IT Employees Raise Red Flag

The Indian IT industry grappling with the spectre of job losses due to automation and protectionism is being challenged by a new threat: unionisation of employees, report Bharani Vaitheesvaran and Nilesh Christopher

In a country that celebrates startups, S Thirumalai Shelvan cannot but rue the cruel irony of being pushed down the path of striking out on his own after a software exporter judged him to be below par before ousting him.

After multiple attempts at finding a job post layoff, he decided the bread and butter would come only if he parlayed his experience into a new business of writing and selling software to small enterprises that needed to go digital.

Every morning, he would visit the offices of potential clients in Chennai to sell his billing and accounting software, web development codes, and a ready-to-deploy inventory monitoringpackage. His company’s revenue is not what he earned as a salaried employee. But life ploughs on.

The evenings are more purposeful: gathering evidence of his good work, consulting with lawyers and activists, and multiple trips to the Madras High Court.His two-year case insisting that he was fired illegally and had legal remedy under the Industrial Disputes Act is ambling on through affidavits and counter-affidavits in law’s due course.

“It has not been a smooth ride. I have asked myself why do I need to take up a legal struggle? For some strange reason I have kept it up,“ said Shelvan.

Not just Shelvan. A small but growing number of aggrieved IT employees is turning to the courtsseeking redress of grievances including indiscriminate layoffs and long work hours. Often, they are supported by external representative groups because they and their colleagues haven’t been able to muster courage or strength to form unions within their companies.

Setting a landmark precedent for those wanting to fight it out, in January 2015, Sasirekha Thangavel Natarajan had her termination revoked by Tata Consultancy Services after she petitioned the Madras High Court. Natarajan’s successful challenge potentially set the stage for Tamil Nadu to become a hotbed for IT employees seeking to unionize. Unionists and members of the IT industry say that the sheer strength in numbers –well over 300,000 IT employees work out of Chennai alone -lend the state a critical mass for mobilization. For over three years now, technologists are taking the help of pressure groups such as the Forum For IT Employees (FITE) to demand answers for “involuntary exits“ of employees from IT firms.Many of them waging legal battles are still unemployed. Some of the retrenched have dropped their litigation halfway after finding employment in other firms.


India’s IT sector and unions or pressure groups have rarely appeared on the same page. Unionisation of the workforce is usually associated with the manufacturing industry, where labour unions have helped factory workers fight for higher wages, job security, and better working conditions.

On the contrary, IT employees for decades have enjoyed double-digit pay hikes, comfortable workconditions, established redressal mechanisms and lavish perks.Given this, one might wonder if there was a transition afoot to seek the security of a union to guard against the layoff bogeyman.

Experts believe this was bound to happen. “Workers reach out to unions when they feel insecure about their employment, when they feel under-compensated for their work, and whenthey feel working conditions need improvement. In the export IT industry only the first of these conditions is starting to occur,“ said Peter Bendor-Samuel, chief executive at consulting firm Everest Group.

During the heyday of the Indian IT outsourcing boom in the post-liberalisation era, the workforce constituted the “creamof-the-crop“ techies who did bespoke application development ­ high-skilled and customised work for clients. In the years following 2005, companies started winning large outsourcing deals resulting in explosive growth in the subsequent years.

The large deals meant a shift to managed services, which are repetitive in nature.

“This is when the IT requirement changed from a creative, thought-process oriented, cream-of-the-crop sort of employment to a factory-type employment post-2005,“ said Siddarth Pai, a technology strategy expert. “The move from differen tiated work to a repetitive factory-oriented work was the perfect setting for employees to think about the potential of unionisation. When you have an undifferentiated (factory like) workforce, this leads to unionisation much more easily.“

Since 2008, the Indian IT Industry has seen multiple attempts at unionisation.


FITE traces its origins to the Sri Lankan strife. When the civil war ended, Young Tamils Movement, of which FITE is an off-shoot, shifted attention to the need for proper rehabilitation of displaced ethnic minorities in Sri Lanka. Afterward, members of the forum asked for action on issues closer home: a police firing on Dalit protesters in a Tamil Nadu village; the apprehension of fishermen from Rameshwaram by the Sri Lankan Navy.

