Labor Unrest at Honda Motorcycle & Scooter India (Private) Limited

"The violence near the Honda plant at Gurgaon was instigated by outside forces who had misled the workers."1 - Spokesperson, Honda Motorcycle & Scooter India Pvt. Ltd., in 2005. "The incident was a disadvantage for India's image as a foreign investment destination and also gave a negative image of !apanese management."" - Yasukuni noki, !apanese "#$assador to India, in 2005. "This incident has brought to light the need to look at labor laws afresh. #e cannot have archaic labor laws in a liberali$ed economy."% - Surinder %apur, &'air#an, Sona (roup,5 in 2005.

Introduction
On July 25 2!!5 t"e mana#ement o$ t"e Honda Motorcycle & Scooter India (Private) Limited (HMSI) a %"olly&o%ned subsidiary o$ Honda Motor 'om(any Limited) (HM'L) encountered violent (rotests $rom %or*ers t"at disru(ted (roduction at t"eir (lant in +ur#aon,HMSI %or*ers %ere severely beaten u( by t"e (olice and ne%s(a(ers and ./ c"annels #ave %ide covera#e to t"e violence o$ t"e action- ."e (rotest $ollo%ed si0 mont"s o$ simmerin# labor unrest at t"e HMSI $actory in %"ic" t"e %or*ers also resorted to 1ob slo%do%n 2(since 3ecember 2!!4 %"en t"e %or*ers5 demand $or an increase in %a#es %as re1ected by t"e HMSI mana#ement)Labor Unrest at Honda Motorcycle & Scooter India (Private) Limited & 6e0t Pa#e77

1] "Outsiders ] $s o% o&erating

Instigated

Labor

Unrest:

Honda

Management,"

www.indiacar.net,

July

!,

""#.

""#, Ja&anese in'estment in India was around U() in

billion and t*ere were around

#" Ja&anese com&anies India. -, -, ""#. ""#.

+] ,us*al Jeena, "Labor Unrest at Honda May Hurt India," www.news.monstersandcritics.com, July .] (. ,alyana /amanat*an, 2rou& is "India: an Is Labor 0rouble /esur%acing1" automoti'e www.redi%%.com, com&onent $ugust

#] (ona

India3based

manu%acturer. ""#, it *ad

-] HM4L, *ead5uartered in 0o6yo, Ja&an, was t*e largest manu%acturer o% two3w*eelers in t*e world. $s o%

more t*an 1 " manu%acturing %acilities in +" countries worldwide and its com&re*ensi'e range o% business *ad broug*t t*e com&any !] 2urgaon is o'er a 1! satellite million town near customers 7ew 8el*i, annually. India.

9] Job slowdown re%ers to slowing down o% o&erations by em&loyees.

8it" t"eir demands bein# re1ected by t"e mana#ement t"e %or*ers tried to $orm a trade union and t"is resulted in a con$rontation %it" t"e mana#ement- 9i$ty %or*ers o$ t"e (roduction team %ere sus(ended and $our ot"ers dismissed in May 2!!5- :((arently t"ere %as a s"o% o$ stren#t" bet%een t"e mana#ement and t"e %or*ers8"ile t"e mana#ement alle#ed t"at t"e %or*ers %ere resortin# to 5#o&slo%5;tactics and %ere t"reatenin# not to return to %or* until t"eir collea#ues "ad been reinstated t"e %or*ers alle#ed t"at t"e mana#ement %as usin# (ressure tactics suc" as victimi<ation o$ active union members and a 5loc*&out5=!to brea* t"e bac* o$ t"e union-

On July 25, 2005, the workers of the plant were demanding reinstatement of the suspended employees when some workers allegedly attacked policemen on the plant premises.
."is led to (olice intervention and a violent tussle ensued bet%een t"e (olice and t"e %or*ers in %"ic" %or*ers (rotestin# (eace$ully %ere also beaten u(."e (olice %ere re(orted to "ave overreacted and it %as alle#ed t"at t"ey "ad been over<ealous in (rotectin# t"e interests o$ t"e HMSI mana#ement even %it"out any direct re>uest $rom t"e com(any5s mana#ement (?e$er to @0"ibit I $or some ima#es o$ violence durin# t"e HMSI (rotest)9or com(anies t"e incident brou#"t to t"e $ore t"e need to maintain sound industrial relations to ensure (roductive and (ro$itable o(erations@0cer(ts 77

:] In industrial relations, ;go3slow; is a term used to de%ine a slowing down o% &roduction by a labor %orce during an industrial dis&ute or grie'ance, instead o% disru&ting &roduction totally by resorting to a stri6e.

1"] 0*e wit**olding o% wor6 %rom em&loyees and closing down o% a wor6&lace by an em&loyer during a labor dis&ute. It is also called s*utout.

