A government inspection has revealed that the Apple supplier Wistron in Karnataka’s Kolar district breached several laws and could not cope with the rapid scaling of the manpower.
According to a Karnataka factories department report, the manpower at the plant rose to 10,500 workers, which otherwise is permitted 5,000 workers in a short period. “Though 10,500 workers are employed in the factory the HR department has not been adequately set up with personnel of sound knowledge of labour laws,” the report of the inspection said.
The report mentioned that there was a wide gap between legal requirements and the practices that were followed at the plant. The report also noted that Wistron introduced 12-hour shifts from the earlier eight-hour shifts at the plant in October.
However, the company failed to specifically address “the confusion in the minds of the workers” about their new wages inclusive of overtime. This new work shift was not informed to the Factories department.
Wistron admitted that workers were not paid correctly and in some cases, workers were not paid on time. Additionally, there were glitches in the attendance system as well. This resulted in incorrect registration of the employees’ presence.
This also come along the underpayment of wages to contract workers and housekeeping staff and making women staff work overtime without legal authorisation.
Wistron also said that its utmost priority is to fully compensate all the workers and has come up with various channels to address employees concerns.
“Since the unfortunate events at our Narasapura facility we have been investigating and have found that some workers were not paid correctly, or on time. We deeply regret this and apologize to all of our workers,” a statement by Wistron noted.
Owing to the violations and loopholes, Apple Inc said that it would not award Wistron any new business until it addressed the way workers were treated at the plant; and placed the manufacturer on probation.
This move has given rival suppliers Foxconn and Pegatron an unexpected lift. They are aiming to capture a larger share of the iPhone maker’s orders as well as from other companies.
The manufacturer Wistron showed violations of its ‘Supplier Code of Conduct’, the Cupertino, California-based tech giant said in a statement.
Apple said Wistron had failed to implement proper working hour management processes, which “led to payment delays for some workers in October and November”, and that it would monitor Wistron’s progress on corrective action. “Our main objective is to make sure all the workers are treated with dignity and respect, and fully compensated promptly,” Apple said.
“This is a new facility and we recognise that we made mistakes as we expanded,” Wistron said in a statement. “Some of the processes we put in place to manage labour agencies and payments need to be strengthened and upgraded.”
The manufacturer acknowledged the situation and removed its Vice-President who was overseeing the business in India and initiated a restructuring exercise.
“We expect it will bring up solutions to improve relationships with workers and pave the way for starting operations soon,” said Gaurav Gupta, the top government official at Karnataka’s Industries Department.