As they progressed from one social crisis to another, the group staged a demonstration for safer working conditions for women after the brutal murder of a female employee along Chennai’s IT corridor. In late 2014, FITE leveraged the huge presence of technology workers in its membership to catapult into public conscious the issue of retrenchments by IT companies.

Nearly two years after, another spate of involuntary exits by IT employees emerged, and FITE and another grouping, the National Democratic Labour Front-IT, acted as facilitators for the employees. In February 2015, NDLF-IT filed a public interest litigation seeking directions for the TN government to ascertain if labour protection laws applied to the IT sector. Well over a year and a notice to the government threatening a contempt petition, the state responded that the industry had all along been under the purview of the labour laws.

The Trade Union Act, 1926 guarantees the right to form unions in any industry.The provisions in the Industrial Dispute Act, 1947 provides immunity for factory workers or `workmen’. Whether or not IT employees can be classified as `workmen’ is still being contested and the law is somewhat ambiguous. IT employees are knowledge workers, who are deemed as `Executive’ class, said V Nagaraj, Professor of Law at the National Law School of India University, Bengaluru. “Only workmen have some protection under the Industrial Disputes Act, 1947. IT employees, are not workmen and come under contractual relations.“


Experts are divided on the longevity of the unions and any potential negative impact they might have on the IT sector but they agree that the attempts at unionisation can no longer be ignored. India is the world’s largest sourcing destination for the information technology (IT) industry, accounting for about 67% of the $124 billion-$130 billion export market.

“In the unlikely event that widespread unionisation did occur in a firm, it would be a significantsetback for the firm.Clients would likely react negatively and quickly movetheir work to non-unionized firms,“ Everest Group’s Bendor-Samuel said. “Unionised workforces are typically significantly less productive than their nonunionized competitors and unionisation is also viewed as a constraint toimplementing automation or other new technologies.“

IT industry veterans are positive the unions are temporary. “IT is an industry where the employees are paid well and even today the attrition is high. I don’t think unionisation as a concept would work. There will be noises whenever there is a job loss or a downturn, but it cannot sustain,“ said V Balakrishnan, former chief financial officer at Infosys.

Historically, unions have created a difficult work culture and companies tend to avoid countries theyconsider to be having adverse labour policies. At the start of the labour arbitrage movement, Eastern Caribbean Island, Barbados tried to position itself as a nearshore destination.Several IT firms set up offices there, but the unions, backed by the government, intervened and all the firms immediately left. Another example is France, where labour laws and unions resulted in French companies moving work out.


Government intervention will be the tipping point in the on-going episode of the alleged `unfair termination’ versus routine `performance-based appraisal’ claims by the employees and the employers, respectively. Indian government legislation has been friendly towards the IT sector, which proved to be the backbone for employment in India for over two decades now.

This is where unions are trying to get a foothold. They are trying to augur support from employees and approaching labour commissions seeking government intervention. The insecurity starting to creep into the industry due to job loss is nascent.Though work conditions and wages are good, the future of the IT industry and the role of employees in it are changing.

“What we will be striking at in the future is carving out internal unions in these companies,“ said S Kumar, a member of NDLF-IT. The purpose is to have a toehold in managerial policy-making that relates to employee rights and protection, inwhich external unions do not have a say. NDLF-IT also plans to lobby with the Union and state governments to have a proactive role in policy-making.

Indian IT employees have come to expect long-term employment from their employers. “The prospect that relatively fewer jobs will be required after the digital automation coupledwith the slowing growth of the sectors… is an abrupt change in climate for employees of these firms and is causing increasing concern to some tech employees,“ Bendor-Samuel said.

Worker unions had not made much of an impression on IT-employees all these years, but now, with the current string of events, these seem to take significance.

