Jeeze! Greedy Brit .com rips off Brits and Indians

May 06, 2003 - London Times
BT under fire for paying Indians ?'quarter UK rates'
By Christine Buckley, Industrial Editor

BT is at the centre of a fresh storm over exporting jobs to India after it emerged that several hundred Indian software developers are being employed in the UK but are being paid in India at greatly reduced rates compared with British workers. The telecoms company is already facing the wrath of unions over plans to open two new call centres employing 2,200 people in India.

Indian software engineers are working on key BT work including the company's core IT systems and creating software for helpdesks. The engineers are employed by Mahindra BT (MBT), an Indian software company in which BT owns a 43 per cent stake. Some observers have claimed that the Indian engineers could be being paid just a quarter of the rate in Britain.

Neither BT nor MBT would reveal the exact number of workers being employed in the UK and paid in India, nor how much their wages were. BT said these were matters for MBT, which has a large UK office. MBT said that BT had told it not to divulge the figures because of "commercial sensitivity". Both said that MBT workers in Britain also received a living allowance for their expenses in the UK on top of their Indian salary, but they refused to say how much.

Jeannie Drake, deputy general secretary of the Communication Workers Union (CWU), said: "It is outrageous to pay people less than the UK rate. If they are working in the country they should be paid in the country, anything else is sheer exploitation. We are actively opposing the movement of work to India."

A spokesman for BT said that MBT had proved the best option for the software work and that it was up to them how they paid their employees. He said that the contract for the work, which is largely done at Hemel Hempstead and Watford in Hertfordshire, was for "many years".

MBT workers do not have to pay tax in Britain if they are working for six months or less. They are also able to have a fast-track route into work in the UK because they fall under an inter-company transfer arrangement. It is also claimed that BT managers are preferring MBT workers because they face less paperwork in taking them on than if they were to employ a UK engineer, since they are already employed in India.

Earlier this year BT faced nationwide protests over its plan to set up two call centres in India. BT promised that no existing work would go to the Indian call centres but the CWU said that BT planned gradually to reduce its investment in the UK. The union says it doubts the pledge that no existing work will go to India because the number of new jobs there is the same as the number BT said it would cut from its UK call centre staff last year. The company, which employs 14,000 people in call centres, has closed 80 per cent of centres to focus on 30 locations.

BT has not ruled out shifting more work to India. Pierre Danon, head of retail business, has said that the company owes it to shareholders to seek low-cost alternatives to its current operations. BT's shift to India follows similar action by other UK companies that are attracted by India's highly educated, skilled and cheap workforce. The moves overseas underline fears that the service sector of the economy will be highly mobile and will migrate as much as manufacturing has.