Union Labour Ministry Summons Amazon Over Layoffs!
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Union Labour Ministry Summons Amazon Over Layoffs!
Mass layoff turbulence in US Seattle impacts India!
According to a New York Times report last November, Amazon Inc. had announced it was planning to lay off around 10,000 employees in corporate and technology roles in what will be the company’s biggest such reduction to date.
Amazon notified the regional authorities in California that it would lay off about 260 workers at various facilities employing data scientists, software engineers, and corporate workers. The job cuts would be effective from January 17.
However, Amazon did not specify how many more layoffs are in the offing beyond the ones confirmed through California’s Worker Adjustment and Retraining Notification Act (WARN), which requires firms with 75 or more full-time or part-time workers to provide 60 days’ notice.
The Seattle-headquartered Amazon is predicting a slowdown in sales growth for the typically lucrative holiday season, much like Big Tech firms Meta, Twitter, Snap, and Uber, among others.
Repercussions in India!
In India, Amazon’s layoffs could potentially affect at least a few hundred employees across divisions, as part of its global plan to deal with slowing sales, as was reported in the Indian newspapers subsequently.
The company operates various businesses in India, including eCommerce, data centers under Amazon Web Services, and Prime Video.
While the exact number of layoffs has not yet been finalized, sources told that the cuts could go ‘deeper’ than a few hundred, given the size of Amazon’s India workforce, which is estimated to be 100,000.
“The retrenchment is happening here (India) and discussions are underway on the numbers,” said the report. “There is a sense it might be relatively higher as compared to peers like Meta-owned Facebook and others, where India was not affected in a big way.”
How did the layoff rumblings start in India?
As reported by a news channel, Amazon employees were sent a mail on November 16 to opt for the Voluntary Separation Policy. The document further stated that application forms to participate in the VSP must be submitted by the employees via smart forms between November 16, 2022 and not later than 6.30 am India Standard Time on November 30, 2022.
NITES files petition to Union Labour Ministry
The Labour Department acts on a complaint filed by the Nascent Information Technology Employees Senate (NITES) and based on this, Labour Department through a notice asks Amazon’s Management to be present on 17th January for discussions.
NITES is an NGO working for the welfare of IT/ITES and its related sector employees.
The Notice reads as follows:
The notice issued by the Assistant Labour Commissioner in Pune reads: “….it is hereby informed that a joint meeting has to be held in front of the undersigned in his hall on 17/01/2023 at 03:00 PM regarding the lay-off of workers in your establishment/factory.”
Representatives of the management and trade union should be present with the necessary documents and records as well as the power of attorney, the notice said.
Subsequent counters from NITES
The Company’s representative provided this reply when they appeared before the Deputy Chief Labour Commissioner of the Union Labour Ministry in Bengaluru. In a statement, NITES President said that Amazon had clearly violated the existing provisions of the Indian Labour Laws which aim at protecting the worker’s right. The Voluntary Separation Policy implemented was never submitted to the Labour Ministry for review which is a violation of the existing Labour Laws.
In a statement, the NITES President said the livelihood of thousands of employees and their families was made illegal. Further, Amazon employees were “unethically forced to opt for Voluntary Separation Policy and were laid-off illegally”.
What Amazon had to say ………!
Amazon also appeared in front of the deputy chief labour commissioner in Bengaluru over the same issue and reportedly told the official it was voluntary to opt for the program and no one was sacked.
Last week, Amazon Chief Executive Officer Andy Jassy said some employees had been offered the VSP and added that overall, 18000 roles would be eliminated across the company. Impacted employees will be informed from January 18 onwards.
What did the VSP offer ……….!
“As a first step, we are giving employees an opportunity to volunteer for the severance program,” it said. Employees from entry to senior level (L1 to L7) were eligible for it.
Those who took it up were offered a lump sum severance equivalent to 22 weeks’ base pay, a one-week base salary for every six months of services up to a maximum of 20 weeks, medical insurance for six months, and a notice period or pay in lieu of it.
What the Law says …………!
