Angst of a union leader

THEME/THE OTHER VIEW

The author is a union leader who has taken VRS

Perhaps United States humourist Garrison Keillor had summed it up best: " When the country goes temporarily to the dogs, cats must learn to be circumspect, walk on fences, sleep in trees and have faith that all this woofing is not the last word. Hang on, another chapter follows." For India's working class, the times have really changed for the worse as economic and political changes sweep the world.

Thanks largely to a highly amenable labour machinery, a committed judiciary, especially in the lower courts, employer-friendly politicians, and, most importantly, a government influenced by WTO, IMF and World Bank thinking, workers of hundreds of companies have discovered that managements can keep them without work and divert their work to outside contractors.

A decade back, this was just unthinkable. The right to work has altogether acquired a new meaning. Things have changed so much for them that even with the VRS money they do not know where to invest. They are finding it extremely difficult to get opportunities for reasonable returns from investments, what with frequent reductions in interest rates, withdrawal of tax concessions and fly-by-night operators in the financial markets.

Thanks to changes in government policies, even the few multinationals in whose equity they would have invested for better returns have also gone private by delisting from the stock exchanges.

India is not Malaysia where the government can insist that national investors get 26 per cent of shares in any company which sets up base in the country and uses its market to run a profitable business. In fact, the workers have become so circumspect that they do not even invest in gold, though it is said that gold is the best hedge during times of economic instability in a developing country.

Today the question is: Is the government circumspect? Does it have a vision larger than the problem it is tackling? Human suffering and the human cost of rampant unemployment apart, the fact is hundreds of MNCs rushed into the country in view of the huge purchasing power of a big middle class. India has a middle class of 300 million, which equals the population of the whole of Europe. It has almost double the population of Latin America.

Unfortunately, the Indian government in its anxiety to please the WTO, IMF, World Bank and what not, unfortunately struck at the very root of this purchasing power of the middle class. Millions lost their jobs in a country where unemployment and underemployment were already widespread.

There was huge propaganda against Indian labour laws - as if India was the only country where getting rid of workers was a big problem. The fact is, even now, it is difficult to fire workers in European countries. At a recently-held European Union meet at Barcelona, Spain, one of the main topics of discussion was 'The laws of Italy'. It is widely said that in Italy it is easier to get a divorce than to fire a workman.

HIRE & FIRE WON'T WORK

In India, thoughtless downsizing and the government's encouragement to this throughout the country, has diminished demand in the market. That huge purchasing power has simply evaporated.

Even in the United States, where hire and fire rules are the order of the day, the fact is things have started changing. The international management guru, Peter Drucker, in his book Managing for the Future, has admitted that no society will tolerate this kind of hire and fire for a long time. His insights are quite thought provoking.

According to him, in the United States a correction is beginning to be worked out, which, increasingly gives employees a property right in their jobs. The redefinition of the job as property right is largely a reaction to today's great wave of entrepreneurialism. According to him, we will also have to reconsider the relationship between employer and managerial or professional employees.

Increasingly, in the United States dismissed managers and professionals sue, and many more threaten to do so. According to Drucker, in every case of this nature he knows of, the plaintiff has either won or received a generous out-of-court settlement. A few more years, it will be accepted legal doctrine that an individual manager or professional cannot be dismissed unless there is (a) proven malperformance on his or her part against clear, preset performance standards; (b) a clear removal procedure including, except in the grossest violations, a number of formal warnings; (c) right to appeal against the decision and its review by an impartial authority; and (d) proper compensation.

(This article was published in the April 2002 issue of Indian Management)