“If this problem really ends up going down the unionisation path companies should look at a two-pronged enterprise,“ said technology strategist Pai. “A lot of companies in the manufacturing sector today have a portion of the workforce that is unionised and a portion that is not.This might be the first instance of a dual workforce in IT. There could be people who are a part of the union who do repetitive work, and the others who are not part of the union since they do non-monotonous, differentiated work.“

The IT industry is going through a unique phase of huge uncertainty, said a veteran IT executive. “Given this, it’s crucial that progressive companies offer clear roadmaps to theiremployees. For instance, if a lot of infrastructure services are moving to the cloud, can an employee working in this be offered training in security? That’s because security will be a key component as things move to the cloud.“


“For close to two decades, unions have been trying to make inroads into India.Eighteen years ago, a UK-based union tried to come in. They spent over £1 million to mobilise employees; they failed,“ said Raman Roy, Chairman of industry body Nasscom. “There is no need for collective bargaining in our industry. We are the best paymasters in the country.“ Employees, too, are not comfortable coming out openly in support of unions. There are whispered stories of a blacklist of socalled troublemakers, which would pull down their chances of landing another job.“It’s a vague rumour which no one can confirm or deny. But everyone is wary of the possibility,“ an IT employee said.

Even if more IT unions were to emerge, these will likely be extraneous bodies.

“IT employees themselves haven’t made any effort to form an internal union,“ said the National Law School professor Nagaraj. “In the wake of the recent events, outsiders are trying to unionise, which brings in political affiliation into IT campuses.There might be vested interests in the way these external unions act. This is neither good for the employer nor the employees.“


Source: Economic Times

Date: 26th May 2017

HDFC Life, Max Life to Chalk Out New Ways to Merge


Mumbai: HDFC Life and Max Life have gone back to the drawing board to make their merger plans work, which includes proposals to merge the two insurance companies directly instead of the proposed convoluted way , or list HDFC life on stock exchanges and then merge the two insurers, said three people famil iar with the matter.

“We are reworking the struc ture but any structure has to satisfy Section 35 of the Insurance Act from both the merger and tax implications point of view,“ said Amitabh Chaudhary C E O, H D F C L i f e Insurance. “Any new structure will take 15-18 months to get approvals.“

Meanwhile, HDFC said in regulatory filing that: “With ref erence to scheme of amalgamation involving HDFC Life, Max Financial Services, Max Life Insurance and Max India, the Corporation (HDFC) has become aware of recent media reports of certain developments of the proposed merger, but has not received any independent confirmation in this regard from any regulator government authority .“

Irda raised reservations on the structure, which involved merging Max Fin Services with Max Life, fol lowed by a demerger of life insurance business to be merged with HDFC Life.

“If AG has returned the file, they (HDFC and Max Financial Services) will have to submit plan B,“ said a senior Irda official.Chaudhary said if it takes too long, HDFC Life would go for an IPO first and merge the two companies later. “We can’t wait forever,“ said Chaudhry . The fresh deal will need approvals from several sharehold ers including Standard Life, ax Group, Mitsui Sumitomo and Axis Bank. In HDFC Life, HDFC owns 62% while Standard Life 35%. Max Financial a n d Mitsui Sumitomo current ly hold 68% and 26%, respectively, of Max Life.

In 2016, before the proposed merger, HDFC Life has called investment bankers for an IPO. This merger would have given automatic listing to HDFC Life. “We had done a lot of pre paratory work on IPO last year,“ said Keki Mistry , vice-chairman, HDFC.With the insurance regulator objecting to Max LifeHDFC Life merger proposal as planned after the AG declined to opine on the matter, conflicting signals are emerging on whether the consolidation would happen first or IPO of HDFC Life. HDFC’s Keki Mistry says the company would try to rework the proposal and submit it to the regulator while remaining open to revive its IPO plan, but Max Group founder Analjit Singh said HDFC and Max are committed to finding a way for the merger to happen.

Source : The Economic Times

Date : 25-05-2017

Do you need a health insurance cover of Rs 1 crore?

Health insurance is now widely considered a basic need, and smart consumers are increasingly exploring the possibility of getting better facilities out of their policy. Usually, consumers opt for basic health covers in the range of Rs 3 to 5 lakh. But these covers are limited in many ways such as the room rent limit. There may also be sub-limits on certain forms of treatments and illnesses.

