E-commerce giant Amazon, which allegedly laid off thousands of employees across global locations, including India, says that it hasn't sacked any employees and all these resignations were voluntary as part of a 'Voluntary Separation Program (VSP)'.
Amazon representatives appeared before the deputy chief labour commissioner of the Union Labour Ministry in Bengaluru said that it had not sacked any employees, but only let go of those who chose to take part in its separation programme by accepting a severance package.
However, the employees who are impacted by the decision said that the problem is about having no clarity on how the Voluntary Separation Program will work.
"..... will it (VSP) guarantee to provide benefits, will everyone be covered under it or not? And we have just been given just 16 days to opt for it,” said a mid management employee who has recently got laid off by the e-comm and technology company.
It’s been just a week since the news of tech and e-commerce behemoth Amazon laying off 10,000 employees started circulating. Many teams in India have already been impacted with sources from within the company stating that employees working in the devices vertical especially in the Alexa Ai have been impacted.
Several Indian employees at the company received plans for Voluntary Separation Programs (VSPs) after the announcement, urging them to resign voluntarily rather than have their contracts terminated by the company.
On the same, Nascent Information Technology Employees Senate (NITES) filed a petition to the Union Labour Ministry, seeking government’s intervention in the layoffs, calling the layoffs and whole VSP policy unethical.
NITES in its petition to the labour ministry has alleged that as per procedures laid down under industrial dispute act the employer cannot without prior permission from the appropriate government lay off an employee featuring on the muster rolls of the establishment.
The organisation further alleged that a worker who has served for at least a year of continuous service cannot be retrenched unless served notice 3 months in advance and prior permission from the appropriate government and Amazon as clearly violated the existing provisions of Indian labour laws.
On Wednesday, Amazon representatives appeared before the deputy chief labour commissioner of the union labour ministry in Bengaluru and denied the allegations. Defending its stance, the company said it had not sacked any employees, but only let go of those who chose to take part in its separation programme by accepting a severance package.
What is VSP all about?
As per the document received by CNBC-TV18.com 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 no later than 6:30 am India Standard Time on November 30, 2022. The VSP is available to Amazon L1 to L7 employees in Amazon’s AET organization.
The benefits mentioned in the VSP include:
1. 22 weeks Base Pay; plus one-week base salary for every six months of service (rounded to the nearest 6 months) up to a maximum benefit of twenty weeks paid severance; plus
2. Medical Insurance coverage for 6 months as per Insurance Benefit policy or equivalent insurance premium amount in lieu; plus
3. Notice Period or Pay in lieu as per employment contract terms.”
Further employees in performance improvement programs (PIP) are also not eligible for VSP.
Moreover the final decision on which employees application will be considered under VSP will be taken by Amazon. “Amazon reserves the right to approve or deny employee participation in the VSP. All Eligible Employees who timely sign and submit (and do not timely revoke) Application Forms, will be notified by the Company no later than December 9, 2022 at 6:30 AM IST whether they have been approved for or denied participation in the VSP,” reads the document.
Employees under stress due to lack of clarity
“I have no idea 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 layoff happens 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.
NITES has also raised the same concerns stating that the VSP is just an attempt by Amazon to find a way around the labour laws in India.
“Our question to the government is that is VSP valid or not, Amazon clearly wanted to reduce the headcount hence the policy was given but the employees have no clarity on what will happen if they don’t opt for the policy. Ideally a policy like VSP should be a permanent policy but Amazon has introduced on a temporary basis, this move just shows that they wanted to create a hoax inside the company, they have also written that it is company’s will who will get accepted or not which is unethical,” added Saluja.
Sujeetha Reddy an employment law practitioner based out of Hyderabad told CNBC-TV18.com that as per the labour laws of India employees have the right to contest the end of employment legally.
“When an employee is fired by the company, this can be challenged in the court but when the employee does that voluntarily then they don’t get the benefits of this right. Amazon is just trying to keep any legal trouble away through this temporary VSP” she added.
She further explained that this is also an attempt to get as many employees as possible to voluntarily resign before the layoffs get to the peak level which is evident in the tight time-period that they have provided to the employees.
“If they plan to lay off 1000 employees from India, and if in VSP 1200 employees opt for it they will stop 200 employees and the remaining 1000 will be let go which will protect the company from labour laws,” she added.
An employee in the mid-manger position (L-5 grade) told CNBC-TV18.com that as Amazon will have the performance meeting December so it's likely that a lot of employees will be sifted to the Performance Improvement Plan (PIP) and then laid off without being provided the VSP benefits.
CNBC-TV18.com has also written to Amazon for more clarity on the same and the copy will be updated when any response in received.
First Published: Nov 25, 2022 3:48 PM IST
