TCS Fires 16 Employees, Bars Six Vendors Involved In Hiring Scam

Tata Consultancy Services Ltd. has fired 16 employees and barred six vendors from the company over a purported hiring scam that surfaced in June this year.

Upon conclusion of an investigation launched on June 23, India's largest private employer found 19 employees to be involved in a bribes-for-jobs scam in the resource management function. “Sixteen employees have been separated from the company for code of conduct violations, and three employees have been removed from the resource management function,” TCS stated in an exchange filing on Sunday.

Additionally, six vendors, their owners and affiliates have been debarred from doing any business with India's largest IT services firm.

TCS is now taking various steps to strengthen its resource management function, including: 

• Regular rotation of personnel in the resource management function

• Enhanced analytics on supplier management 

• Periodic declarations by vendors on Tata Code of Conduct 

• Periodic audits of the vendor management process

On June 23, the Mint newspaper reported that TCS had discovered within its ranks a multi- crore recruitment scam that compromised the hiring process at the Tata Group firm.

A whistleblower, in a communication to TCS' chief executive officer and the chief operating officer, had alleged that a senior executive at the company's resource management group was accepting bribes from staffing firms for years. People involved in the scam may have earned Rs 100 crore through commissions, Mint reported citing unnamed sources.

Following this, on June 29, TCS said that it has banned six employees and six business associates or subcontractors over the alleged hiring scam.

That, however, doesn't mean there was a fraud at the company, TCS said in its exchange filing on Sunday. There was no financial impact either. 

“The issue relates to breach of the company's code of conduct by certain employees and vendors supplying contractors,” TCS said. “And no key managerial person of the company has been found to be involved.”

“As a Tata Group company, we have a zero-tolerance policy towards such unethical conduct and the actions of these individuals do not reflect our values. We expect all our stakeholders and our employees to strictly adhere to the Tata Code of Conduct, which forms the bedrock of our integrity.”

Hiring Process At TCS

India's IT bellwether, which has nearly 600,000 employees across 55 countries, has two departments that conduct the hiring process for the company.

• HR & Talent Acquisition, which hires people on the payroll.

• Resource Allocation Group, which deploys available resources.

Whenever there is a talent or skill shortage, TCS has a set of business associate firms—about a thousand across its global operations—to get contractual employees. At any point of time of deployment, about 2-3% are contractual workers.

The two whistleblower complaints related to certain individuals in the company, who were working with certain business associate firms to recruit contractual workers in their favour, Tata Sons Chairman Natarajan Chandrasekaran said at the TCS AGM on June 29. “There is a rigorous process in the company to recruit a firm and empanel a firm, to call it a business associate,” he had said.

For a Tata Group company, the most important thing that is expected of every employee is ethical conduct and integrity in operation. That comes ahead of any financial performance, Chandrasekeran had said.

“Whenever there is a violation of any ethical conduct by any employee, it pains us and pains me very deeply,” he had said. “We take it extremely seriously, and we will always deal with this with very strong action.”