As a consumer, you do not want to find yourself at the limits of your health insurance while you’re receiving treatment. You should opt for the highest possible cover your budget allows. The question we’re going to ask in this article is this: how much is too much?

There are now health insurance plans that cater to HNIs, providing them eight-figure sum insured. These covers may range from Rs 25 lakh to Rs 1.5 crore. Do you too need these covers?

Who Needs Big Covers?

High net worth individuals (HNIs) look for a comprehensive health cover, with five-star facilities and hassle-free treatment without limits. They are not deterred by premium costs. They also want to keep in mind healthcare inflation, which makes hospitalisation increasingly expensive.

Individuals who have a history of critical illnesses in the family—illnesses that require expensive and prolonged hospitalisations—may also opt for a big cover. In instances of diseases such as advanced cancer, private hospitalisation may easily cost tens of lakhs of rupees, and only a large-sized cover can protect the patient.

Lastly, if the patient wants to go abroad for advanced treatment, a low or mid-value health policy would certainly be inadequate. In all such situations, the best way forward is to have a high-value health insurance plan.

Organ transplants, overseas coverage, treatment for the terminally ill, any ailment that requires ventilator support, and all major diseases could be covered only in a high value insurance cover.

Exclusions & Inclusions

Exclusions may vary depending on the type of policy, the amount of cover, and on the insurance company’s terms and condition. Most high-value health insurance policies provide high levels of maternity benefits, wider range of day care treatment, organ transplants including donation cost, OPD costs, alternative treatments, overseas treatment, and overseas flight charges.

Exclusions typically are treatment in unrecognized hospitals, genetic disorders, HIV/AIDS, hospitalisation caused by adventure or hazardous sports, etc. It’s best to go through the policy document to understand the full list of exclusions.

There may also be waiting periods for certain ailments going up to two to four years since the policy commencement.

What Should You Do?

Getting a high-value insurance cover isn’t a possibility for the common man. The annual premium for such a policy of Rs 1 crore may cost around Rs 45,000 for an individual of 21 to 25 years of age, or Rs 2.37 lakh for individuals of 65 to 70 years of age. Such policies are available through private as well as public insurance companies.

When you pay such a high cost, you should have a policy with the least number of exclusions, which covers the maximum number of illnesses, and that has low waiting periods. The health cover should not have sub-limits, especially if it is a high value health cover. You should also avoid a policy that asks for co-payment for senior citizens.

But if you’re seeking a high-value cover without having to pay such heavy costs, here are your options.

If you are at the starting of your career at around the age of 25, you can take a standard health policy of Rs 5 to 10 lakh, since the chances of you being hospitalised are very low. As you grow older, you can increase the coverage amount gradually, keeping in mind your deteriorating health and increase in chances of bigger ailments.

Increasing the cover periodically would also help mitigate inflationary impact properly. Considering your personal health, you can increase your health cover at fixed intervals such as every five years. You can reduce your premium costs by buying top-up insurance plans.


Source: The Financial Express

Date : 25-05-2017

Talent Analytics Landscape Research 2017

Talent Analytics brings predictability that HR leaders can leverage for the most complex decision making. But have companies really begun to, or are planning to invest in it? People Matters conducted a study Talent Analytics Landscape 2017 Research to gauge the state of Talent Analytics in Indian corporates and invited opinions by the industry stalwarts


Organizations today, have complex and customized human resource requirements. While these requirements vary across industries, location and size, certain common patterns related to HR tasks emerge within organizations. Leveraging such patterns across the HR functions and employee lifecycle can not only help in identifying success mantras and what works but also helps in building predictability and prescriptiveness going forward. Hence, building insights based on these patterns and translating them into actions has the power to transform a traditional instinct based HR function to a smart data-driven arm of the organizations. As the business continuously become smarter, leaner and faster, leveraging this power of talent analytics must be extremely relevant and useful for organizations, one would imagine. But the statistics tell a different story. People Matters conducted a survey on the usage trends of Talent Analytics, across a wide spectrum of organizations.  We asked critical…


Source : Peoples Matter


Date: 24th May 2017

NSE asks brokers to have in place insurance cover for FY18

Top stock exchange NSE has asked its brokers to ensure that their respective insurance cover is in order for current fiscal and submit the details of their policies in electronic format by July 31. As per market regulator Sebi norms, it is mandatory for every stock broker to have an insurance cover. “Trading Members are requested to ensure that their ‘Stock Brokers Indemnity Policy’ is in order for the period 2017-18 with effect from June 1, 2017,” the National Stock Exchange (NSE) said in a notice today. “Trading Members are required to submit the details for the same through Electronic NSE Interface for Trading Members (ENIT) on or before 31st July, 2017,” it added.


