June , 2020
Crisis exposing the loopholes of a faulty system
23:58 pm

Aritra Mitra


An IT employee in Hyderabad, originally from Tripura, spoke to BE about the difficulties of not receiving her salaries amidst the Covid-19 lockdown. She said, “I have to pay my rent every month along with other regular payments like electricity bills. I am on the verge of exhausting all my savings.”

Another employee who is presently working with an online learning app and residing in Bangalore stated that though there has been no pay-cuts, the work load has increased substantially during the lockdown and one is expected to be on call for six days a week.

Present scenario

According to the estimates released on March 31 by the National Sample Survey (NSS) and the Periodic Labour Force Surveys (PLFS), over 136 million non-agricultural jobs are at immediate risk. Workers without formal employment contracts, casual labourers, employees in small companies and the self-employed are the most vulnerable.

Uber has laid off 3700 employees which amounts to 14% of its workforce. Ruffin Chaveleau, Head, Consumer Service, Uber reportedly told employees over a short three-minute Zoom call, “We are eliminating 3,500 frontline customer support roles. Your role is impacted and today will be your last working day with Uber.” Media reports state that in the second round, the company will fire another 3000 employees and close 45 of its global offices.

Zomato and Swiggy have also laid off employees citing the Covid-19 crisis. The former has announced to lay off 13% of its employees and forced a 50% reduction in pay for at least six months for its other employees. The latter has already laid off around 1100 employees.

According to a report published by Money Control on April 3, more than 1.5 lakh people are expected to lose their jobs in the IT sector. The travel, tourism and hospitality sector are probably the worst hit by the lockdown.

K.R. Shyam Sundar, labour economist and Professor, Human Resources Management, XLRI, Jamshedpur, said recently, “The services sector, which employs most white-collar employees, has been the worst impacted because of the Covid-19 crisis. The sector employs around144 million people. If you exclude government and other core private sector jobs in the services sector, the workforce totals around 100 million. About 30% of these jobs would be at risk.”

No legal obligation for the employers

The Industrial Disputes Act, 1947 defines ‘lay-off’ and ‘retrenchment’ in sections 2(kkk) and 2(oo), respectively. The Madras High Court, in an order (2015-2-LW127), held that “whether one is a workman or an employee other than a workman, is to be decided not on the basis of designation, but, on the basis of the work performed by the employee.”

‘Lay-off’ refers to the inability to provide employment by an employer to its workmen due to shortage of power, raw materials, accumulation of stocks, break-down of machinery, occurrence of natural calamity or any connected reason. The Act further provides for a lay-off compensation equal to 50% of the total basic wages and DA.

On March 29, the Ministry of Home Affairs issued a circular directing private companies not to curtail the salaries of their employees during the lockdown period. Some private organisations filed a petition challenging the constitutional legitimacy of this circular in the Supreme Court. In a recent verdict, the Supreme Court has said that no action will be taken against employers for curtailing the salaries of employees and asked the central government to clarify its position on this issue. Instead of opposing such a verdict by the Supreme Court, the central government withdrew its circular.

Reconsidering labour laws

An Indian national working in Australia spoke to BE regarding the situation there. He said, “It is very different from India, the way work is structured and how the socio-economic framework was arranged around it. Australia is one of the foremost countries in providing social security and health care benefits to its citizens and residents. Though pay cuts and lay- offs are common everywhere now but everything else is different.”

The Covid-19 crisis has raised an uncertainty over the future of youths in the country with the unemployment rate at an all-time low, mass lay-offs and no foreseeable changes expected in the near future. It has also exposed the myth of work life balance - displayed by the exploitation of employees by corporate organisations.  

Some may argue that with the huge number of Indians working for foreign companies, India should be in a position to bargain with the foreign organisations to put an end to the exploitation of the country’s youth. A corporate sector employee from Mumbai on condition of anonymity told BE, “Even in the developed countries, this exploitation stands out but they have lesser people and even fewer with suitable college degrees and more money to spare. Their labour laws are also stricter and employees have a much better bargaining power.”


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