ECONOMY/ GOVERNANCE/ RIGHTS
Topic: General Studies 2,3:
- Fundamental Rights
- Government policies and interventions for development in various sectors and issues arising out of their design and implementation
Wistron (Apple Supplier) Violence
Context: Worker unrest following the non-redressal of payment and overtime issues at a new factory of Wistron Infocomm Manufacturing India Pvt Ltd, that manufactures iPhones for Apple and other products, resulted in a riot at the plant on December 12.
Production at the plant in Kolar district, Karnataka around 60 km from Bengaluru, employing 1,343 regular workers and 8,490 contract workers, was suspended following the violence.
- Wistron, which makes devices and peripheral systems for major global tech companies, has manufacturing facilities and R&D centres at two dozen locations around the world.
- The company started a small pilot plant in Bengaluru in 2017 to make the iPhone and, in 2018, decided to make a large investment (Rs 3,000 crore) in India for a full-fledged plant.
- The company got environmental clearance in mid-2019 and, in 2020, announced investments to the tune of Rs 1,220 crore in equipment and machinery for the Kolar plant, which is designated as a service and manufacturing centre.
- In August 2020, the plant became fully operational, with around 5,000 employees to manufacture the iPhone SE (2020) and iPhone 7 models.
What factors led to Labour unrest in the facility?
- Rapid Expansion of Contractual Labour: Wistron rapidly scaled up its contractual employee strength from around 3,000 to nearly 8,500 between September 2020 and December 2020.
- The contract employees were hired and paid through six manpower supply contractors, but their work was supervised and managed by Wistron officials
- Overtime Work: The manufacturing facility also moved from eight-hour to 12-hour shifts. workers were working in two compulsory 12-hour shifts. The factory was being operated like a sweatshop.
- Irregular Payment: Initial police investigations have revealed that the contractors were not paying the workers their full wages as per their contracts, or for overtime work. “While wages were slashed from Rs 22,000 to Rs 8,000 in some cases, wages for November were not paid until December 12.
- Labour Rights Compromised: With no employee grievance redressal system in place at the firm or a union, workers were constantly asking company officials for their dues.
- Immediate Trigger for Violence: An official of the labour department said the trigger for the violence during a 6 am shift change on December 12 was an argument over the attendance system not capturing the exact work hours logged by the workers.
- Overblown Damages: Wistron officials initially estimated the damage at Rs 437 crore, but later revised it downward to about Rs 43 crore saying the “violence did not cause any material damage to major manufacturing equipment and warehouses”.
What has been the reaction of Apple?
- Apple has put Wistron on probation, and said the company will get no more orders until it fixes the problems
- Apple employees, along with independent auditors, will monitor their progress.
- Increasingly, following pressure from the consumers’ side and also being highly conscious of its brand image, Apple has provided a ‘Code of Conduct’ to all its suppliers, seeking to monitor and audit compliance of labour standards and safeguards
- Pressured by Apple’s response, Wistron has also been forced to apologise to the workers, remove its Vice-President in charge of India operations, and initiate corrective measures to address workers’ grievances.
What are the Key Takeways of the Incident?
- Voices of Labour subdued in Liberal era: That it took violence for the workers to be ‘seen’ and ‘heard’, and for corrections to be undertaken points to the realities of high-tech manufacturing outsourced through supply chains in the global south that is built on precarities of labour involved in them.
- Wilful Violation of Labour rights: In fact, many of the suppliers subcontracting in the high-end electronics sector including those for Apple, have been involved in wilful violations of labour standards and practices
- Complexities of Contractual Labour: The prevailing norms of work arrangements practised by many industries was through hired labour from multiple subcontractors/third party work supply firms. This process creates ambiguity in identifying the primary employer and thereby, seriously constrains the workers from getting effective redress of their grievances.
- Ensuring Accountability: Until recently, the default response of the brands has been evasion of responsibility by either shifting the onus to the subcontracting firms or keeping things in silent mode. However, Apple’s actions are a step forward in corporate accountability and ethical business operations.
- Traumatic Experience for Workers: Forcing workers to do overtime in harsh conditions without much breaks, and under constant disciplinary monitoring by supervisors are matched by low pay and little or no social security, leading to strain and traumatic experiences, both physical and mental
- Dangers of Student Internship: Another prevalent phenomenon is that of unpaid, forced student internships to fill shortages in labour supply and offset costs; students from vocational educational institutions are compulsorily employed, and subjected to the same exploitative conditions as the workers. Since they are not legally classified as workers, there are no obligations to offer social protections.
In the absence of avenues for workers to channelise their grievances — representative associations and unions — and adequate collective bargaining mechanisms as well as social dialogue, frequent labour unrest including to the extent of violent confrontations, could very well be a daily reality in these high-end manufacturing facilities.
Connecting the dots:
- New Labour Codes: Click here