Source: The Financial Express

Date : 24-05-2017

Insurance Software Firm Ebix Buys 80% in ItzCash for Rs 800 cr

Early investors Matrix, Intel Capital and Lightspeed Venture Partners exit the fintech company

US-based global insurance SaaS company Ebix has acquired 80% stake in ItzCash for ` . 800 crore, valuing the Mumbai-based fintech company at about $150 million and giving exits to early investors Matrix, Intel Capital and Lightspeed Venture Partners. Essel Group will own the remaining 20% stake in the company .

ItzCash’s managing director Naveen Surya said the investors received three to four times returns on their initial investments in the company , which was founded in 2006 and had raised about $51million so far.

Nasdaq-listed Ebix is a global supplier of on-demand software and ecommerce services to the insurance, financial, egovernance and healthcare industries and operates in 40 countries, including India.

Surya said the investment will allow the Indian company to cater to Ebix clients beyond India and open cross-selling opportunities to sell each other’s complementary services to clients. “This partnership with Ebix will help us deepen our foray into all kinds of financial servi ces such as credit, insurance, healthcare and investments to accelerate our growth momentum, even outside India,“ Surya said.

ItzCash said it turned profitable in 2016-17. While the company initially started with prepaid card and wallet products, it has since expanded into businesses such as remittances, financial services and corporate pro ducts. The company also has cloudbased solutions at about 75,000 stores across 3,000 cities and towns, where kirana stores also enable bill payments and money transfer. “In ItzCash, we found attributes that none of their peers had -market penetration across 3,000 cities, 75,000 plus bricks-and-mortar distribution outlets, CAGR of approximately 35%, and the only company which was profitable among all its peers. With one of India’s most-prominent business houses, Essel Group, deciding to align their interests with Ebix, the decision to invest in ItzCash became easy for us,“ Ebix CEO Robin Raina said in a statement.

Source : The economic Times

Date :25-05-2017

HDFC Life launches India’s first AI-based insurance Email Bot

HDFC Life, one of India’s leading private life insurance companies, announced the launch of India’s first life insurance Email Bot. The Email Bot, named SPOK can automatically read, understand, categorise, prioritise and respond to customer emails that are sent to HDFC Life, within milliseconds.

This automation initiative will enable HDFC Life to respond to user queries faster and more efficiently and consistently. It will also help generate deeper insight on customer needs by identifying patterns in customer interactions and facilitating HDFC Life to progressively anticipate and address all customerissues and needs. The deployment of SPOK will improve customer experience, while providing the support staff with the bandwidth to focus on customer satisfaction and delight.

Subrat Mohanty, Sr. EVP at HDFC Life, said, “We pride ourselves on using thelatest technology to continuously improve customer experience. SPOK will help us increase our operational efficiency and we are excited to see how these interactions with our customers provide us inputs to enrich their future experience with us.”

HDFC Life has embarked on this initiative in collaboration with Senseforth, a startup that offers a wide range of enterprise bots built on its AI platform.

“We are excited to partner with HDFC Life in this journey to transform their customer interactions using cutting edge AI technologies.” said Mr. Shridhar Marri, CEO and Co-founder, Senseforth.

“The Email Bot is built on cutting-edge Artificial Intelligence and Natural Language Processing technologies. It functions on A.Ware, our AI Platform. A.ware mimics human cognitive abilities in reading, comprehending, interpreting, and conversing,” he added.

Artificial intelligence special purpose bots learn and evolve based on guided learningprinciples and are proficient with customer emotion. This will help HDFC Life constantly enhance customer experience going forward.