‘Forced to resign or lose pay’: IT workers, unions allege illegal layoffs in Bengaluru’s tech firms

Trade unions and labour lawyers say many tech companies with offices in Bengaluru are downsizing without following due process, and in some cases, forcing employees to resign. Yet, only a minuscule number of affected workers fight back.

They attribute this to a lack of awareness of labour rights, fear of jeopardising future employment, and the need to quickly find a new source of income rather than get entangled in long legal battles. The absence of a strong union culture is another reason for weak employee resistance.

The Industrial Disputes (ID) Act, 1947, lays down certain procedures for layoffs (temporary cessation) and retrenchment (permanent dismissal). According to advocate Mahima Meenaxi, these include giving appropriate notice and compensation as prescribed under the Act. If an employee has worked for more than a year, they are entitled to compensation as specified under the Act, worth 50% of their basic wages plus dearness allowance, she says.

“In some cases, before retrenchment or layoff, companies are mandated to get prior permission from the government,” she adds. The Act also has a ‘last in, first out’ rule — where the newest hires are let go first — but Mahima says companies often pick employees “randomly” or even “target” women of fertile age.

According to Avani Chokshi, advocate and convening body member of the IT and ITeS Democratic Employees Association (IIDEA), companies often argue that IT staff don’t qualify as ‘workmen’ as specified in the ID Act. The Act defines a workman as anyone engaged in skilled, unskilled, technical, manual, clerical, or operational work; a category that includes many IT professionals. However, those in managerial, administrative, or supervisory roles earning over Rs 10,000 a month are excluded. “In many cases, someone titled ‘manager’ is actually doing technical work,” Avani says. This blurring of roles is what management exploits whenever a dispute arises.

Forced resignations

Lawyers and unions express concern over rampant forced resignations. Since mid-September, Mahima has been approached by around 15 IT workers who were asked to resign. If they refuse, such workers are generally either threatened with termination, denied experience letters, or told it will affect their employment record. Sometimes, their salaries are suspended and their access to internal employee portals are blocked, these experts say.

Rubin Mathias, convening body member of IIDEA, says the group has been approached by 20 employees of one MNC from across the country, including from Bengaluru. They plan to pursue conciliation or legal action after being asked to resign. Suhas Adiga, general secretary of the Karnataka State IT/ITeS Employees Union, adds that they now receive daily complaints about layoffs and forced resignations. “Usually, companies prefer to force workers to resign rather than terminate them, because termination can be illegal and challenged in court,” he explains. In cases of forced resignation, building a strong legal case becomes more difficult.

Severance packages offered in such cases are often “arbitrary”, Avani says. “Those who appear scared and comply quietly get less; those who resist tend to get more," she says.

Mahima advises employees not to give in to pressure. She recommends buying time and gathering evidence like employment records, offer letters, payslips, appraisals, attendance or leave encashment, and any emails or calls showing threats to resign. "These documents can be crucial if you seek legal remedy,” Mahima says.

Ex-employees speak

A business operations and product manager with a little over 13 years of experience was given two hours to resign, with a severance package of about 8 months. “I was terrified of losing both my job and severance, so I signed. It’s been 13 months, and I am still unemployed,” says the 37-year-old. She says that at least five others in her company were let go in a similar manner. However, she is aware of a friend at another company who was given a month’s notice before being retrenched. She admits she is not fully aware of IT workers’ rights but shares: “There’s a common belief among IT staff that if severance is offered, it must be legal. But lately, I have heard of cases with no severance at all.” Another mid-level professional was informed that her services were being terminated immediately while she was working from home in April. She was informed about her severance, notice period as per the contract, and that her relieving letter would be sent. She, too, remains jobless.

TCS notice

In late July, the labour department issued a notice to TCS, which has multiple offices in Bengaluru, seeking an explanation for its plan to layoff nearly 12,000 employees. G Manjunath, Additional Labour Commissioner, says, “Two rounds of talks have taken place. TCS clarified that layoffs haven’t occurred in Bengaluru yet and that they will inform the department if they plan to.”

Need help?

Contact unions like KITU (kituhq.org) and IIDEA (iideaofficial.org).