Union Labour Ministry Summons Amazon Over Layoffs! - Karma Global
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Union Labour Ministry Summons Amazon Over Layoffs!


Karma Management Global Consulting Solutions Pvt. Ltd. is one of the top 5 consultancy firms, established in the year 2004, with headquarters in the business district of Santacruz East, Mumbai, India, and full-scale operation in all the States, having about 200 direct and indirect staff on its roll, is a leading service provider for payroll and payroll compliances, outsourcing, facility services, HR services, Training & Development, Recruitment & Talent Acquisition, Legal and Para legal services, Disputes and Litigation Handling,  Inspection Management and Liaising, Advisory Services, Social, Environment and Vendor Audits, Regulatory Compliances ad Governance.

Compliance with labour and employment laws has become one of the most important issues that many establishments in India have to deal with. Many employment disputes result in litigation and take a prolonged time for effective conclusions.  Karma Global is an Indian HR, Payroll, and Compliance Firm advising clients worldwide on local, regional and global regulatory compliances in relation to their business goals, business strategies, and resolving disputes.

It gives valuable suggestions and advice to Corporates, Investors, Institutions, Contractors, Establishments, Industries, etc. on the need for lowering employment risk across all levels and adhering to the laws of the land. It has a lot of expertise on employment-related compliance issues, as well as day-to-day support for Human Resource Services with in-house Counsel.

Karma Global is also into employment agreements and policies, structuring of compensation and benefits, employment aspects of merger and takeover, etc.

Karma Global’s force, strength, and reach have brought in tremendous change over from its earlier image of being a consultancy firm in the period of 2000 to now embarking on setting strategies and practices abroad in highly regulated markets and competing in the global arena.

With India over taking the UK to emerge as the fifth largest economy in the world and setting to become the third largest by 2029, Karma Global is all poised for long-term value in terms of client outreach and giving state-of-the-art technology and excellent services to global clients better than ever before.


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.

Karma Global is a fully homegrown successful Outsourcing and Labour Laws Organization, operating both with contract employees as well as with permanent types of employees who are placed in the locations of global and domestic clients.

Karma Global has traditionally been a dynamic Regulatory Compliance driven organization with an integrated and up to mark the approach to HR Services.

Karma Global has always set its sights on keeping a tab and interpreting the regulatory changes in the manner required by authorities with a focus on the implementation of these new rules coupled with the adeptness to sophisticated technology, which has placed them in the top 5 consulting organizations today as far as HR Service Organization is concerned.

Karma Global‘s experts sitting in various offices and catering to over 500 clients are fully intertwined with the workflow and processes that are leading most of its clients to convert their value drivers into the transformation of their businesses and objectives for effective results.

Karma Global‘s technology securely integrates regulatory compliance across all types of businesses from trading to operations to investor services to financials and banks while also providing the clients access to these technologies with the power to control process operations with a dashboard and ready updates on the workflows done monthly and timely as per stipulated dates set by the authorities.

The greatest satisfaction comes from the outflow of communication to clients for future reviews and analysis of the monthly work done with data visualization tools that surface their activities done by the professional teams of Karma in its Corporate Headquarters in Mumbai and Branch Offices in Bangalore, Tamil Nadu, Gurgaon, Gujarat, Pune, etc.


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

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