New Delhi: Mobile handset manufacturer Nokia has come in for adverse notice, with an independent research report saying employees at its manufacturing plant in Chennai are being paid low salaries, a contention rejected by the Finnish major.
The observation is part of the report prepared by ‘Finnwatch’, which is aimed at understanding unionization and precarious employment conditions in the mobile phone factories of Nokia, Salcomp, Flextronics and Foxconn in Sriperumbudur, near Chennai.
“In sum, most workers of the studied companies were employed in precarious positions and earn very low salaries even in the Indian context,” the report said.
Finnwatch - which looks at Finnish companies operating in developing nations - along with Bangalore-based non-government organization (NGO) Cividep-India and Dutch group Centre for Research on Multinational Corporations (SOMO) have published the report.
The conclusions are based, among other things, on interviews of over 100 workers from these four companies during the February-May, 2011, period. Furthermore, Finnwatch and Cividep researchers had visited the factories in March, 2011, to interview company representatives.
When contacted, a Nokia spokesperson said, “There are a couple of conclusions in the report we disagree with.”
“As Finnwatch states, Nokia pays the highest salaries in the Chennai area for employees, including trainees. These salaries are well beyond the local minimum wage. We believe the Finnwatch report uses salaries in New Delhi as a benchmark, which is misleading,” the spokesperson noted.
According to Nokia, in addition to financial compensation, employees get free transportation to work, occupational healthcare services and catering.
“We also have day care services in our factory for employees with small children. We believe that we are able to offer very competitive benefits to our employees in the region,” the spokesperson said.
Noting that unions have been able to negotiate with Nokia and Foxconn to get higher salaries for workers, the report said it is not clear whether the unions have had any impact on other working conditions so far.
“Despite some progress, worker unrest has been on the rise in the mobile phone industry in India and this seems likely to continue,” it said.
The Finnwatch report says Nokia appears to be the most responsible and responsive to worker demands among the four studied companies.
”Nokia has become a wage leader (in the case of permanent workers) in the mobile phone industry in the Chennai area and is the first company that has recognized a labor union. But almost half of the workers working at Nokia’s factory are contract workers and trainees, in other words in precarious employment,” Finnwatch said.
Meanwhile, Nokia has also pointed out that its sub-contractors and external labor force companies pay above the minimum requirement. “This is actually something that Nokia requires from its sub-contractors and we also check this regularly in our sub-contractor and partner audits,” the firm noted.
According to the report, Nokia’s Sriperumbudur factory is its largest in the world, employing over 11,300 workers.
Salcomp, on the other hand, has 4,000 workers, makes chargers at its plant, while Flextronics’ factory has about 1,700 employees, who also mainly produces chargers.
“Foxconn has two locations in Sriperumbudur with the main one in the Nokia Telecom SEZ, both employing nearly 6,000 people in total. Foxconn produces the casing for Nokia mobile phones,” it added.