HONDA COMPANY’S

UNREST
A case study analysis
 ABOUT THE CASE
Personnel Policies of HONDA:
 Two fundamental beliefs:

i) Respect for individual differences

ii) Three joys: a) joy of buying b) joy of selling c) joy of
producing high quality products
 Association among employees
 Training
 Performance appraisal for all
 No implementation of Payment of Bonus Act 1961
 More concern for production and least for employees
BEGINNING OF UNREST
Diwali gift incident – November 2004
Management’s rule on workers with an
iron hand
Movement sheet
Very strict in granting leave
No flexibility at all
Threat of termination
Partial attitude so as to prevent unity
VP- A strict HONDA Disciplinarian
 AGITATION OF WORKERS
Charter of more than 50 demands:
•Wages Rs 2500/month;
•20% annual increment in wages
•20% bonus on wage + DA
•70% of wage as Hose Rent allowance
•Travelling allowance
•Demand for Milk, jaggery , union office, leaves, abolition of
overtime, loan etc.
Management’s Reaction
April1 2005: Management offered Rs.3000/- month, condition
workers would not form union.
Workers rejected, Formed a union
Management lobbied with Haryana Govt. and din’t allow their
union to register.
 AGITATION CONTINUED…
Go slow policy by workers
No overtime
Management suspended 4 workers
Refused to absorb trainees
Workers protested; Gheraoed
Suspension of 50 more workers
May 2005; Union Formed due to
intervention of Mr. Gurudas Dasgupta
 INTENSITY OF WORKERS ACTION
•Conciliation Officer: Deputy Labour Commissioner of Gurgaon
•Six conciliation meetings were held; July 2005
•Two HRs from Honda and union leaders attended
•As per DLC, proceedings failed due to uncompromising nature
•Submitted a confidential report to Haryana Government under
section 12(4) of IDA 1947 on July19, 2005

During pendency of conciliation proceedings;

 Tussle continued
 Management hired temporary workers
 Explosive situation and fear of violence, temporary workers
fled.
 Production got affected badly
 VIOLENCE AND AFTERMATH
July 2005; workers from HONDA and other unions
staged a rally
•Violence erupted
•DSP was beaten mercilessly
•Later workers were told to assemble in a
•lawn
•Brutality of Police as a revenge, on sight
agitation
•About 700 injured
AGITATION AT GURGAON

 75 hurt,300 held
 July 25: Management contented that outside
elements were misleading them
July 26: HONDA closed operation for Half a
Day
July 27: Court interference, 61 remained in
jail for more than 2 weeks; released on 11
August.
 ROLE OF THE STATE
On July 30,2005, an agreement arbitrated by Haryana
Chief Minister was arrived
Technically it was a conciliation statement and a case
of arbitration under the IDA.
As per agreement:
Workers would resume duty fro August 1, 2005
They would not raise any demands during the next one year
Trade Union would continue to operate
Terminated employees would be reinstated after they
 had signed an unconditional letter of apology
Workers would get salary for May and June 2005.
Also the ‘principal of no work no pay will be implemented.
Injured workers would get paid leave.
For trainees a detailed test will be conducted
Finally, agreement was considered as final conciliation,
in future both partied will maintain cordial relations.
 IR SCENARIO AFTER VIOLENCE
Union convinced management for
reinstatement of 200 contract workers,
 though management was reluctant earlier.
There was an informal understanding that
union leaders would have the freedom of not
working on shop floor since several IR issues
were pending.
Management allotted a office to union leaders.
Management was much more flexible on
leaves, adjustments of shifts etc.