Local reports say Apple is liable for underpaid wages at Indian iPhone plant
- Earlier in the week, reports surfaced about a riot causing millions of dollars in damage within one of Apple’s iPhone plants in India.
- It has now become clear that the company failed to implement proper work-hour management and failed to deliver on-time payments for its rapidly growing staff.
- Rioters ransacked offices of senior executives and looted thousands of iPhones and laptops, resulting in $7 million worth of damage and several arrests.
- Under Indian law, Apple has ultimate legal responsibility for the underpaid wages at a Wistron iPhone assembly plant near Bangalore, says a local report.
- “We have placed Wistron on probation and they will not receive any new business from Apple before they complete corrective actions,” Apple recently said in a statement.
Earlier this year, Apple and the Indian Government announced their intentions to greatly expand Apple’s manufacturing presence in the country. At the time, many in the industry praised Apple for what they saw as a long-needed change — with the company finally taking major steps to diversify their manufacturing outside of mainland China. The praise focused particularly on Apple’s moves in India, where heavy foreign import taxes apply to smartphones that have not been produced within the country. However, Apple has recently been facing a major problem that just seems to keep getting worse for everyone involved.
Earlier in the week, reports surfaced about a riot causing millions of dollars in damage within one of Apple’s iPhone plants in India. The plant in question is the Wistron iPhone assembly plant near Bangalore, owned and operated by Wistron Corporation, a Taiwan-based supplier. Over 10,500 people are employed by the plant, where previous reports have shown a recent 50% increase in work hours for employees in October. It has now become clear that the company failed to implement proper work-hour management and failed to deliver on-time payments for its rapidly growing staff. Rioters ransacked offices of senior executives and looted thousands of iPhones and laptops, resulting in $7 million worth of damage and several arrests.
From BBC News:
Contract manufacturer Wistron has confirmed reports that iPhone assembly was suspended following a riot at its plant in Bangalore, India. Video footage shows people attacking assembly units, smashing windows, overturning cars, and starting a fire. Wistron puts the total cost of the damage at $60M. (This was later revised to around $7M.)
BBC News reports that workers say they have been underpaid for four months and that the riot began after a meeting with HR failed to resolve the dispute.
The Taiwanese company has since said in a statement that it has removed the vice president who was overseeing operations in India and that it has started a telephone hotline for workers to voice their concerns anonymously. Wistron, as well as Apple, have confirmed that delayed payments to some employees started in October and November. Apple is now withholding new business until Wistron fixes the problems.
1/4 #Violence at @Apple #iPhone production plant run by Taiwan-based #Wistron Corp at Narasapura near #Bengaluru in India
— Crisbin Joseph Mathew (@CrisbinJoseph) December 12, 2020
Nearly 2,000 employees, alleged not been paid, went on a rampage destroying the company’s furniture, assembly units and even attempted to set fire to vehicles pic.twitter.com/qtlHyJiRAh
An investigation by the Indian government into the riot at an assembly plant has found ‘serious labor law violations,’ with the government noting that the workers had been paid significantly less than had been agreed. Shares of the Taiwanese company slid as much as 4% shortly after the news broke, with the story making international headlines over the weekend.
Who is legally responsible?
Under Indian law, Apple has ultimate legal responsibility for the underpaid wages at a Wistron iPhone assembly plant near Bangalore, says a local report.
From The Economic Times:
“According to the Contract Labour (Regulation and Abolition) Act, 1970, the contractor is responsible for payment of wages and the principal employer is ultimately responsible for it,” said one of them. This implies that the authorities can seek explanations from both Apple and Wistron.
“We have placed Wistron on probation and they will not receive any new business from Apple before they complete corrective actions,” Apple recently said in a statement. “Apple employees, along with independent auditors, will monitor their progress.”
This may cause a slowdown in Apple’s business within the country, which had only just started gaining ground with the launch of its online store and an expanded retail presence.
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