement and testing software company has made two days of leave every month mandatory for its employees. Those who have no paid leave left would have to go on leave without pay for those particular days every month, says Agilent India country manager V Valluri. The company also announced a two-week vacation for its 1800 Indian employees. It is an arbitrary function and violation of labour and industrial laws. Is anybody listening?

Max New York Life Insurance is “re-hiring and retraining its employees” In effect it means the existing employees are being sacked and re-employed, obviously at lower wages. It is a devious technique. Ostensibly no law is violated though in reality it is. Pepsi has merged food and beverage divisions to “derive manpower synergies” and stave off costs. A few years ago it had outsourced many works to vendors and made its employees work for the vendor.

Thus, the pinch is being felt by workers in the best of the companies. Latest estimates say that five lakh more workers are to lose their jobs by the next two months taking the numbers to over 15 lakh. At least another 10 lakh, possibly more, have lost jobs in the unorganized sector. The situation is thus putting the pressure on the farm sector as it is getting flooded with workers, leading to contraction of wages.

India thus is not far behind China, which has dismissed 20 million workers. The question is: why is this being allowed in an election year? Is the Government pro-people or corporate? Importantly, a bigger question is: when corporates are not serving the cause of the nation why should the national government stand by them? ---INFA

 (Copyright, India News and Feature Alliance)