Challenges for Organizing the BPO Workers in India

Surendra Pratap

Introduction

The Information technology (IT)-enabled Services (ITES)-Business Process Outsourcing (BPO) industry is considered to be India’s flagship sunrise industry, playing a major role in transforming the country from a slow-growth economy with recurring balance of payments problems to a fast-growth economy generating foreign exchange surpluses. It is also argued that the boom in ITES-BPO activities is instrumental in resolving the crisis of unemployment among the growing mass of educated-unemployed in the country. Call centres in India are broadly classified under ITES– BPO category. Roughly 60–65% of ITES-BPO services fall within the call centre spaces and 35–40% are back office activities. Major established call centre hubs in India are located in Bangalore, Mumbai, and in the National Capital Region of Delhi. Now new IT-BPO hubs are emerging in Pune, Kolkata, Chennai and Hyderabad. Most of the work is routine call centre and back office processing work for the US, UK, Australian and domestic markets.

From 2003 to 2008 the employment in ITES-BPO services increased from 180,000 to about 704,000; and it is expected to reach about 1.4 million by the end of 2010. ‘The information technology and business process outsourcing (IT & BPO) sector today accounts for 6% of the country’s GDP, a quantum jump from 1.2% just a decade ago, according to a recently concluded study by industry body Nasscom, in association with research firm Evalueserve. The study estimates that by 2020, the sector will account for 10% of the country’s GDP and 14% of the total services sector revenues. …The sector contributed to 10% of the country’s service sector revenues, its unique service-led export oriented model contributed 9% of the country’s incremental GDP. The per capita GDP contribution of IT-BPO employees is 80 times that of agriculture. The industry grew twice as fast as the total Indian exports over the past decade and contributed 14% of the country’s total exports.’1 

However, if we situate this service sector growth in the broader political economy of the country, we encounter a different picture, and then this growth seems to be contributing more to aggravating the problems than to resolving it:

1.   From the period between 1983 to 2004-05, the share of agriculture in GDP drastically reduced from 37% to 21%. In the same period the share of manufacturing in GDP remained largely stagnant (14% in 1983 to 15.1% in 2004-05); while the share of services in GDP recorded a sharp increase from 38.6% to 53%. The service sector therefore has attained the dominance in the economy. However, we do not get the same trend in the growth of employment. In the same period, there is no comparable decrease in share of agriculture in the employment (68.5% in 1983 to 56.5% in 2004-05). On the other hand, the share of manufacturing has remained more or less stagnant (10.7% in 1983 to 12.2% in 2004-05). The increase in employment in the service sector is also very low in comparison to increase in its share of GDP. The employment in the service sector increased from 17.6% in 1983 to 24.8% in 2004-05. According to National Sample Survey estimates (2004), the employment in computer-related activities accounted for only 0.2% of the work force; and all business services including financial intermediation, and real estate, renting and business activities, accounted only for 1.7% of the workforce. It can be easily understood that this ‘Indian-style capitalist development’ is producing a hell of chronic poverty and hunger in vast rural areas and also creating a huge reserve army of unemployed working class. This is largely termed as job-less growth.

2.   The growth in this sector is largely based on external stimulus. As far as the ITES-BPO sector is concerned it is mainly based on external work contracts. Therefore, this growth is not leading to any kind of sustainable development. Any hint of crisis in developed economies may cause disasters for this sector. Moreover, with many third world countries (former British or American colonies) entering in this business, intense competition between them may make the growth in this sector even more unstable. In these situations the amount of work contracts for particular BPOs can never be stable. This is why the ITES-BPO sector is fiercely campaigning for amendments in labour laws to get unrestricted flexibility in hiring and firing the workers.

The ITES-BPO in not only a new sector of employment, but the nature and structure of employment in this sector is also largely new to India. Therefore the unionization in the ITES-BPO sector becomes a challenging task.

