Apple’s contract manufacturer Wistron is now in damage control mode after unrest by workers last week at its plant near Bangalore which earned it a rap from the tech giant.
In a statement, Apple said the supplier has been put on probation and it “will not receive any new business before completing corrective actions.” The tech giant said its preliminary findings indicate that Wistron had violated Apple’s supplier code of conduct by failing to implement proper working hour management processes.
“This led to payment delays for some workers in October and November,” the statement said.
The Taiwan-based company has removed its vice-president, who was in charge of India operations, and admitted that some workers were either not paid correctly, or the payments were delayed.
Wistron said it was working toward ensuring that all its workers were immediately compensated. It had formed teams to address the issue and was making phone calls to each employee to confirm the payment received, the Economic Times reported. The company was also taking steps to ensure that such incidents do not happen again.
They have also set up an employee assistance program and a 24-hour grievance hotline in Kannada, Telugu, Tamil, Hindi and English languages to ensure all workers at the facility can voice any concerns, anonymously.
“Safety and well being of our team members is always our top priority,” Wistron said, as it looks to resume its operations at the earliest.
Earlier, the government of Karnataka state, where the Wistron plant is located, accused the Taiwanese firm of not adhering to labor laws. In its report after a plant inspection, it stated that the plant became operational this year and though it was permitted to have an employee strength of 5,000, it scaled it up to 10,500 without fulfilling many legal requirements.
The report blamed the six staffing firms that had supplied the manpower to Wistron for the salary payment glitches and the government may blacklist them. The government also accused Wistron of introducing 12-hour shifts in October without getting any necessary clearances from the factories department.
Violence broke out at the Wistron factory on December 12 after workers expressed unhappiness over alleged non-payment of salary and overtime wages. Office infrastructure, equipment and vehicles were damaged during the incident.
Wistron had initially in its police complaint pegged damages at 4.37 billion rupees (US$60 million), but media reports suggest it was later revised to about 500 million rupees ($6.79 million).
Prime Minister Narendra Modi had expressed concern over the incident and instructed the state government to take necessary action.
As part of the Indian government’s production-linked incentive scheme to attract large investments in mobile phone manufacturing, Wistron had committed to investing roughly 13 billion rupees ($176.74 million) in smartphone manufacturing over the next five years.