The good, bad and ugly of Indian job market

Jet Airways first fired and then re-hired 1,500 employees after much political and news drama. But is the incident a pointer to the fact that many Indians face a real danger of losing their jobs? Do companies have the right to hire and fire, what are employees' rights and how protected are they?

CNN-IBN raised these important questions on The Big Job Debate moderated by Sagarika Ghose and attended by a panel comprising , Managing Partner, Counselage Suhel Seth; Jet Airways flight steward, Deepak Rathi; Congress spokesperson Manish Tiwari; CPM MP and National Secretary, CITU, Tapan Sen, Vice-Chairman, Mercury Travels, Ashwani Kakkar and Senior Vice President & Group HR Head, Infosys, Nandita Gurjar.

Question 1: Did Jet mishandle retrenchment?

Many columnists say the retrenchment was callous, inhuman and baseless and there’s no protocol for retrenchment in India. Suhel Seth said whether or not retrenchment was required was for Jet to answer. “We don’t live in a Western culture in India. We don’t send SMS to people at 2 am, saying please don’t report to work tomorrow. You have to be compassionate or at least appear to be so in India,” he said.

Seth said Naresh Goyal’s worry shouldn’t be about the men and women who had rejoined but whether or not anyone else would ever want to join Jet. Seth also said if Jet’s move was unethical, the retrenched employees did no good either. “They shouldn’t have gone to those political hoodlums and cried,” he said.

Deepak Rathi, a Jet steward, defended the action. “We didn’t have our jobs. We were given a two-hour notice. We went to meet our managers. But politicians were ready to support us,” he said.

Rathi’s statement is perhaps, many would say, a sad reflection on the state of governance -- a retrenched employee has to go to someone like Raj Thackeray just because Government has washed its hands off. Manish Tiwari of Congress said there was a difference between politicians and Raj Thackeray. “Raj Thackeray is not a politician by any stretch of imagination and so it is quite legitimate for aggrieved to go to political parties,” he said.

Tiwari, however, agreed that there was fear of being laid off in most sectors and that Government has a responsibility towards those “heartlessly retrenched”.

But why penalise the employees instead of practicing austerity? Manish Kakkar of Mercury Travels said it was all about balance and companies lay off employees to avoid total bankruptcy. “In the UK, there’s bankruptcy every five minutes. Here, they are preventing that from happening. If you have to save 20,000 jobs, you need to try and tell them,” he argued.

There’s also the Devil’s Advocate argument here. The trade unions seem to support all protesting parties – even small retrenchments – and therefore, the industry cannot grow. CPM MP and President of CITU Tapan Sen countered this argument. “I don’t think retrenchment can help industry grow. It arises out of a situation,” he said, adding, “There are countries with very liberal right-to-fire policies but economic disparity and joblessness are growing there as well.”

Seth agreed with Tapan that while retrenchment shouldn’t be used as a weapon the Civil Aviation sector shouldn’t be pushed to doldrums. “The Civil Aviation business will lose $ 2 bn on March 31, 2009. You have punitive taxes of 25-35 pc on aviation turbine fuel, it’s not a party there. It’s time for FM to wake up and smell the coffee,” he said, and ended the argument with, “Operation successful, patient dead”.

The broad point Seth made was if ever corporate sector ever took recourse to politics, it would be hijacking the agenda.

Should then there be a protocol for retrenchment? Could ideas like psychological and career counseling organized by the Human Resource department of the company help? Nandita Gujjar of Infosys’ HR agreed the Jet reaction was extremely reactive. “Firing of 1,000 people won’t make much difference. A planned methodology is needed to retrench them. You need to have given them reasons for it and have HR practices where compensation is defined, giving you an option to not fire them,” she said.

CNN-IBN correspondents were spread across various cities getting reactions from young professionals even as the show progressed. Yogita Limaye from Mumbai spoke with some, including a retrenched Jet employee. Veer from Jet said, “We’ll take precautionary measures, speak with admin people and analyse the situation. The solution has to be acceptable to all,” he said.

Some students from IIT-Bombay also participated in the discussion and said there was fear on the campus as far as finance sector went. “People are skeptical and want to see what happens at placements,” said a student.

Question 2: Should retrenchment be the last resort?

While the likes of Tapan Sen are protesting for the rights of Jet employees, only five per cent of India’s 450 mn workforce is employed with the private sector. But what about the small and medium scale setups, unorganised sectors and suchlike where employees get no voice at all? Sen said no individual was protecting or getting protected, it was just survival instrict and there was nothing wrong with it. “Who should survive? One CEO or thousands of workers? Balancing the responsibility of the Government,” he said.

When asked if they would protest for other sectors, Deepak Rathi said it wouldn’t be possible for them to “stretch ourselves to that”. Seth defended Rathi and said he was not a trade union person and therefore it was okay for him to think only of himself.

Speaking of the media, Seth said, “Let’s admit: yellow jackets (Jet uniform) look better on national TV than people with holes in their shirts. Common man’s misery wouldn’t have got media attention. Media goes for the low-hanging fruit,” he said.

Seth said Goyal had set bad example and there should be three worries for him now:

A) Who will trust Jet as an employer?

B) What kind of a corporate message is it to lay the blame on the management?

C) What about HR and responsibility?

But some also argue that employees are also to blame as they expect too much. They should have a realistic assessment of their own skills so if the company can’t keep the, they should accept that voluntarily. “To be fair to such employees, employers are to be blamed for it. They are in a rush to hire and so they give them fancy dreams,” she said.

But Ashwini Kakkar disagreed and said while those jobs may have been protected now, will they last the next eight or nine months? “As this recession gets deeper, what will happen to our BPO industry. NRIs may soon start knocking, asking for jobs back in their own country,” he said.

CNN-IBN correspondent Abhirr VP got some IIM-Bangalore students to react. “Only cause for concern is the finance sector,” said one, adding, “We are likely to see a redistribution of jobs in sectors rather than jobs going down. Private equity looks really interesting,” he said.

Another student agreed companies should be allowed to downsize during downturns. Yet another agreed other avenues of skills must be explored.

Question 3: Should Indians accept job cuts?

CITU argues that Indian workforce the most unprotected workforce. “Even in US, the CEO to employee ratio was 1:320. It’s 1:820 now. Legalising hire and fire would be a social crime,” Sen said.

Kakkar said the Tatas have been most benevolent employees, look at what happened to them in Singur. Seth too said it depended on the kind of company one worked with.

Sen also defended the Indian labour Law and said it provided the minimum standard. “The more you go below the benchmark, the more efficient you will turn. There has to be an end to it,” he said.

But this fast-growing arena of social conflict is taking serious toll. A CEO was recently lynched by a mob after he attempted cutdowns. What could perhaps be a solution to it? Manish Tiwari said Indian industry should stop accusing politics when all it does during the time of trouble is to come back to politicians, crying for a bailout.

Question 4: Does economic crisis necessitate a new mindset?

Young people should now probably realise it’s not a market of plenty any more. There are not that many jobs and get a reality check done. Nandita agreed and said, “It’s a good time for a reality check for both employees and employers.”

Kakkar said it was important to create 50-60 mn jobs over 10 years and at the same time global Indian companies shouldn’t shift their HQs outside the country like Dubai, where life becomes easier for the firms in terms of policies. “Politics, media and industry should come together,” he said.

Seth suggested three things needed to be done:

a) Smell the coffee and realise there are troubled times ahead.

b) Don’t take anything for granted

c) Ensure corporate Indian embraces a culture of passion.

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