Rogue mercenaries unleash the ECV virus again!

A COUPLE of years ago, a young MCA graduate was referred to me for a job. Since most IT companies did not recruit freshers, I decided to hire him myself, despite there being no real post vacant. A scant eight months later, he quit having received a better offer from another company. He wanted to leave at once, as he was to join them in a week's time.

A week? Seven days are too few even for a liberal organisation with the most lenient HR policies.

It's not impossible to find a replacement at such short notice but he should have known that he was violating one of the key tenets of his contract of employment - the Notice Period! Every employee is contracted to serve a notice period of one month at least when at a junior level in an organisation while those at the senior levels generally agree to serve a notice period of two months or more) before they can - `demit office'. The reason my young friend gave me was shocking, apparently HR at his prospective employers had insisted that he join them in a week or lose the offer!

Employment contracts usually state that should an employee not serve the agreed notice period he would be required to forfeit his salary for the period of the required notice.

Unfortunately, this particular clause is often misused by both employees as well as organisations. An employee can be excused from serving the notice period only in some special circumstances like when the company disengages the employee on grounds of questionable integrity or moral turpitude.

At these times, the company pays the due salary to the errant employee. There are also times when employees need to leave for reasons of medical or social exigency. At these times, the employee will forgo his salary for the past period (technically to defray the expense of hiring a temporary functionary to discharge his duties till the organisation can find a replacement for him).

Unfortunately, many employees turn this clause to their advantage when they need to leave even when there is no medical or social reason to demit office immediately. Forfeiting salary is not a normal transaction because the company is not in the business of earning its income from its errant employees. The withholding or the recovery of money from exiting employees is merely a deterrent to hasty departure.

Employment Contract Violation (ECV) Virus - The deadly ECV virus that had threatened the IT industry has been revitalised after a 3-year gap. When a contract is violated, it cannot be seen just from an individual point of view. There are four dimensions to this practice of Contract Violation- the employee angle, the recruitment agency angle, the HR angle and the CEO angle. In one way or the other, each of them is like a mercenary looking out for himself .

As an individual, one may be tempted to walk out on his employer when he gets a lucrative offer that pays more or provides him better perks and incentives. Nary a thought is given to the company that has trained him and given him the crucial work experience that helped him get his new job. To the employee, what he cares about is the enhanced package being offered.

The next dimension is of the Recruitment Consultants. A recruitment consultant would like the employee to join the new company the day after he gets the offer. This is because the consultant gets paid only after the selected employee joins. Secondly, there is a chance that the employee might have second thoughts or worse still, look for another offer (through another consultant). So longer the joining period granted, greater the risk of the candidate not taking up the offer, necessitating the search to be re-started for a suitable candidate; an expensive and time consuming process.

HR Departments are equally to blame. Why does it give such a short period for a candidate to join them, when the appointment letter it issues to the same candidate stipulates a notice period of 30 to 60 days? After all it is the department that is assigned to uphold the sanctity of the employment contracts.

While encouraging an employee of another company to quit his job with little or no notice, the department cannot stop one of their own doing the same.

The HR Department however cannot be blamed totally because it is the CEO who puts the pressure on HR.. Earlier, companies would recruit people well in advance and keep them waiting on-the-bench ready to meet any need.

Today the CEO follows the JIT (Just in Time) model - without realising that if everyone follows this method of hiring, the industry will throw up a number of incomplete or delayed projects.

It is time the HR departments took stock of the situation. They should insist on employees serving the stipulated notice time so that an appropriate replacement can be found, inducted and put in place.

No organisation can thrive as a mercenary Looking out only for itself, where it will demolish its own culture as well as the symbiotic relationship between organisations.

One solution I can suggest is, that the IT companies form an Ethics Club (for want of a better name), comprising officers representing the HR departments, recruitment consultancies and the CEOs of the leading IT firms in each city. Similar clubs exist to share data on compensation. This committee should be able to put a stop to the practice of violating contracts. The names of the employees and the companies that violate the contract should be publicised, and possibly blackballed in the community.

A committee of this kind could well be the possible panacea to cure the dangerous and swiftly proliferating ECV virus that has become a debilitating threat to the IT industry.

T. MURALIDHARAN

T Muralidharan is the Executive Chairman of TMI Network

murali.hyd@cnkonline.com