When around 200 employees (whom the company calls trainees) were laid off from Renault-Nissan factory in Oragadam, and AAP conducted protests on their behalf, there have been several questions raised to us, by some of the public. The below is an attempt to address some of these: 1. AAP got into Renault-Nissan dispute after careful investigation of the facts. The facts are in the favor of the employees who were terminated. These are: a) The company (and others in TN) have the habit of calling a high portion of their workforce as “trainees”. The company’s stand is that as trainees these workers have no legal rights. But the company is wrong - CALLING someone a trainee does not mean that that person becomes a trainee in the eyes of labor law. The judgements in this case from the High Court and SC are clear - a worker can be called a trainee ONLY if they were actually being trained. The law has several ways of finding this out. If a worker does production work (as the Renaul-Nissan workers did), then what the company CALLS them is irrelevant b) If they were employees, then a high portion of them were terminated at the same time. If a company has financial problems, they can layoff workers. BUT, they need to get permission from government. Further, they cannot layoff workers in mass and then also RECRUIT workers for the same job. The labor law is clear in this regard. This law exists because companies can keep clearing out workers when they are eligible for higher pay; and keep recruiting lower paid workers. Ultimately this is harmful not just to labor, but also to society. If the company needs casual labor, then they are free to recruit them - with the risks that come with employing casual labor. c) The company itself has never said these workers were laid off because they were “bad performers”. Many of these workers received bonuses for good performance. Therefore, it is clear that the company simply retrenched these workmen to avoid higher pay. This is against labor law. d) The company also targeted workers who tried to protest this action with the HR. This targeting is ALSO illegal under labor law. In other words, most people who have commented against this in social media do not seem to understand that if a company acted against labor law, then they should face action. That action can come under many forms, including protests. 2. Now, let us consider some additional, more general arguments. In general, when companies lay off people, labor law distinguishes between a layoff - in which case the company is losing money; and a firing - in which case the employee is at fault. Companies have many ways to try to blur this distinction, and it is always a fight to get them to comply. For example, as mentioned above companies designate regular employees as trainees, so that they can “hire-and-fire”. But, as explained above, this is not allowed under labor law. One way in which a labor dept tries to find out if a termination is a layoff or a firing is to see how many people were let go; and how sudden it was. In the Renault-Nissan case, the company itself has not said they were let go for bad performance. But what happened is clearly a layoff, mainly to save money for the company. The company did not wake up one day to find out 200 employees who were just on the step to permanent jobs and a salary hike were “bad performing”. This is too much of a coincidence, and this is the logic a labor commissioner would use. Here also, the AAP took the right decision. 3. Ultimately, is it true that to get MNCs to invest in India, we have to enable “hire-and-fire” policies? Let us consider the bigger picture. India has no social security for unemployed people. It has no universal health insurance. Therefore, laborers in India are desperate to keep a job. As long as this desperation exists, we cannot say that somehow labor has an upper hand in India. In reality, MNCs invest here for several other reasons, including heavy tax breaks by the TN government, and good quality of the labor force. It is possible that MNCs would prefer bonded labor to be best for investment - so should the government bring back bonded labor? Obviously not. Investments to India are not threatened in any way by some imagined labor instability unique to India. 4. There is also the perception that Indian labor force is spoiled and somehow more prone to strikes. This is untrue, even given that Indian labor’s situation is really bad, because the government provides them NO social safety net. When the Renault-Nissan workers went to protest, it seems the Oragadam Inspector told them that “The Japanese are used to discipline and not shouting in the streets like Indians.” This is completely false. Nissan, Toyota and every other automaker in the world faces labor strikes and disputes in the US, Japan, France and so on. Those workers actually have a better chance of survival than Indian workers. 5. No democratic country in the world allows “hire-and-fire” policies. The US certainly does not. Therefore, Indian commentators should stop arguing that companies “need” to recruit and fire workers when needed. 6. Above all this, if companies NEED such policies, they should be honest about it. Why not tell workers when they join that they can leave any time, if they want; and they can also be fired any time if the company wants? Yet no company does that - because they know very well that their quality of work will drop drastically if they announced they can fire at any time. That is, companies NEED stable workers. They know this very well. 7. Labor law does not exist just for illogically harassing corporates. Labor law, a minimum wage and a stable job are needed for both companies to succeed; as well as for a stable society. 8. Let us not forget that Renault-Nissan and several other corporates get enormous government benefits. They get much more benefits than the poor workers who work for them ever get from government. The whole purpose of such benefits is so that the companies work in public interest. If they are so profit motivated and super-competitive, they should not be begging government for tax breaks and free land, water and electricity.
Posted on: Sat, 18 Oct 2014 15:08:12 +0000
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