Apple supplier Wistron failed to manage scaled iPhone factory: report

The factory of the Apple supplier Wistron in the state of Karnataka could not cope with the rapid increase in staff and violated several laws. A government inspection revealed that violence took place at the site last weekend. Thousands of contract workers in Wistron were upset by the alleged failure to pay wages, destroyed property, factory equipment and iPhones at the plant early December 12, causing the Taiwanese contract manufacturer to lose millions and forcing the plant to close. According to a report from the Karnataka factory division, a copy of which was verified by Reuters, the workforce at this plant, where an iPhone model was assembled and commissioned earlier this year, rose from 5,000 to 10,500 in a short period of time.

“Although the factory employs 10,500 people, the human resources department has not been adequately established with staff with a thorough understanding of labor laws,” the report of the December 13th inspection said. According to the report, there is a large gap between the practices used at the plant and legal requirements. Wistron did not respond to a request for comment. Apple, which carries out its own audit at the factory, also did not comment.

Wistron introduced 12-hour shifts in October over the previous 8-hour shift at the plant, but failed to properly address “the confusion in workers’ minds” about their new wages, including overtime, the report said. The company also did not inform the factory department about the new work shifts, it said. Wistron, which had also changed its attendance system in October, was unable to fix a bug that resulted in employee attendance being incorrectly registered for two months. Some other violations highlighted in the report related to underpayment of wages for contract workers and cleaning staff, and women working overtime without legal authorization.

An earlier state inspection of the factory, just a few hours after the rampage, had already revealed “several violations of labor law,” according to Reuters. Karnataka, home to the Indian silicon city of Bengaluru and global firms like Bosh and Volvo, has previously tried to reassure investors by condemning the violence and pledging its support to Wistron. “The company has launched an internal audit to improve its systems,” said Gaurav Gupta, chief government official in the Karnataka Industry Department.

© Thomson Reuters 2020

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