Exemptions from Labour Laws 
Although the labour laws of the land apply to the ITES-
BPO sector, various exemptions from crucial labour laws have been granted to the sector by the government. The ITES-BPO sector is exempted from application of the Apprentice Act. This exemption provides the sector with the opportunity to engage large number of workers as apprentices without any obligation to absorb them as regular workers or provide them with any social security benefits. The state governments of Karnataka, Tamilnadu, Maharastra, etc. have exempted IT establishments and IT-enabling services from the provisions of the Shops and Commercial Establishments Act related to working hours; and from prohibitions in the Act against night work for women and young people, subject to employers providing transport and security for those working at night. West Bengal’s IT Policy allows BPO/ITES employers  ‘self-certification’ of their compliance with important labour legislations like the Minimum Wages Act, Shops and Commercial Establishments Act, Workers' Compensation Act, and Employees State Insurance Act. Andhra Pradesh’s Policy on IT also grants similar exemptions. The IT Policy of Uttar Pradesh exempts ITES from routine inspections in relation to compliance with labour and pollution regulations. In 2009, the Karnataka government provided exemption to IT/ITES and software establishments from the provisions of Industrial Employment (Standing Orders) Act 1946 for two years. This Act provides for strict enforcement of provisions on classifying workers, their working hours and shifts, the wages payable, etc. Haryana Labour Policy declared the IT and ITES sector as Public Utility Services in 2006.2 Some other states have also made this declaration. Moreover, more and more IT and ITES units are now moving in the Special Economic Zones (SEZs) where all the activities are declared as Public Utility Services under the Industrial Disputes Act; for workers in Public Utility Services, a legal strike is almost impossible. About 50% of SEZs are especially for IT and ITES. As of September 2010, the Government of India has approved 734 SEZs to be established in different states of India. (367 out of 734 approved SEZs are already notified – either land has been already acquired for them or it is in process. 122 out of these 367 notified SEZ have already become operational.)

Working Conditions in BPOs 
The workers in the BPOs are generally called agents. Over 80% of
BPO workers are in the age group of 20-25 years. Women workers (mostly unmarried) roughly constitute 40-50% of the workforce. Workers are generally recruited as probationers for 6-12 months. Only a very small portion of these probationers are absorbed as regular workers. Studies have reported that as high as 38% workers in BPOs are probationers (workers on probation for up to one year before being formally hired as regular workers) or on project-based engagement (only 62% are permanent workers).3 Moreover, in the BPO sector, permanent status can not be equated with job security. The permanent workers are also thrown out of their jobs as easily as the temporary workers. The only difference between the two categories of workers is that permanent workers get social security benefits and leave entitlements, etc. Studies have found a very small portion of workers working in the BPOs for more than two years; the attrition rate in the BPO sector is as high as more than 50%.4 It reflects on the high insecurity and vulnerability of BPO workers. There are also the pull factors, but the main contributor in the high attrition rate is the push factor and not the pull factor.

In India BPO workers are comparatively better paid than other industrial sectors. The monthly salary of BPO workers ranges from Rs. (Indian rupees) 8,000 to Rs. 15,000 (equivalent to US$178-US$334).

The major problem that BPO workers face is that they are virtually compelled to work like slaves. Using Automated Call Distribution (ACD) technology5 (along with providing standard scripts to facilitate the agent’s response) the firms keep the ‘free time’ between calls to the barest minimum. Moreover, the workers and their work are continuously monitored with the help of specially designed software and closed circuit cameras. This monitoring is not only at the workplace but also outside the workplace. The workers are always under psychological pressure. The other major problem is difficulty in getting leaves. The regular workers also can not go on leave without prior permission, even when they are facing sickness. However, they are eligible for 10-11 days of leave in a year. But probationers or other temporary workers who form almost 40% of the workforce are not eligible for any leaves except casual leaves.6 Moreover BPO workers, whether regular or temporary, do not get any leave on national holidays and festivals. The issue of leaves is so crucial that sometimes it becomes a reason to resign.7 

Unnatural working hours, a heavy workload, excessive overtime, continuous monotonous work without rest, and working under continuous psychological pressure cause serious health problems ranging from nervousness, chronic fatigue, body ache, insomnia, nausea, anxiety, restlessness, irritability and depression, to digestive problems such as constipation, peptic ulcer, indigestion, diarrhea, excessive gas formation, abdominal pain, etc.8 

The individualized work culture and lack of space for social interactions either at the work centre or in society (due to odd timings), is making them asocial individuals detached from society. This is a major cause of depressions. Moreover, they also face a problem of split personality – they live in a ‘foreign’ world with foreign names and foreign culture at night, and as poor natives facing a lot of trivial problems in the daytime. 