)ack*round +ote

HM&L Soic"iro Honda a mec"anical en#ineer establis"ed t"e 5Honda .ec"nical ?esearc" Institute5 in Hamamatsu Ja(an in =;4)- His idea %as to develo( and later (roduce small t%o&cycle motorbi*e en#inesHonda5s $irst (roduct an :&ty(e 5!cc bicycle en#ine %as (roduced in =;4,- In =;42 HM'L %as incor(orated %it" a ca(ital o$ A = million- ."erea$ter t"e com(any started to desi#n and (roduce li#"t%ei#"t motorcycles- Honda5s $irst motorcycle t"e 3&ty(e t%o&stro*e ;2cc %as (roduced in =;4;---

HMSI HMS was esta!lished on "ugust 20, #$$$, and a plant was set up at Manesar to manufacture two%wheelers for the ndian market. HM&' made an initial in(estment of )s. * !illion to esta!lish the plant which had an annual production capacity of 200,000...
La$or ,nrest at HMSI
."e +ur#aon (lant o$ HMSI "ad (eace$ul labor relations $or t"e $irst $e% years a$ter it %as set u( in October =;;;."e mana#ement entered into labor contracts %it" individual laborers %"ic" covered t"e basic %a#e structure and detailed (arameters s(eci$yin# t"e %or* conditions $or %or*ers- In 3ecember 2!!4 t"e %or*ers at HMSI5s +ur#aon (lant started demandin# t"at t"e mana#ement increase t"eir %a#es commensurate %it" t"e com(any5s #ro%t" in t"e mar*et---

-'e )la#e (a#e

."e mana#ement and t"e %or*ers traded alle#ations and counter alle#ations on %"at t"e root cause o$ t"e dis(ute %as- ."ey blamed eac" ot"er $or t"e situation t"at ultimately too* an u#ly turn on July 25 2!!5- ."e mana#ement "eld t"e %or*ers res(onsible $or indisci(line and $or slo%in# do%n (roduction %"ile t"e %or*ers insisted t"at t"ere "ad been no indisci(line on t"eir (art and t"at t"e mana#ement %as brin#in# u( t"is issue only to (revent t"e $ormation o$ a trade union at HMSI--@0cer(ts 'ontd---77

.iolation o/ La0s1
Some analysts c"ar#ed t"at t"e incident %as $allout o$ t"e lon#&term o((ression and mal(ractices at t"e +ur#aon $actory by t"e HMSI mana#ement-

."ey alle#ed t"at HMSI5s mana#ement "ad violated certain la%s relatin# to t"e %el$are o$ %or*ers (?e$er to @0"ibit III $or la%s related to %el$are o$ %or*ers in India)It %as re(orted t"at a %or*er "ad alle#edly been *ic*ed by a Ja(anese mana#er on t"e s"o( $loor in 3ecember 2!!4- ."e services o$ $our ot"er %or*ers %"o "ad come to "is rescue %ere alle#edly terminated---

-'e "/ter#at'

HMS was esta!lished on "ugust 20, #$$$, and a plant was set up at Manesar to manufacture two%wheelers for the ndian market. HM&' made an initial in(estment of )s. * !illion to esta!lish the plant which had an annual production capacity of 200,000...
&ould t'is ,*ly Situation 'ave $een "verted1
Several $actors can lead to a con$lict bet%een t"e %or*ers and t"e mana#ement o$ any com(any and as suc" com(anies s"ould be (re(ared to trace t"e root cause o$ t"e (roblem and solve it- Industry e0(erts o(ined t"at %it" (ro(er understandin# o$ t"e industrial la%s and causes o$ dis(utes t"e mana#ement and t"e %or*ers o$ any com(any could avoid incidents suc" as t"e one at HMSI (?e$er to @0"ibit I/ $or t"e ?oot 'ause :nalysis $or Labor Unrest)---

2'i$its
@0"ibit IB Some Ima#es o$ /iolence durin# t"e HMSI Protest @0"ibit IIB Some More +lim(ses $rom t"e HMSI Incident @0"ibit IIIB La%s ?elated to 8el$are o$ 8or*ers in India @0"ibit I/B ?oot 'ause :nalysis $or Labor Unrest

&ase 3etails4
'ase 'ode 'ase Len#t" Period Pub 3ate .eac"in# 6ote Or#ani<ation Industry 'ountries B B B B B B B B H?OC!== == Pa#es =;;, & 2!!= 2!!= :vailable Microso$t 'or(oration In$ormation .ec"nolo#y US:

Price4
9or delivery in electronic $ormatB ?s- D!!E 9or delivery t"rou#" courier (%it"in India)B ?s- D!! F ?s25 $or S"i((in# & Handlin# '"ar#es

