Lockdown and layoffs: As India fights against Covid-19, many face job loss and salary cuts

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Despite repeated assurances by different sectors and a request by Prime Minister Narendra Modi, job loss and salary cuts are hitting Indians hard.

During his address to the nation on Tuesday, Prime Minister had asked companies to make sure they retain their employees and avoid job loss. But it looks like industries and owners are turning a deaf ear to this request. Manoj, 28, working in Bengaluru was shocked when he was asked to leave by the Human Resource Department of his company. He now states at a bleak future.

“I was given my termination letter by the HR, without any explanation. We were just told to leave.

These are difficult times, without a job it will become very difficult for people to sustain. Who will give jobs to the unemployed in this scenario?” Manoj asked. But Manoj isn’t alone. Many across the country have been handed the pink slip. Another private company in Gurugram asked its employees to go on leave. In a statement, the company said that its business was down over 90 per cent and the ‘focus today is on maintaining a viable business that can survive this worldwide economic disaster’.

Big corporate houses too are not immune to job loss and salary cuts. Bajaj Auto, India’s third biggest two-wheeler manufacturer, has asked its factory employees to take a 10 per cent pay cut if production doesn’t resume on April 21, which employees have agreed to. “We have agreed for a 10 per cent pay cut because we want everyone’s job to be safe. It is better to take a pay cut than lose jobs,” said Dilip Pawar, president, Bajaj Auto Union.

Salary cuts are taking place across sectors.

In a statement, Vistara said that 30 per cent of its workforce will take compulsory no-pay leave of one to three days, depending on employment grades (three days for senior-most employees) from April 15 to 30.

Corporate lawyers believe that coming months will see many corporates opting for changing employees’ salary structures, reducing the working hours along with a cut in salary with lay-offs.

“What a lot of corporates are looking at is changing the existing norms. They are looking at reducing working hours and salaries. That will be the new norm in coming days and citizens should prepare themselves for these times,” said Shikhil Suri, advocate, SC.

MSMEs, LABOURERS HIT

The incidents of migrant labourers at Bandra station in Mumbai and in other parts of the country have yet again raised the questions about their livelihood. But the problem is far bigger than it appears. Small and medium scale industries that employ them are staring at a bleak future.

On Saturday, Ram Prasad, a migrant daily wager in Nashik Industrial Estate, decided to walk back to Gorakhpur in Uttar Pradesh. He is among thousands other who are rendered jobless due to the lockdown and have nowhere to go.

“We are not getting food to eat. Our employer is not giving us any money… We are not able to find any new job as well. So, I have now decided to walk back to Gorakhpur,” Ram Prasad said.

Ram Prasad is not the only one. Dharmendra from Siddharthnagar in UP, Vishal from MP’s Sendhwa, and countless others have a similar tale to tell. “I have not received my salary for three months. We want the government to issue orders to release our salaries. There is no certainty whether we will get jobs in the future or not,” Vishal said. Production in small and medium scale industries has completely stopped. Next few months will be even tougher as production is usually lesser than normal during monsoon.

Nikhil Panchal runs a small engineering unit that supplies to bigger auto industries. With exodus of skilled laborers and uncertainty about their return, he is worried about additional challenges that he is bound to face, one of them being the financial burden.

“Small industries like us should get relief from GST. Power tariffs should also be brought down. The upper limit for PPF should also be increased,” a small business owner, Narayan Kshirsagar said.

PPF, EMPLOYEE TAX WOES

The Modi government, in the last week of March, had asked all public and private companies to ensure that they do not cut salaries of their staff or resort to layoffs amid the lockdown. However, many small units are unwilling to pay salaries to their employees. Several MSMEs announced salary cuts. Ahmedabad-based Kishor Motwani, who owns a small company in Naroda, KK Aliveter, told Mail Today, “I own a company which has an annual turnover f Rs 2 crore & my margin of income is 7 to 10% which is around Rs 10 lakh. What am I supposed to do? I have to pay the employees’ PPF & employee tax as well.”

REFUSAL TO PAY WAGES

Defying the National Disaster Management notification as arbitrary, Ludhiana industrialists have expressed the inability not to pay full wages to the labourers during the lockdown.

The industrialists who met Deputy Commissioner Pradeep Kumar Aggarwal to convey their resentment said that most of the industries in Ludhiana are either small scale or being run from homes. They do not have enough cash reserves to pay the full wages during the lockdown. “Our 90 per cent industry is a cottage industry and is being run from small homes. Hence, paying full wages is not possible,” Darshan Dabar, a representative of the industry association said.

(With inputs from Pravin Thakare in Nashik)

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