If the work culture in manufacturing units automatically teaches the workers to work collectively and therefore automatically transfers in them a collective feeling and some sorts of organizing skills, the BPO culture automatically teaches the opposite and automatically transfers individualistic feelings. Probably this is also one of the reasons why they are more hesitant to join organizing efforts. But there is another aspect of this situation also – i.e. BPO workers feel comparatively more urge to socialize and join gatherings, etc.

Challenges for Organizing the BPO Workers 
Unionization in BPOs in developed countries (i.e. mainly US,
Australia and Britain) was comparatively easier as they could extend the union activities of the customer companies based in the same country; since the BPOs were actually an extension of activities of these companies. But in third world countries like India this has not been the case. Also, as we discussed earlier, BPOs were not only new sectors but also sectors with new employment structures and a new work culture; the trade unions in these countries had no experience of organizing workers and practicing collective bargaining in such situations.

Moreover, the whole state machinery, industrialists and their think tanks and the media are continuously campaigning that there is no need of trade union activities in BPOs as they enjoy ‘heavenly’ working conditions with the best salaries; and that unionization in this sector will end India’s comparative advantage and prove detrimental to the nation, since these sunshine industries are now driving the Indian economy. Many state governments have already declared ITES-BPOs as Public Utility Services under the Industrial Disputes Act 1947, which makes legal strikes almost impossible; and therefore also makes the unionization process highly difficult.

These are the broadly the external factors which have delayed and also acted against unionization efforts in the BPOs in India. However, the decisive role is always of internal factors and therefore we should focus more on the factors affecting the collectivity at the workplace. We can summarize these factors as follows:

1.   We have already discussed that workers in BPOs work in a foreign environment with foreign names, foreign culture and foreign language. They enjoy better transport facilities, work in clean air-conditioned offices with their own small cabins; they are called call centre executives (and not ‘operators’), and are also better paid than workers in other industrial sectors (although, if they are married, with this salary they cannot maintain a middle class life). In a colonial mindset that is still prevalent in India, the BPO workers get social status in the eyes of common people. In India there is a general feeling in the middle classes that trade unions are labouring class organizations and it is against their status to join the trade unions. This attitude automatically percolates among BPO workers and it is also nurtured by management practices in BPOs. The seriousness of the problem increases by the fact that the vast majority of the BPO workers are drawn from the Upper Caste9 strata of the society. One study has exposed that an overwhelming majority of 94.4% of BPO workers is from the General caste category (Upper Castes) and more than 80% of the workers were educated in English-medium schools.10 

2.   The working conditions and management practices in the BPOs promote individualism and act against development of collective attitude among the workers. By using ACD technology along with standard scripts for response to calls, the management actually leaves no time for interaction among workers. For every second in the shift every individual cares for completing his target only, since the salary and other benefits and also the job security depends on completing the targets. For getting a better place in a five-point rating system, all the workers are compelled to compete with each other, rather than to cooperate. Moreover, all the time they are under surveillance with closed circuit cameras.11    

3.   The sword of retrenchment is always hanging over the heads of the workers. Given the serious unemployment problem in India, this factor becomes important. The BPO workers are hired and fired so easily that every individual is always in fear of losing his/her job. The whole campaign against unionization also affects them and they do not want to do anything that has any negative impact on the BPO business—meaning that they also want India to retain its competitive advantage in this sector so that their jobs are protected. It is interesting to note that in the recent crisis, workers drew two conclusions opposite to each other: one, there must be trade unions in BPOs to stop the employers from firing the workers; and two, we should not do anything that may lead to loss of BPO business.12 

However, with growing experience in the industry and with realization that there is no end to the hardships, gradually the attitude of the workers has been changing. Studies reveal that in recent years the BPO workers have started showing more interest in and responding positively to trade union activities; they have been recognizing the need for trade unions in the BPO sector.13 

It is also worth mentioning that the high attrition rate of BPO workers is also an indication of dissatisfaction and hopelessness; and this has grown to the extent of becoming problematic to the BPO units. The problem is so acute that some BPO managements are now occasionally expressing their willingness to engage with trade unions if they can help in reducing the attrition rate.  

