Accenture's layoffs in India illegal, says IT employees' union

The Karnataka State IT/ITeS Employees Union (KITU) highlights that employees are protected under the Industrial Dispute Act that mandates a company with more than 100 employees to take the government’s approval before laying off its workforce.

Bengaluru: The Karnataka State IT/ITeS Employees Union (KITU) has strongly condemned IT firm Accenture’s layoff plans in India, calling the action illegal as per the law of the land.

Earlier this week, media reports said that Accenture is likely to fire as many as 25,000 employees, or 5% of its total workforce, across the globe. With India having the company’s largest employee base of over 2,00,000 employees, it is expected that at least 10,000 people stand the risk of losing their jobs after the current round of appraisal.

KITU has stated that according to the current labour laws, companies that employ more than 100 employees need to obtain approval from the government in order to execute layoffs. In Karnataka, this threshold was increased to 300 employees after the recent amendment in the Industrial Dispute Act. This implies that Accenture would need the state government’s nod before firing its staff members.

KITU also cautioned that companies may bypass this rule by asking employees to resign themselves or retire voluntarily.

“Rebranding a layoff by arguing that employees voluntarily resign when they were, in fact, forced to resign, is also against the law. KITU urges the employees to refuse to resign if asked to do so by the company,” said Ullas C, General Secretary, Karnataka State IT/ITeS Employees Union (KITU).

The union urged the Accenture management to respect the law of the land, while also demanding urgent intervention of the government into the matter.

News reports of Accenture’s layoff plans first emerged when the Australian Financial Review (AFR) reported the statements made by the company’s chief executive Julie Sweet in a meeting held in mid-August.

“In a normal year, we transition out about 5% and we hire to replace them, because we are in a demand scenario,” Sweet was quoted as saying in the report.

“Right now, we’re not in a demand scenario, so if we manage out the same percentage of people and don’t replace them, it allows us to continue to invest and preserve some people who have lower chargeability for when the market comes back,” she reportedly added.

Responding to the allegations, Accenture issued a statement clarifying that the company was not planning extraordinary global workforce actions at this point in time.

“Every year, as part of our performance process, we have conversations with our people about how they are performing, areas for improvement, their potential to progress, and whether they are a long term fit for Accenture,” the company said in a statement.

“This year, across all parts of our business and all career levels, we will identify approximately 5% of our people as our lowest performers, and these individuals will transition out of Accenture. This is consistent with our actions each year,” it added.