Outsourced Without a Say: Is My Employer's Approach Ethical and What Can I Do?

Hello Team, I am Avinash Kumar, working with an organization under yearly contract terms. We receive an appraisal every two years (average 10% to 15% hike). My last appraisal was due in September 2013, but I was not given any increment. The reason cited was that our positions would be outsourced to a resource outsourcing company, and we would receive a good hike at that time.

This month, the transition mentioned above was completed through mutual negotiation among the management. However, I was not consulted to negotiate the terms of my new contract or appointment. I merely received a mail from the third-party company with the offer letter, and the offered CTC remains the same as what I was already receiving (i.e., without any increment).

Queries and Concerns

I seek suggestions on the following queries:

1. Is the process followed by my previous and current employer ethical?

2. Is there any clause governing the percentage of share to be given to the employee (me in this case) based on the payment made by the outsourcing company (my previous organization) to the vendor company (current organization)?

3. If this is malpractice, who is at fault (client site or the vendor), and are there steps that can be taken to address this issue?

Kindly advise on my next approach. If any legal procedures are necessary, please provide guidance on the same.

Have you spoken to your new or old management about your salary? I recommend putting up an application and explaining the situation. Have you done that? You may check the replies to your questions in italics:

1. Is the process which has been followed by my previous and present employer ethical?

*Ethical or not, you should have been given a salary increase. Your old management has let you down. Salaries of white-collar workers who work on contract employment are fixed by principal employers. The contractor just adds his service charge to the fixed salary, nothing more than that.*

2. Is there any clause that governs the percentage of the share that is to be given to the employee (which is me in this case) based on the payment made by the outsourcing company (my previous org.) to the vendor company (current org.)?

*No. How the business transaction is conducted is a matter between two parties. Employees do not have any locus standi in between.*

3. If this is malpractice, who is the culprit (client site or the vendor), and can any steps be taken to confront the same?

*What is the nature of your industry? What is the nature of your work? What is your designation? Does your work fall within the purview of the "core business" of the principal employer? If yes, then they cannot put you on contract. Contract employment is for non-core activities like housekeeping, security, etc. Contract workers cannot do the same type of work as regular ones.*

Nevertheless, all said and done, would you like to go to court and fight your case? If you try doing that, within a day, the principal employer will remove you for some or another reason.

Final Comments: You have two options. Ask for the raise and continue whether the principal employer agrees to give a raise or not. If you opt for this choice, then better do it without grumbling. The second is to quit employment. For this, take a call based on the current industrial scenario.

Thanks,

Dinesh Divekar