‘This indirectly has lent support to the unionization efforts through the media and a few industry protagonists who felt that union can be tolerated till the time it curbs the problem of attrition. These industry representatives have publicly agreed in forums on the utility of the union to counter the most significant problem of the industry viz. attrition. For example, going back to the Excell case, if we ask a basic question – why then did the Excell management take on a union? J.S.R. Prasad, national director, Union Network International (UNI), a global network of 900 service sector unions, says Excell signed the CBA to counter attrition in the company. There was no communication between the management and employees. UNITES Pro was called in to bridge the gap.’14

In this background, in recent years efforts for unionization have started in more systematic manner in India.

Strategies for Unionization of BPO Workers 

There are three worth mentioning initiatives for organizing the BPO workers.

1.   UNITES Pro (Union for Information Technology & Enabled Services Professionals): This is claimed to be a trade union for IT and enabled services professionals, formed in 2004. It is an independent union, but recently it was reported that UNITES is trying to get affiliated with INTUC (Indian National Trade Union Congress-a trade union wing of Indian National Congress- the ruling party in the national capital Delhi). UNITES Pro has chapters in Delhi, Bangalore, Mumbai, Hyderabad, Chennai, and Kochin.15 

2.   West Bengal Information Technology Services Association (WBITSA): This union is floated by CITU (Centre of Indian Trade Unions- the trade union wing of the Communist Party of India (Marxist)- the ruling party in West Bengal).

3.   Centre for BPO Professionals (CBPOP):  This initiative established two service centres in 2004, one in Hyderabad and the other in Bangalore with the support of UNI Apro, aiming to establish contact with, convince, connect with and finally consolidate such networks of professionals into trade unions. Therefore CBPOP generally works for building awareness among BPO workers and networking among them. It is said that CPBOP is now in the process of registering the trade unions at the state level.

It is interesting to note that none of the above three initiatives has emphasis on organizing the trade unions at the enterprise level, at least as the strategy in the initial stage. All the above three organizations are emerging as general forums of or for BPO workers, without any organization at the enterprise level. This is one of the changes in the strategy of unionization, which emerges from the specific situations in the BPO sector. It is also to be noted here that generally this has also emerged as the dominant strategy to organize the workers in the unorganized sector.

Moreover, the UNITES Pro is adopting many forms which are generally uncommon to traditional unionism. The union campaigns for improving working conditions in BPOs, healthy and safety issues, youth discrimination at workplace; and enables BPO workers to meet peers with similar problems and demands. It also works to enhance the employment prospects of agents through ‘portable career’ services, including interview training, career workshops, and advice on individual contract negotiation. Moreover, it also organizes spirituality and ‘art of living’ programmes, Christmas parties, meals, sports events, sessions with psychologists, blood donation sessions, etc. (interestingly such programmes are also organized by the BPOs). Most importantly, UNITES Pro’s activities are not only for workers but also for potential workers – the organization also links itself with youth organizations, women’s networks, and schools, etc.16 

As far as CBPOP is concerned, we have already discussed that it adopted a strategy to build awareness, facilitate networking of workers and then organize them in unions. There is a provision for enterprise level unions also. But the general strategy is to form a national level trade union. Because of legal constraints, CBPOP is forming the state level unions first.

CITU has also launched the West Bengal Information Technology Services Association (WBITSA) as a general forum of BPO workers at the state level. The initial strategy may be the same – i.e. making contacts, building awareness among workers in all BPOs, and then enrolling them as members in the general union WBITSA. It is inbuilt in the strategy that forming enterprise levels unions will be the second stage of the activity, when there are enough members of WBITSA from a particular BPO.