-'e#es
H? Problems

"$stract4
."e case e0amines t"e c"ar#es o$ #enderGracial discrimination and se0ual "arassment a#ainst leadin# I. com(any Microso$t- It e0(lores in detail t"e

treatment meted out to $emale em(loyees in t"e com(any5s initial years and t"e measures Microso$t too* to im(rove t"e %or* culture o$ t"e or#ani<ation."e case also discusses t"e la%suits a#ainst Microso$t t"at alle#e racial discrimination and analy<es t"e im(lications o$ suc" c"an#es $or t"e com(any-

Issues4
H 9actors t"at contribute to discrimination and "arassment and t"e im(act o$ suc" be"avior on t"e com(any and its em(loyees

&ontents4
Pa#e 6o= 2 D 4 , ;

'"ar#es o$ 3iscrimination Cac*#round 6ote :bout ?acialG+ender 3iscrimination & Se0ual Harassment ."e '"ar#es :#ainst Microso$t In .rouble & :#ain @0"ibits

%ey 5ords4
c"ar#es #ender racial discrimination se0ual "arassment I. com(any Microso$t treatment meted $emale em(loyees initial years Microso$t im(rove %or* culture or#ani<ation la%suits

Microso$t & 3iscrimination at t"e 8or*(lace

"How is &icrosoft responsible for my stress disorder' (imple) 1 years of sub*ecting me to une+ual and contradictory treatment) debasement) se,ual harassment and outright illegal practices in its hiring) management) and disabilities protocols." - " /or#er /e#ale Microso/t e#ployee, in 3ece#$er 6778. "There are glass ceilings and glass walls in place for -frican -mericans at &icrosoft. #e are stunned and disappointed in their treatment of .lack employees." - 5illie (ary, la0yer o/ an e2-Microso/t "/rican "#erican e#ployee, in !anuary 2006.

&'ar*es o/ 3iscri#ination
In January 2!!= seven o$ Microso$t5s $ormer and current :$rican&:mericans em(loyees $iled a discrimination suit a#ainst t"e com(any- One o$ t"e lar#est discrimination suits ever $iled in t"e US it alle#ed racism and (lantation mentality= at t"eir %or*s(ace and sou#"t I 5 billion in dama#esMicroso$t %as accused o$ discriminatin# a#ainst its em(loyees t"rou#" (er$ormance evaluations (ay

(ac*a#es (romotions %ron#$ul terminations and retaliation- ."is suit consolidated all t"e discriminatory suits $iled se(arately by t"e seven em(loyees."e suit %as subse>uently #iven t"e status o$ a class action 2 e0tendin# its reac" to Microso$t5s vast base o$ $ormer and current :$rican&:merican em(loyees-

+hus, all the former and current "frican%"merican salaried employees employed !y Microsoft ,in the -S. on or after Octo!er /, #$$0 and all the former and present female salaried employees employed !y Microsoft on or after 1e!ruary 2*, #$$$ were included in the suit. +he filing was primarily !ased on the e2isting case of )ahn Jackson,* one of the first Microsoft employees to take legal action against Microsoft for racial discrimination.
."e (lainti$$ claimed t"at Microso$t5s em(loyment (olicies and (ractices (ermit its mana#ers to e0ercise discretion %"en decidin# on evaluations (ay (ac*a#es (romotions and 1ob selections resultin# in decisions t"at reveal a raceG#ender bias3urin# t"e early =;;!s many discrimination related suits "ad been $iled a#ainst Microso$t- In t"e 3onaldson4 /s- Microso$t case t"e (lainti$$ alle#ed t"at Microso$t discriminated a#ainst t"e Clac* and $emale %or*ers by (ayin# t"em smaller salaries bonuses and stoc* o(tions t"an it (aid %"ite males (er$ormin# t"e same %or*- ."e suit also alle#ed t"at Microso$t "ad even retaliated a#ainst Clac* and $emale em(loyees %"o (rotested a#ainst t"is discrimination

&'ar*es o/ 3iscri#ination &ontd...

?eactin# to increasin# media covera#e o$ la%suits $iled a#ainst it Microso$t claimed t"at t"e com(any did not tolerate em(loyee discrimination and %as $ocused on o$$erin# unbiased treatment to em(loyees and (romotin# %omen and members o$ minority #rou(s in its or#ani<ation- Ho%ever $e% (eo(le bou#"t t"eir story- 8illie +ray one o$ t"e leadin# attorneys dealin# in discrimination suits ar#ued t"at Microso$t s"o%ed (lantation attitude %"en it came to dealin# %it" :$rican&:merican %or*ers- +ray remar*ed t"at in =;;; only 2-)J o$ t"e Microso$t5s em(loyees and only =-)J o$ its mana#ers %ere Clac*- ."rou#"out t"e =;2!s and early =;;!s Microso$t remained in t"e ne%s $or discriminatin# a#ainst %omen and :$rican&:mericans-

