Poor HR Practice & Human Right Violation Reporting in the BRSR ( SEBI ) Audit Report – Case of Bajaj Auto Limited.

 BRSR  (SEBI)  AUDIT : HR Practice - Human Right Violation  

* Birendra K Jha                                                                                                                                                                               Certified Social Auditor; Practitioner Social Impact Assessment Audit; Practitioner BRSR (SEBI ) Audit-ESG Audit. EMail: birendrajha03@yahoo.com

Bajaj Auto is one of the top 1000 SEBI listed companies in India. This company now has to file after mandatory Third Party Audit,  report for the BRSR on the employees Human Right protection (Principle 5). Social Auditors have responsibility to drive companies like Bajaj Auto to protect Labour Right and  Human Right protection. For this it needs deep HR Audit by the Social Auditors. A case is here from Bajaj Auto Limited. This is learning lesson for all the industries in India.  

What Poor HR Practice is Followed in India?

This is time for the Social Auditors to drive change in the corporate sector. The BRSR ( SEBI ) Audit should must check the HR Practice of hiring employees under "temporary" or "contract" nature. This is  ceasing employees  fundamental right of becoming Permanent Employees. This HR Practice is illegal and clearly attracts labour law violation.  

In India this poor  HR Practice is followed by and large by most industries. This is creation of temporary or contract group  by creating  "illusion of intermittent employment" or "creating artificial breaks". HR in order to reduce cost of production, use this malafide trick frequently. Here HR  implements a poor work culture to manage production fluctuations. This is  completely illegal and unfair labour practice in India. To manage this production fluctuations, HR manipulates even the relevant employment records sometimes. 

Here HR keep in continuation temporary group of employees for a very long periods of service giving "artificial breaks" in service.  This is cost saving instrument. It can be understood further with this example. Suppose on permanent employees where cost is Rs 100, the same cost on temporary employee is Rs 30. Near about 70% cost saving is there in labour cost bill. 

Such temporary employees are "poor skilled" and produces "defect quality good". They are not given regular training. They create more errors at the production floors then the permanent employees. Production even fight with HR that they have supplied raw heads without skill. Ultimately defective good is produced at the production floor. At last the end consumer bears the blood of the cheap labour and the cost of the poor quality. 

In auto and other indutries throughout India,  HR use this poor practice of hiring "temporary or contract employees". This may be cost saving for the industries but this is clear Human Right violation 

The issue of "artificial breaks" in service has been addressed in various important judgments clearly citing the practice as "unfair labor practices".  The "artificial breaks" and their implications for the regularization of employees is illegal in India. The courts have consistently held that artificial breaks should not be considered valid interruptions of service when determining an employee's eligibility for benefits of permanent employees under the labor laws. See some important ruling judgements: 

  

a) Hon'ble High Court of Himachal Pradesh - Divisional Forest Officer Vs. Shri Singh (2013):

The practice of giving artificial breaks to prevent employees from completing the required number of days for regularization is unreasonable and constitutes unfair labor practices. 

b) Hon'ble Supreme Court of India  in   American Express International Banking Corporation v. Management of American Express International Bank Corporation  

Hon'ble Supreme Court of India  in H.D. Singh v. Reserve Bank of India.

Hon'ble Alahabad High Court in Gangol Sahkari Dugdh Utpadak Sangh Ltd Vs. Presiding Officer , Labour Court -II Meerut ( 2017 ):  

The  artificial breaks should be excluded when calculating the days of service required for regularization.

c) The Hon'ble Supreme Court in Mohd. Abdul Kadir and Anr. v. Director General of Police, Assam.

Hon'ble High Court Himachal Pradesh in State of H. P. VS Keshav Ram - Himachal Pradesh (2017)

The artificial breaks should not disrupt the continuity of service. The court ruled that employees should be considered in continuous service despite such breaks, particularly when the breaks are designed to avoid compliance with labor laws .

d) Hon'ble Gujarat High Court in Chief Executive and Vice Chairman VS Rameshkumar Pratapray Yogi (2016).

The practice of issuing appointment letters for short durations (e.g., 29 days) followed by brief breaks was an intentional strategy to create the illusion of intermittent employment. This was ruled as an unfair labor practice, and the employee was deemed to have been continuously engaged.

e) Hon'ble Calcutta High Court In Aloke Singh VS Indian Statistical Institute (2022).

The practice of giving artificial breaks to contractual employees, asserting that such actions were unjustifiable and aimed at circumventing legal protections .

f) Hon'ble Jharkhand High Court in Maini Devi, wife of Ledo Mahli VS State of Jharkhand (2017) and  Hon'ble Kerala High Court in State of Kerala Vs. Vijayamma Ponnappan (2021).

The courts have upheld orders for regularization based on the recognition that artificial breaks should not impede an employee's rights to benefits, as seen in cases where the courts directed the regularization of employees who had been subjected to such breaks. 

Thus in HR Practice, unfair hiring practices should be avoided to reduce labour cost. The artificial breaks in service in contract employees, temporary employees are totally illegal in India. HR should practice  fair treatment with  employees.

Human Right Violation Case In Bajaj Auto:

Rajendra Kumar and 79 other workers were working in Bajaj Auto. The company  is engaged in manufacturing of two-wheelers and three-wheelers and it has factories at Akurdi (Pune District) and Waluj (Aurangabad District). Rajendra Kumar and 79 other workers  were engaged as Welders, Fitters, Turners, Mechanics, Grinders, Helpers, etc.  They were engaged for seven months and after completion of seven months they were given temporary artificial break. After this break they were engaged again for seven months.  Thus they were unable to claim status of "Permanent Employees" where work of 240 continuous days are needed. They were artificially terminated before 240 days of continuous work. Thus they were deprived of the status available under clause 4-C of the Model Standing Orders as appended to Schedule I-A of the Industrial Employment (Standing Orders) Act, 1945 (for short “the 1945 Act”). 

The Bajaj Auto in the name of artificial "production fluctuations" hired, Rajendra Kumar and 79 others,  as temporary workers on low cost. This was completely illegal practice. 

Conclusion: 

a) The Bajaj Auto is a Maharashtra listed company. In Maharashtra the Maharashtra Recognition of Trade Unions and Prevention of Unfair labour Practices Act 1971 is in operation. This Act clearly prohibits Bajaj Auto to employ workers as "badlis, casuals, or temporaries" with the intent to deprive them of permanent status. How the HR of the Bajaj Auto did the basic error. Either this is intentional or HR has lost knowledge on the HR Law!    

 

b)  Hon'ble Supreme Court of India has directed very clearly in this case that the Bajaj Auto is indulged in unfair labour practice with Rajendra Kumar and 79 other workers.  

c) It also observed that  the documentary evidence of manpower recruitment  etc. are all  destroyed by company.   

Lesson for the Industries:

a) Implement fair HR Practice. Industries should not indulge in Human Right violation. The due Labour Right should must be protected. 

b) The HR skill should be improved. The industries should regularly conduct HR Audit. This should must appear in BRSR Report and Annual Report by the Directors.