It seems that the search for alternative strategies for organizing the BPO workers is just beginning. Currently there are problems but no concrete solutions; however, identifying the concrete problems is first step of the solution also. Some effective tools have already emerged in different initiatives; like the forms adopted by UNITES Pro in accordance with the needs of BPO workers. The other form, of building awareness and networking as the process of unionization, adopted by CPBPO and also to some extent by CITU, is another important part of the new strategy. It seems that now there is a need of more thorough studies on organizing strategies of different initiatives at the grassroot level so that all the emerging new and effective tools can be synthesized to build a comprehensive strategy for unionization in the BPO sector.

Endnotes

 

1.        ‘Indian IT saves $30 bn a year for US, Europe cos’, The Times of India website, 19 August 2010; http://timesofindia.indiatimes.com/business/india-business/Indian-IT-saves-30bn-for-US-European-cos/articleshow/6334156.cms 

2.        Nasscom: Annual Report 2005-06, http://www.nasscom.in/download/Annual_report.pdf 

3.        Carolyn Penfold, ‘Off-shored services workers: labour law and practice in India’, Economic and Labour Relations Review, 1 July 2009 (Centre for Applied Economic Research and Industrial Relations Research Centre, 2009); http://www.thefreelibrary.com/Off-shored+services+workers%3A+labour+law+and+practice+in+Inc-ba0206795641;

Babu P Ramesh, ‘Cyber Coolies’ in
BPO: Insecurities and Vulnerabilities of Non-Standard Work’, Economic and Political Weekly, 31 January 2004; http://www.wbitsa.org/documents/EPW_Remesh.pdf;

Centre for Education and Communication, Communication Workers of America, Jobs with Justice, New Trade Union Initiative and Young Professionals Collective, ‘Binational Perspective on Offshore Outsourcing: A Collaboration Between Indian and US Labour’, October 2006;
http://www.cec-india.org/images/stories/pdf/CECWork_paper/Bi-National%20Perspective%20on%20Offshore%20Outsourcing,%202006.pdf 

4.        Ibid.

5.        Automated Call Distribution (ACD) technology is the computerized telephone system that manages incoming calls and intelligently processes them, for example by automatically routing them to particular call agent stations.

6.        Casual leave is a form of paid time off work for personal or emergency reasons.

7.        Penfold 2009; Ramesh 2004; and Centre for Education and Communication et al. 2006.

8.        Ramesh 2004.

9.        In India the caste hierarchies were structured on the basis of decent occupations and the worst occupations-this means basically the division between non-labouring and labouring communities and the division based on the worst forms of labour. Dalits  were traditionally compelled to remain in the occupations with the worst forms of labour (work that was regarded as ritually impure in the Hindu context); ‘Other Backward Castes’ were engaged in many traditional occupations including agriculture; and the ‘General Caste’ category included mainly the non-labouring Upper castes—priests, warriors, traders, land-documenting castes, etc. Legally the caste divisions based on occupation have been abolished; but because of the distorted capitalist development combined with lack of any radical land reforms, the deprived castes are still deprived castes and privileged castes are still privileged castes. Attitudes linked with castes and also in inter-caste relations still strongly exist. The change is that a majority of the upper caste people are also now pauperized and proletarianized and compelled to join the ranks of labour. Earlier they were more in government, public sector and organized sector industries with social security benefits. but now a large number of upper caste workers are also in the unorganized sector. However, it is still the case that the vast majority of unorganized sector workers are Dalits. BPO jobs requires English-speaking skills and largely only the upper caste middle class is able to educate their children in English-speaking schools, since it is highly costly. Therefore, the upper caste workers form the majority in BPOs.

10.     Centre for Education and Communication et al. 2006.

11.     Ramesh 2004.

12.     From my notes of Informal discussion with five BPO workers in Noida in June 2010 (two of them were thrown out soon thereafter and left the BPO sector).

13.     Centre for Education and Communication et al. 2006.

14.        Santanu Sarkar, ‘Trade unionism in Indian BPO-ITeS industry--insights from literature’, Indian Journal of Industrial Relations, 1 July 2008;

 http://www.thefreelibrary.com/Trade+unionism+in+Indian+BPO-ITeS+industry--insights+from+literatu-