In the aftermath of the recent vandalism by employees in the Wistron’s Apple iPhone plant near Bengaluru in Karnataka, six staffing firms that supplied labour to the factory may be blacklisted for failing to pay wages to the workers. The protests by workers over non-payment of salaries had taken a violent last week, who had vandalised the factory, damaging factory equipment and vehicles. Now it has emerged that the workers who were not paid salaries are temporary workers hired by Wistron from several manpower companies, and those companies are responsible for payment of salaries to those employees. Wistron is also accused of not having a proper HR system.
According to a preliminary report of the State government’s Department of Factories, Boilers, Industrial Safety & Health, there were violations of labour laws at the Wistron Factory. As per reports, the preliminary report claims that 10,500 workers were employed at the factory but no adequate HR department was set up with members having sound of knowledge of labour laws. The working hours were reportedly increased from 8 to 12 without assessing the repercussions.
According to a Mint report, government officials have said that the violence at the factory was not pre-planned and it was a sudden outburst. “There are around 8,500 temporary workers at the Karnataka factory. The manpower was supplied by five-six staffing firms, and it was their fault to exploit the workers by not paying or defaulting on salary payments”, the reports quoted a government official.
Chief Labour Commissioner (Central) and Senior Labour and Employment Advisor, DPC Negi informed that the Union Labour Ministry is monitoring the situation. “The Union Labour Ministry is in touch with the State government and is monitoring the situation. The manpower suppliers seem to be at fault. We are evaluating the situation, and appropriate action will be taken”, said Negi. He expressed equal concern about the investor sentiment and the violation of laws and non-payment of wages and overtime to workers. Condemning violence, Negi said that the government has taken steps so that workers can get their dues on time.
Now, heavy penalty could be imposed on the staffing firms, and they may even be blacklisted. “The manpower suppliers will face action for violating rules and holding back wage dues”, the official said, without naming the companies.
The panel inquiring the incident said that the HR personnel did not address the workers’ concern regarding their wages and work hours inclusive of overtime. The overtime hours and the wages in respect of 12-hour shift were not explained to the workers. Besides, a fault in the attendance system to mark the attendance of the workers had also not been addressed despite having continued for the past two months. The practices in place regarding the payment of wages and overtime work were reportedly not in compliance with laws.
The Central government has asked the Karnataka government to complete the inquiry into the incident.
K.R. Shyam Sundar, a labour economist and professor at XLRI said that the violence by the aggrieved workers seems to be the result of failings of the staffing firms. He said that there should not be a liquidity issue as the firm is making high end phones. He said that the Wistron case is both an industrial relation and human resource crisis.
Attack by a mob of thousands on the factory
On December 12, hundreds of factory workers wreaked havoc on the factory damaging the facilities’ equipment and vehicles at the Narasupara situated factory of Wistron Infocomm India Pvt Ltd. Wistron, which is Taiwanese design manufacturer, has been making iPhones in India since 2017. In an FIR filed by Wistron against 7000 people including its 5000 contract workers, the company claimed that it suffered losses worth Rs 437 crore. However, it later revised the losses to Rs 50 crore. According to reports, thousands of iPhones were also looted from the factory during the vandalism.
The incident happened at a time when India is trying to attract investments from big companies across the world. Karnataka Chief Minister BS Yediyurappa said that Prime Minister Modi has expressed concern over the incident. Yediyurappa condemned the incident and that it was a very important company.