Poor HR Practice - Human Right Violation In Hyundai Motor.
BRSR (SEBI) AUDIT -ESG 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
Hyundai Motor is a South Korean automaker that has secured entry in the Indian market. This is SEBI listed entity within the top 100 companies.
Hyundai Motor has mandate to sell its car overseas and the Indian markets only if its business operation protects Human Right.
In 2022 the Hyundai Board of Directors was alerted by the investors that child labour and poor workplace on health and safety is causing reputational damage across the globe to the Hyundai Motor. The shareholders had urged Hyundai's board of directors to oversee the company's Independent Assessment of human and labor right practice in the supply chain with publicly released results and ongoing monitoring. But Hyundai, skipped it.
Use of Child Labour by Hyundai In Assembly Line:
US Authorities booked Hyundai at Albama Plant for using child labour at the assembly line. The apprehension of shareholders, addressed to the Hyundai Board of Directors, were right. Children as young as 13 were found working at the Hyundai Plant. This was severe Human Right violation. Hyundai was caught red handed. Why? Only for reaping the illegal profit of low wage cost.
Hyundai used this very silently. This was poor HR Practice. This was ugly in nature. Hyundai never conducted Third Party Independent Audit of Human Right Programmes in HR Practice regularly. If there was any, it was just eye-wash.
The U.S. Department of Labor filed a complaint on May 30, 2024, asking Federal Court to prevent Hyundai from employing children illegally. The US Government also ceased through court profits earned through the use of oppressive child labor. Meanwhile, the US District Court has given further order not to ship any of the manufactured parts which were produced from child labor. This last order blocks Hyundai to stop selling its cars, until it is certified completely that no child labour is used by Hyundai in global operation.
Additionally the US Authorities have warned Hyundai:
"employers should be aware of employees working at their facilities and should ensure that the employed labors are within the legal working age".
Thus, Hyundai Motor in global operation has been caught using child labor. Use of child labour is not only offence and human right violation but draws serious quality and safety issues. Child can't generate specialized skill. For low cost wage Hyundai compromised safety and quality.
The Hyundai Motor India operation needs very careful operation. Being SEBI listed it has the responsibility to file BRSR ( SEBI ) Reporting after conducting compulsory Third Party Assessment Audit on Human Right Protection. Under SEBI Law Hyundai Motor has to conduct this audit. But business ethics demands that it should must conduct regularly Human Right Audit of HR Practices, even though not mandated under the SEBI law.
Human Right Violation by Hyundai in "adopting the process of abuse" in HR Practice in India:
Like United States, Hyundai has also adopted poor HR Practice in India. One poor HR Practice shall be examined here, where "process of abuse" was invoked by Hyundai Management. This "abuse process" violated completely labour right protection. This was clearly Human Right violation.
Dushyant Janabandhu was appointed as an Assistant Manager in Hyundai plant in Tamil Nadu. Within a year, due to Covid-19 pandemic, he was asked to work from home from 22.03.2020 to 06.01.2021. However, the Hyundai Management called upon Dushyant Janabandhu to resume physical attendance at work place. He failed to report for duty. Management issued disciplinary notice.
Management found prima facie evidence against Dushyant for his purposeful absenteeism. In this way Management charged him for damaging Company’s business and Customer relations. Till filing detail charge sheet and final decision he was also directed to attend office regularly or work from remote, with attendance recorded separately by his Head of the Department.
In the final conclusion of the disciplinary action his employment was terminated. Dushyant Janabandhu, asked to clear his salary during the pendency of disciplinary action through a legal notice. In retaliation, the Hyundai Management demanded from Dushyant Janabandhu a business loss compensation of Rs. 14,02,822/- on the basis of Clause 19 mentioned in the Appointment Letter where it was stipulated that employee is responsible to settle if there arises any business loss. Though this was an after thought illegal operation.
When Management failed to release his salary then Dushyant Janabandhu filed a petition under Section 15(2) of the PW Act before the authority under the PW Act for release of his salary and placed another application in Industrial Tribunal for illegal termination.
Management charged back that employment related dispute should be only settled through Arbitration as provided in the appointment contract letter. Unilaterally Hyundai Management appointed even arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996. However, the arbitrator ceased proceedings, as it was the "Process of Abuse."
The arbitration process was lacking jurisdiction as mentioned on principle decided in the Perkins Eastman Architects DPC & Anr. v. HSCC (India) Ltd.
The HR Department of Hyundai plant failed to apply mind that the dispute was non-arbitrable. As the dispute was covered under the statutory adjudication. Wherever provision of statutory adjudication is given in Labour Law, that provision can't be substituted with the Arbitration and Conciliation Act, 1996. This is an important Principle decided in the Vidya Drolia v. Durga Trading Corporation. The Hon'ble Supreme Court has said:
"The jurisdiction of the Authority under the PW Act and the Industrial Tribunal under the ID Act is to the exclusion of civil courts and is not arbitrable"
This was clearly process of abuse by the Hyundai Management. It was clearly designed to threaten the employee for approaching the statutory authorities under the PW Act and the ID Act. Further, there was is no basis for invoking Clause 19 of the agreement and demanding from Dushyant Janabandhu a compensation of Rs. 14,02,822/- when this was an after thought illegal operation just to stop him from moving the adjudication process.
Conclusion:
1) Clearly there is violation of Human Right of Dushyant Janabandhu. This is poor HR Practice.
2) The HR of Hyundai simply do not know the Labour Law and adopts "process of abuse". This ignorance of law, is harsher for the employee.
3) Hon'ble Supreme Court struck down the arbitration move by the Hyundai.
4) Hon'ble Supreme Court provided to Dushyant Janabandhu a quantified cost for the ignorance of Law.
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