We were discussing yesterday a local firm which went over to employing agency workers, jiggling overime, not providing full benefits, letting go, rehiring in a different way and so on.
A few years ago there was a class action lawsuit against IBM. Thirty-two thousand server administrators were being forced to work overtime without extra pay. IBM lost the suit and paid a $65 million settlement. That’s just over $2000 per affected employee before the lawyers took their share. Then IBM gave all those workers a 15 percent pay cut with the justification they’d get it back in their overtime pay. Next IBM restricted the workers to 40 hour weeks so there would be no overtime.
VP approval was required each time someone was needed to work overtime. The net result was all the server admins worked exactly 40 hours a week and for 15 percent less pay. I’m told by some of those IBMers involved that they were then put at the top of the layoff list. At the end of their severance pay period after being laid off many were rehired as contractors — for less money and no benefits. At that point they were at 50-60 percent of their original pay. Eventually most of those jobs were shipped overseas.
There is a certain amount of frugality going around and a business wants to stay in business in these troubling times. Then there is a certain amount of chutzpah on the part of firms who see the recession as a great excuse to rip workers off blind.
We were also speaking yesterday about karma, though not using that specific word. These firms and the way they are acting will not be forgotten if things ever get better here. There will be many lawsuits and much industrial action. It’s not unlike firms who bump up prices in times of petrol shortage.
Theirs is coming.
Filed under: Politics & economics