Posted by Dr. ARUDOU, Debito on July 21st, 2009
The following has been written by Roy Choudhury (email@example.com).
No statement here necessarily reflects the views or standpoints of Debito.org or of the webmaster, Arudou Debito. Mr Choudhury assumes full responsibility for all contents, and any possible errors and inaccuracies within the essay are his own. For questions, enquiries, and responses, I encourage readers and concerned parties to contact the author directly, as per the contact details below. DISCLAIMER ENDS
Updates (July 27, 2009):
I am willing to share all evidence I have with members of the press should they express interest in covering the story.
In addition, Mr. Louis Carlet of the Nambu Foreign Workers Caucus, a labor union, is willing to talk to the press on my behalf on key parts of my case that I have reported to him. The number for the NUFC is: 03-3434-0669.
July 25, 2009: Daniel Rea, editor of the Japan Times Herald, has investigated my story and covered it in a piece titled ‘More Troubles for Ernst and Young Japan’. He also found another ex-employee of EY-Japan with a disturbing story. You can read it at http://japantherald.blogspot.com/
Mr. Rea also says the following (taken from response no. 14 at the end):
“I received photocopies and a SD recording of Roy and EYJ conversations. Also the same from another empoloyee from India. Everything he alleged is 100% factual. Just wanted you to know Roy and another EYJ employee were treated extremely unfairly. EYJ violates their Code of International Conduct on a routine basis it seems.
I’ve written up the following piece with the intention of drawing media interest to this matter. My goal is to hold the accounting firm Ernst & Young ShinNihon LLC to account for its actions.
— Roy Choudhury (firstname.lastname@example.org)
Ernst & Young’s Shame: Racism institutionalizes itself in the
Japanese wing of the accounting giant
By Roy Choudhury
Exclusive to Debito.org July 21, 2009, freely forwardable
Accounting can do wonders, but just where in the free world do you find an audit firm whose Global Code of Conduct shuns discrimination, but whose lead partner confirms that non-Japanese nationals are barred from getting permanent contracts? And whose department head admits to taking “language differences” into account – even for a job that needs no Japanese? Ernst & Young ShinNihon LLC (or EY-Japan), the country’s largest accounting firm, has got some explaining to do.
I worked for EY-Japan for two years (2006 – 2008) and have firsthand knowledge of how they treat people. As a US citizen, I can tell you I have never seen anything like it. They happen to be institutionally racist. And I can prove it.
Three partners told me of a rule that barred foreigners from getting permanent contracts at EY-Japan (two now deny it, but I have the other recalling it on tape). This is despite the fact that the firm promised to uphold the Ernst & Young code of conduct which has zero tolerance for any form of discrimination. The Code reads:
“We embrace multicultural experience and diversity as strengths of our global organization. As such, we respect one another and strive for an inclusive environment free from discrimination, intimidation and harassment.”
Yet when I challenged them on being institutionally racist, the head of the International Department denied the rule’s existence (on tape too), but admitted to taking “language differences” into account when hiring me (this is in the firm’s letter to me dated February 17, 2009).
But this was for a position that required no Japanese whatsoever (I was an English proofreader). And if they take language differences into account for jobs that need no Japanese, then when do they not do so? Probably only when the person applying is Japanese, right? That’s very racist.
Their attitude may have even led them to defy the law. Article 106 of Japan’s Labor Standards Law requires companies to make their rules of employment known to all employees, irrespective of nationality or language. But EY-Japan doesn’t always do this, partly because of language problems.
The firm has been in existence since 2000. It says it can conduct quality audits of English financial statements, and issue English audit reports. It has no shortage of resources. You’d think they would have fixed any problems with language differences by now, if they wanted to. Sadly, it has become a self-fulfilling prophecy.
On retirement benefits, for example, partners were insisting in English that I wasn’t entitled to them (you can read it in their letter to me) – even though they had been deducting pension contributions from my paychecks. The explanation left me thinking that they were taking me for a ride.
What they should have said was that I would be entitled to a state pension (nenkin), but I would not be getting severance benefits from the company (taishokukin). But I only figured out what they truly meant in June 2009 – 3 years after my start date with the Firm – after investing in a Japanese lawyer who kindly went over the contents of their letter.
They may have no idea of what they’ve gotten themselves into. The Code tells them they can’t be discriminated against. So they toil away convinced their careers in the firm are performance-based – unaware of the truth.
The Damage to Clients
If the firm officially views language differences as a risk factor when hiring (because, according to their letter, it might end up resulting in misunderstanding), it presumably also views multicultural work environments as dangerous to audit?
I’m not 100% sure on this (because they refuse to take any more questions from me), but they could view a client with an accounting team consisting of Americans and Japanese as dangerous because of the mere possibility that they might be having misunderstandings, right? And they could see a client committed to a policy of promoting multiculturalism, who doesn’t proactively employ safeguards to protect itself from language differences, as illogical, yes?
But that means billing the client more to compensate for the increased audit risk – purely because the client embraced diversity. That’s unheard of in modern day accounting. But it could be very real to EY-Japan.
This leaves the folk at 5 Times Square with egg on their faces. Their US counterpart doesn’t tolerate racism. They were one of the first firms to hire people on merit when the anti-racist movement was taking shape. Imagine the collective jaw drop on hearing that a fellow firm was employing a racy rule and language differences (the existence of which can often be determined by skin color in Japan) to target non-Japanese nationals, despite guaranteeing a discrimination-free work environment.
The crux is that partners with the wrong vision seized power in an accounting group committed to doing good. And rather than Ernst & Young standing for a higher ideal and taking the high road, and instead of them shaping the partners with their wisdom and goodness, these partners have succeeded in turning tables on the Group and are redefining Ernst & Young in their image.