Many cases of !oth se2ual harassment and discrimination against female employees were reported. +hough the issue of racial discrimination arose in the late #$$0s, it was only in 2000

that the employees initiated legal proceedings against Microsoft, demanding e3uality and 4ustice.
)ack*round +ote
8illiam H- +ates (Cill +ates) alon# %it" "is $riend Paul :llen establis"ed Microso$t 'or(oration in =;,5- Cill +ates initially $ocused on so$t%are instead o$ "ard%are- Over t"e ne0t t%o decades Microso$t emer#ed as one o$ t"e ric"est and most in$luential com(anies in t"e %orld- In =;;2 t"e com(any became t"e %orld5s most "i#"ly valued com(any re(ortin# a mar*et ca(itali<ation value o$ I4)) billionMicroso$t is en#a#ed in develo(in# manu$acturin# licensin# and su((ortin# an e0tensive ran#e o$ so$t%are (roducts and services $or a multitude o$ com(utin# devicesMicroso$t sells so$t%are to over a =2! million (eo(le- Its (roducts are available in over D! lan#ua#es and are used in more t"an 5! countries- ."e com(any is also involved in develo(in# "i#"ly advanced robust tec"nolo#ies $or ne0t #eneration so$t%are (roducts- Microso$t5s success %as attributed to (amon# ot"er t"in#s) its e$$ective recruitment and em(loyee retention strate#ies- Microso$t "ad al%ays attem(ted to attract t"e best talent:ccordin# to a (ress re(ort KMicroso$t see*s a (articular ty(e o$ smart (erson one %"o is (ra#matically inclined verbally a#ile and able to res(ond de$tly %"en c"allen#ed-K Cecause o$ its e$$icient (er$ormance a((raisal system and %or* culture Microso$t "ad a very lo% em(loyee turnover rate- Microso$t #ave incentives to em(loyees on t"e basis o$ t"eir (er$ormance a((raisal- @m(loyees under%ent a (er$ormance revie% every year---

"$out 9acial:(ender 3iscri#ination & Se2ual Harass#ent

?acial and #ender discrimination may be described as any verbal or ("ysical act %"ic" is intended to cause or could reasonably be e0(ected to cause individuals or #rou(s to $eel intimidated demeaned or abused because o$ t"eir racial et"nic #ender or national bac*#roundSe0ual Harassment may be e0(lained as an ille#al $orm o$ #ender discrimination %"ic" is void under .itle /II o$ t"e United States5 'ivil ?i#"ts :ct o$ =;)4."e state and $ederal la%s o$ t"e United States (ro"ibit s(eci$ic *inds o$ discrimination.itle /II o$ t"e 'ivil ?i#"ts :ct o$ =;)4 states t"at Kmana#ers can5t "ire $ire (ass over $or (romotion deny a vacation re>uest do anyt"in# surroundin# t"e terms and conditions o$ em(loyment because o$ someone5s (rotected c"aracteristics- ."is means you can5t ma*e decisions or ta*e em(loyment actions because o$ an em(loyee5s race color #ender reli#ion or national ori#in-K---

-'e &'ar*es "*ainst Microso/t

nstances of gender5racial discrimination and se2ual harassment were common in Microsoft since the #$60s. +he company was e(en said to !e the 7most disdainful place for women to work7 during the #$60s. n its initial years, Microsoft had only a few hundred employees, most of them male. +he only women employed in Microsoft were those who edited technical manuals. +he work culture in the company was !y and large undisciplined. "ccording to analysts, all the manners, attri!utes and traits that were not accepta!le in con(entional society were highly pre(alent in the company. "ccording to a report, 8Microsoft was a geeks paradise, where issues such as interpersonal skills and personal hygiene had no importance and the presence of women was !arely tolerated. t was the !ase of newly e(ol(ed computer nerds, who prided themsel(es on !eing masters of their fields where women had yet to take acti(e part and were highly skeptical of the a!ilities of their female counterparts.8...
In -rou$le - "*ain
8"ile t"e number o$ (lainti$$s com(lainin# o$ discrimination at Microso$t *e(t mountin# in 2!!= Microso$t claimed t"at it %as committed to diversity and did not tolerate discrimination o$ any ty(e in its em(loyment (ractices- ."e com(any announced t"at it "ad made considerable (ro#ress in increasin# t"e number o$ minorities %or*in# at Microso$t and "ad demonstrated its commitment to diversity and e>uality by (romotin# %omen and minorities:ccordin# to com(any sources as o$ October 2!!! minorities accounted $or =)-5J o$ total mana#erial (ositions in Microso$t and 22J o$ t"e domestic %or*$orce o$ t"e or#ani<ation as a#ainst only =,J in =;;,---

2'i$its
@0"ibit IB Microso$t5s 9ailure in Preventin#G ?emedyin# 3iscrimination @0"ibit IIB @liminatin# 3iscrimination in Or#ani<ations