On Insurance, Management and Trade Unions

“…..All governments try to prevent job losses but they never succeed. Companies have to survive in dynamic market conditions. In a downturn, orders are reduced from customers and the only choice before a company is to reduce its workforce or go bankrupt. Sensible countries, like those in Scandinavia, give employers the freedom to hire and lay off workers based on market dynamics. They protect workers who lose jobs through a well-designed safety net of unemployment insurance and retraining. India’s labour laws do the opposite – they protect jobs and not workers. They assume that a job is for a life time, and do not allow employers flexibility to lay off workers in a downturn….”

Gurucharan Das, a doyen of India’s management thought, has written these words in the editorial column of the Times of India today. While he can be forgiven for some errors, how can one remain silent if the entire article is fundamentally error-prone? I can easily understand why he is considered a marketing guru in India. The title “let’s protect workers, not jobs”, being an example of the prevalence of truth, has nothing to do with the contents of the article. Let me put this anomaly, more to GC Das’s experience in worldly matters than to his erudition for he surely would have turned out to be an Ops-non-entity instead of a Marketing Guru.

For years the Indian industry, including the manufacturing, core, non-core, software, hardware and even middleware(to describe the media) sectors, have been playing around in their balance-sheets with a term called “Insurance”. The life of an asset (previously machines) does not end when its book value becomes zero. However, its Insurance premium does continue in disproportionate quantum to its remaining life. The monetary difference between the two was what could have very well been utilised to create a fund for unemployment insurance to tackle the uncertainty on the demand side. No labour law change required for that. World over, have good companies done that? No! They have just moved to “lesser developed” markets to leverage this difference so that they could pay the salaries of the likes of GC Das, or, in managementese, to increase shareholder wealth! This would have been the perspetive of Karl Marx, had he been alive today, notwithstanding the tokenism that the head of Citibank, Mr. Pandit, proclaims when he says that the annual salary of $100 million is too much for a banker.

“Use every man after his dessert and who shall scape whipping? Use them after your own honour and dignity: The less they deserve, the more merit is in your bounty”
- William Shakespeare, Hamlet, 527.

That a company is a body without physicality is enshrined in the Companies Act, 1935. This part of Company Law, has not been amended from before it promulgation, so it must be a harbinger of a truth larger than our times.

That a company is a body without physicality is enshrined in the Companies Act, 1935. This part of Company Law, has not been amended from before it promulgation, so it must be a harbinger of a truth larger than our times.

The disproportion between contribution to an insurance/depreciation fund and an intelligently benevolent assessment of the life of assets representable in the balance sheets need not go to either massaging the shareholder’s greed nor to buttressing the pockets of the management but to stabilise the fluctuations of Destiny (or luck, or chance, or life, or time, or any unknown variable) , is probably the Marxian perspective for the new economy. Probably it is practised in the Bofors headquarters in Sweden or perhaps even in the banks of Switzerland which are struggling with their identity between keepers of their conscience and keepers of the world’s ill gotten wealth. But there is still a king or queen in Sweden (?),and a President in India, even if he or she is a figure head. Democracy must protect its workers, law can only then protect jobs. As to workers, जा को रखे साईयाँ, मार सके न कोई – Managementese is a Raag Darbari, Das sahib, do not supply false excuses for the greed of men in power, you are a much better man than that.
Learning –
1. LIFE ENDS WHEN IT ENDS. THE REST IS MERE PROJECTION OF THE PAST IN THE VAIN HOPE THAT HISTORY WILL REPEAT ITSELF.
2. WHEN HISTORY DOES ACTUALLY REPEAT ITSELF WE ARE TOO BUSY WITH PAST DATA TO OBSERVE IT.
3. MOST OF US TOIL AS LIFE’S LABOUR SLIPS BY UNNOTICED.

A Question I asked myself during the 3-month period of my job in the government administered Satyam Computer Services Limited –
“ Is it Time for us in India to formulate a labour law construct for the whole world that will also govern intellectual labour?” (After all, we are still acknowledged as the wealthiest, in so far as intellectual capital is concerned)

I hope and pray that this article sets the tone for the answer to the above question world over. Being a karmayogi doesn't debar us from sharing our knowledge, as one member of this blog oft proclaims.