As per the procedure laid down in the Industrial Dispute Act, the employer cannot, without prior permission from the appropriate government, lay off an employee featured on the muster rolls of the establishment, NITES said.
A worker who has served continuously for at least a year cannot be retrenched unless served a notice three months in advance and prior permission from the appropriate government.
The application has to be submitted by the employer along with the reason for why the employee is being retrenched, which is then scrutinized.
Finally, what the employees felt ……………!
I have no idea if should I opt for VSP. Will I be selected under the policy? What will happen if I don’t opt? will I be asked to leave when the layoffs happen or will I get to serve my notice period? There is no clarity, HR doesn’t respond and we are being forced to opt for VSP amidst other fears said an employee who has been working in the Hyderabad Office as an entry-level Manager in the AWS Division of Amazon.
The final say of Amazon in the matter …………!
E-commerce Giant Amazon which allegedly laid off thousands of employees across global locations, including India, said that it did not sack any employees and that all these resignations were a part of the Voluntary Separation Program (VSP).
Amazon had stated that if employees did not participate in the voluntary separation program (VSP), they may be subject to workforce optimization, which could result in layoffs.
The company also noted that it reserves the right to approve or deny employee participation in the program, giving it the ability to retain some workers while letting others go.
What we understand about voluntary termination ……!
Voluntary termination refers to a variety of actions, but most commonly to an employee’s decision to leave a job on its own accord. It differs from a layoff or a firing, in which the decision to end employment is made by the employer or another party, rather than the employee.
CONCLUSION – let us look at legislation governing the termination of employees!
Termination by law
Any termination needs to comply with federal and state law because these laws supersede contract provisions. However, state law becomes particularly important when no defined procedure for termination exists. In such scenarios, state law becomes the rule of thumb for terminating an employee. State law itself is dependent on the area of operations of the employer.
Labour legislation governing termination of employees in Indian states
State labour law in Delhi Union Territory
Under The Delhi Shops and Establishments Act of 1954, an employer cannot terminate an employee who has been with the corporation for more than three months without giving the employee at least 30 days of notice or a salary in lieu of such notice. The employer need not give notice if misconduct is the cause for termination. However, the employee, in such circumstances, should have an opportunity to reasonably explain the charge against them prior to termination.
State labour law in Maharashtra
Under the Maharashtra Shops & Establishments Act, an employer cannot terminate an employee who has been with the company for more than a year without giving the employee at least 30 days of notice in writing. If an employee has been with the company for more than three months but less than a year, the employer needs to give at least 14 days of notice. The notice is not necessary if the employee is being terminated for misconduct.
State labour law in Karnataka and Tamil Nadu
Under The Karnataka Shops and Establishments Act, 1961 and the Tamil Nadu Shops and Establishments Act, 1947, an employer cannot terminate an employee that has been with the enterprise for more than six months, except for a ‘reasonable cause’. In addition, an employer must provide a one-month notice. If misconduct is the cause for termination, no notice or associated payoff is required.
State Labour Law in Andhra Pradesh
According to the Andhra Pradesh Shops And Establishments Act, 1988, The notice period of an employee who has given the service of at least 6 months, there would be no notice period. The employee has the right to tell and explain the Separation in the notice of Resignation letter.
State Labour Law in West Bengal
The employer shall give a notice period to the employee of 30 days according to the law. Even if there is no employee eligible for gratuity payment, the Act is still applicable to the establishment. This can take place within 30 days of termination.
State Labour Law in Rajasthan
According to the Rajasthan Shops & Commercial Establishments Act, 1958 no employee who has been in continuous employment for a period of fewer than 6 months can leave the organization without giving him a month’s notice period.
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Proprietary blog of Karma Global Tech Management LLC
This blog has been collated and compiled from various sources, adaptations, and illustrations by the internal staff of Karma Global with the knowledge and expertise that they possess, for its monthly newsletter Issue 08 of February 2023, and in case of specific or general information or compliance updates for that matter, kindly reach out to the Marketing Team – Kush@karmamgmt.com / yashika@karmamgmt.com