Part 2: An insight into their mindset
This part is dedicated to unveiling the darker side of the firm’s character through examples of unethical and extraordinary behavior. Their actions might have passed as OK if it were a regular company. But accounting is a respected profession, and the people in it are assumed to be impartial and bound by the truth. Loyalty must be to the Code, not to themselves.
With a slogan like doing the right thing, you’d have thought they were ethical and rational. In this they disappoint. Judge for yourself:
A gagging attempt
They knew I was unhappy with how they treated me before I left EY-Japan (their letter indicates this). In July 2008, they tried to muzzle me and put me under fierce pressure to sign a confidentiality agreement that defined confidential information in part as “all the information made available to me from your firm” (I still have the document and can prove all of it).
In other words, I would never have been able to tell you what I’m telling you now if I had signed it.
Unilateral changing of employment terms – one week before joining
In my second job interview held in April 2006, a partner offered me a job and promised me a specific salary and “all of the benefits of a full-time worker”. I took him at his word and assumed “all of the benefits” to mean all of the benefits. And because one of the standard benefits of full-time employees in Japan is lifelong job security, I believed he was offering me a permanent contract.
But just one week before my start – and seven weeks after the interview – EY-Japan inexplicably sent me an employment contract for only two years (the dates are confirmed in their letter to me).
That put me in a bind. I had a permanent contract with the company I was working for, but I had told them weeks in advance that I had found another job. I had terminated my job hunt with other companies too. They were changing my employment terms unilaterally. That left me with few options. I ended up signing the contract and worked for EY-Japan until August 2008.
(Note: As I did not tape record the interview, I cannot prove that I was promised “all of the benefits of a full-time worker”. You either believe me on this one or you don’t. But the matter is critically important because their response to it (covered in the next section) is extraordinary).
A few fast ones
I officially challenged EY-Japan in December 2008 and wrote four letters to them. They eventually responded with a letter of their own on February 17, 2009. Some of the arguments they deploy in the letter are extraordinary because they are based on insistence, and on opinions.
For an accountant to twist the truth for personal gain means undermining everything the profession stands for. Arthur Anderson and Misuzu – if they were still around today – would testify to this. To call oneself an accountant while resorting to arguments not supported by the facts is oxymoronic. That’s the worst thing you could ever say to an accountant (it means you shouldn’t be in the profession).
So the question becomes: do you think EY-Japan is being oxymoronic? Are they misleading people with their arguments? Judge for yourself:
a) They conclude they never represented offering me a permanent contract at interview in April 2006.
They state that the partner who hired me has no recollection of promising me “all of the benefits of a full-time worker”, and it’s illogical for the partner to ever say such a thing. Therefore, they conclude that no such promise was ever made.
But that partner is on tape saying he doesn’t remember. And their conclusion is based on the inability of the partner to confirm or deny promising me “all of the benefits of a full-time worker”. This reasoning is overzealous.
Moreover, a lead partner is on tape blowing a hole in the firm’s defense. He reveals that EY-Japan can never prove that it didn’t offer me a permanent contract in the 2006 interview, raising questions about the firm’s conclusion. Is the Head of the International Department, who prepared the February 2009 letter, using power to arrive at conclusions his colleagues don’t consent to? Is he being oxymoronic?
b) They insist that it is inconsistent for me to state that I had no option but to sign the 2006 employment contract and join EY-Japan, since I did not express dissatisfaction with the employment terms when I signed the contract.
This is a very old line of argument, commonly employed by bullies. Want something that’s not yours? First, change the terms unilaterally. Next flex muscles to deter the opposition. Assume silence to mean satisfaction. And double tag the victim with anger and disbelief if he complains.
The problem is that the partners who handled my hiring are some of the hardest men around in accounting. They think there is nothing wrong with telling an employee that he is getting a two-year contract just one week before the start date – that’s more than six weeks after I had told my employer at the time, the one I had a permanent contract with, that I had found another job based on the results of the second interview. (The dates of the second interview and the letter of employment are clearly stated in their letter. I can prove this.)
In addition, EY-Japan admits it was proactively taking language differences into account (for a job that needed no Japanese), and they could also have rescinded the offer at any time if I had challenged them. They also defied the Code by having a rule about foreigners, and, therefore, made racism an integral part of the firm’s character. Isn’t this being oxymoronic?
c) They refuse to respond to any further questions from me
So we will never know if the partner, who is on tape recalling that he twice told me of the Firm’s rule of barring non-Japanese nationals from getting permanent contracts, was telling the truth?
And since this recollection was made right in front of the Head of the International Department who denies the rule’s existence (this is on tape too), we will also never know why the Head refuses to reconcile this discrepancy?
They are intentionally leaving the matter in limbo when EY-Japan stands accused of racism and deceit. But why?
A request to the reader
If the above convinces you that partners with the wrong agenda have seized the reigns of power in EY-Japan and are beginning to redefine the Group in their image, and if you think putting a stop to it would be a good idea, then pass the message along. Get others to talk about it. Let’s get the press involved if we can. Because someone must hold them to account.
Part 3: Timeline of key events
My second interview at EY-Japan (or EYJ):
April 10, 2006
Start date at EYJ:
June 1, 2006
Last date of employment at EYJ (I left voluntarily):
August 22, 2008:
Formally challenged EYJ:
December 10, 2008
EYJ responds to my challenge in a letter given to me in a meeting which I taped openly:
February 17, 2009
Between February and June 2009, I investigated EYJ further, consulted several parties, did some soul-searching
Around late June / early July 2009, I finally decided to take all matters public. My goal is to hold them to account for their actions, and get things changed.