TCS Bans Six Employees, Six Staffing Firms In Alleged Hiring Scam

Tata Consultancy Services Ltd. has banned six employees and six business associates or subcontractors, following investigations into whistleblower complaints of an alleged hiring scam at India’s largest private employer.

The complaints, which were received between late February and early March, pointed at certain favouritism being done and favours being received in recruitment of business associates—company parlance for subcontractors or staffing firms that provide contractual employees. 

The whistleblower complaints were investigated and six employees were found in violation of the Tata Code of Conduct, TCS' Chairman Natarajan Chandrasekaran said at the company’s 28th annual general meeting on Thursday. There is an investigation pending on three more employees.

“While we cannot quantify what favours they got, they were certainly behaving in a way that they were favouring BA (business associate) firms,” Chandrasekaran, who is also the chairman of group holding company Tata Sons Pvt. Ltd., said at the TCS AGM.

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, the newspaper reported, citing unnamed sources.

Later in the day, TCS called the media report “incorrect”, even as it found a breach of the code of conduct by certain employees and vendors in subcontractor hiring.

TCS is taking a relook at the supplier management process, in light of the whistleblower complaints, Chandrasekaran said at the AGM on Thursday.

“The company is looking at what the weaknesses are, and will tighten the process to ensure that we do not have such incidents,” he said. “That’s the job we have to do at this point.”

India’s IT bellwether, which has in excess of 6,00,000 employees across 55 countries, has two departments that do hiring 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, Chandrasekaran said at the AGM. “There is a rigorous process in the company to recruit a firm and empanel a firm, to call it a business associate,” he 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 said.

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