An imperative makeover

The great termination wave, characterised by layoffs, is taking place in many countries, especially in digital and automation companies. According to the latest news, Hollywood unions representing animators and visual effects workers are collaborating, juggling strategies for negotiations, including the appropriate use of Artificial Intelligence (AI). AI has become imperative, and the redundancy of employees is obviously a consequence. Of course, there is also a tendency for cost-saving.

Amendments in laws and policies can curtail problems to an extent in the long run, especially with the augmentation of AI. For instance, companies could be allowed by law to reduce the number of working days as well as salaries. As per the current legal provisions in India, Section 9 A of the Industrial Disputes Act, 1947 prevents employers from unilaterally altering conditions of service for workers without providing notice as stipulated and an opportunity for negotiation/conciliation. Such age-old provisions need to be amended according to the current economic scenario. Companies could be given an exemption from provisions for a stipulated period. Corporates could be allowed to reduce salaries by a small percentage, adjust timings, and work days for a limited period, and at the same time, employees could be given the flexibility of performing alternate jobs during such a period. For employees who are not considered workmen as per the ID Act, such changes can be made merely by entering into an agreement with the employee. Provisions of the ID Act are not required to be complied with. Furthermore, during such contingencies, there could be a reduced rate of social security schemes like the Provident Fund, etc., for companies facing losses. The legislature may also consider reduced taxes with conditions.

Companies may also consider modules for work from home, which saves many infrastructural costs. Entities complain about compliances with strict leave regulations under the Shops and Establishments Act, even while employees are working from home. With changes in economic and business cycles and work methodologies, this too needs a re-look. As a middle path, a combination of paid and unpaid leaves could be formulated. The aspect of overtime too needs consideration, especially in a work-from-home scenario. As of now, Indian laws permit stipulated working hours and established extended hours with double wages as overtime. This is practically not complied with by many.

Apart from these options, internal transfers and sabbaticals could also be explored. Employees too need to understand that depleting efforts, unproductivity, non-performance, and moonlighting are also reasons owing to which businesses are forced to take such decisions. Mass terminations should be avoided as far as possible. If incumbent, VRS (voluntary retirement/resignation scheme), golden handshake, and other schemes are viable options.

Terminating 'workman' level employees covered under the umbrella of the ID Act is more difficult than separating from a spouse. The provisions of retrenchment are required to be followed, which includes giving 15-day wages for each completed year, notice or notice pay, etc. Further, "last come, first go" is to be complied with, which means the senior-most employee is retrenched last. In case the company plans to reopen, the retrenched worker has to be given an option to join back. In the case of factories, mines, and plantations that employ more than a prescribed number of workmen, i.e., one hundred (in some states three hundred), permission from the government is required, which is given in the rarest of cases. If the number is less than one hundred, no permission is required, only intimation is to be given. Terminating managerial, administrative, and non-workman level employees in private companies, as per Indian laws, is not difficult as they are governed by their contract of appointment and can be terminated as per the clauses of the same. A contract of personal service, as per the Specific Relief Act, 1963, can’t be enforced.

Furthermore, employees need to become more skilled and multitaskers, as employers want the most for every penny spent. Therefore, skill development is where the country’s focus should be. The provisions of the Apprentices Act, 1961 need to be liberalised. In the ever-changing tech landscape, upskilling and reskilling are vital for staying relevant. Corporate Social Responsibility funds could be utilised for the same.

The use of artificial intelligence will lead to job cuts. Some pragmatic midway solutions, saving costs, could not only resolve such issues in the country in the long run but also attract foreign investors to outsource their work to India.

The writer is a practising Advocate in Supreme Court and High Court of Delhi. Views expressed are personal