Apple places Wistron ‘on probation’, says no new business for supplier

iPhone-maker Apple Inc has said the Taiwan-based Wistron Corp will not receive any new business from the company and has put it on probation after the latter admitted that some workers at its plant in Karnataka were not paid correctly.

Wistron, on its part, has removed Vincent Lee, Vice-President (innovation business group) of Wistron Infocomm Manufacturing India, from the post.

Last Saturday, Wistron Corp’s manufacturing plant, located 60 km from Bangalore, was vandalised allegedly by its workers who claimed that they were not paid as per the agreed salary. Wistron had earlier put the value of the damage caused to the plant at about ₹437 crore, but later revised it downwards to ₹50 crore.

A statement fom Apple said: “We have placed Wistron on probation and they will not receive any new business from Apple before they complete corrective actions. Apple employees, along with independent auditors, will monitor their progress. Our main objective is to make sure all the workers are treated with dignity and respect, and fully compensated promptly.”

While admitting that some workers at its plant were not paid correctly, it said it has apologised to them. It said its investigation of the event revealed that some workers were not paid correctly, or on time. “We deeply regret this and apologise to all of our workers,” the company said.

“Apple employees and independent auditors hired by Apple have been working around the clock to investigate the issues which occurred at Wistron’s Narasapura facility. While these investigations are ongoing, our preliminary findings indicate violations of our 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.

As always, our focus is on making sure everyone in our supply chain is protected and treated with dignity and respect. We are very disappointed and taking immediate steps to address these issues. Wistron has taken disciplinary action and is restructuring its recruitment and payroll teams in Narasapura. It also set up an employee assistance programme and a 24-hour grievance hotline in Kannada, Telugu, Tamil, Hindi, and English to ensure all workers at the facility can voice any concerns, anonymously.

Meanwhile, Wistron Corp said: “the safety and wellbeing of our team members is always our top priority and a core value for everyone at Wistron. Since the unfortunate events at our Narasapura facility we have been investigating and have found that some workers were not paid correctly, or on time. We deeply regret this and apologise to all of our workers,” the statement said.

“This is a new facility and we recognise that we made mistakes as we expanded. Some of the processes we put in place to manage labour agencies and payments need to be strengthened and upgraded. We are taking immediate action to correct this, including disciplinary action. We are removing the Vice-President who oversees our business in India. We are also enhancing our processes and restructuring our teams to ensure these issues cannot happen again.

“Our top priority is to ensure all workers are fully compensated immediately and we are working hard to achieve that. We have established an employee assistance program for workers at the facility. We also set up a 24-hour grievance hotline in Kannada, Telugu, Tamil, Hindi and English to ensure all workers can voice any concerns they may have anonymously. We are deeply committed to our business and employees in India. We are working diligently on corrective actions to ensure this does not happen again."

BusinessLine had earlier reported that the Karnataka government’s Department of Factories, Boilers, Industrial Safety & Health in its preliminary report, allegedly found violations of labour laws at the Wistron Corp factory.

The report reportedly says that 10,500 workers are employed in the factory but the HR department has not been adequately set up with personnel of sound knowledge of labour laws. It has also said the repercussions of changing the working hours from 8 to 12 hours has not been assessed.