Apple puts contract-manufacturer Wistron on probation after Karnataka plant violence

Highlights

• Wistron is now on probation and will not receive further orders until it convinces Apple that it has addressed worker’s issues at its Karnataka plant
• An investigation revealed several discrepancies in the salaries received by workers
• Wistron also broke several labour laws by hiring more employees than permitted

Following employee unrest at its Narasapura facility, Apple has put the contract-manufacturer in question, Wistron, on probation. According to a report by Reuters, the Cupertino-based company has withdrawn all future orders until the employee issues are addressed. An investigation by the Karnataka government found several irregularities in the company’s finances. Wistron has since acknowledged the problems and fired its India Vice-President. Some further digging has revealed that Wistron broke several laws by hiring 5,500 more workers than permitted. As a consequence, several workers did not get paid in October and November. Wistron will receive no further orders from Apple until a thorough investigation has been conducted.

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Other transgressions include making female staff working overtime without authorisation, underpaid contract workers, improper working hour policies, and poor attendance recording systems. Earlier reports said that Wistron made some contract employees work twelve-hour days. It was fairly common for workers to see a Rs 4,000-5,000 discrepancy in their monthly salaries. However, many details about the matter remain sketchy, as it is still under investigation.

Wistron has taken several punitive measures to address workers’ issues. For starters, there is a 24-hour hotline where workers can anonymously report any wage-related woes. Government agencies, Apple, Wistron, and independent auditors are working together to get to the problem’s root cause. The plant is unlikely to resume production until Wistron convinces Apple that it has addressed the aforementioned issues.

Incidences such as this one set a bad precedent for companies like Apple, which has pledged Rs 13 billion towards ramping up production in India. This also halts Wistron’s future expansion plans that involved manufacturing two iPhone models at the location by ramping up its workforce to 20,000 people.

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