France and its trade unions

At a time when we are looking at trade union coming into the IT sector, this news from France does send shock waves – about what could happen if we allow trade unions to take over the country.

We have all seen how strikes can bring down the country to a crippling halt – the famous railway strike and who can forget the infamous Air France strike. The latest is that now thanks to the strong protection of the union, a fraudster, who has been in prison for 3 months is today actually out and he is being paid a compensation!

The person in question is Jerome Kerveil and he was working with Société Générale. Kerviel was a low-level trader and unauthorized trades caused losses of $57 billion and he was fired. He was convicted of forgery and other crimes but his crime was not the losses but the fact that he covered his losses with fraudulent trades.

But a Paris employment tribunal said he was dismissed “without real or serious cause” and ordered the bank to pay him $517,000 in damages for unfair dismissal and back pay. That includes Kerviel’s unused vacation pay and a bonus he was awarded in 2007. This is a depiction of how firing an employee in France could prove to be so expensive.

And this unionism has become a curse for France – companies simply do not have the freedom to fire employees, even when the company is not doing well. That’s the reason why in France most are hired as ‘temporary’ and not permanent as its simply not affordable!

Isn’t this what we are seeing in the auto sector and PSUs? Right from Coal India to BSNL and HMT, it is the unions who rule.