Home >Companies >News >Wistron staffing firms may be fined, debarred

Six staffing firms that supplied manpower to the riot-hit iPhone factory near Bengaluru may face heavy fines and could be blacklisted for failing to pay wages to the workers, two government officials said.

The officials said the violence at the Wistron factory was not pre-planned. “It was a sudden outburst," one of the two government officials with direct knowledge of the development said, seeking anonymity. “There are around 8,500 temporary workers at the Karnataka factory. The manpower was supplied by five-six staffing firms, and it was their fault to exploit the workers by not paying or defaulting on salary payments."

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The government’s course of action aims to control the damage caused to the country’s reputation as an investment destination and tamp down the growing unrest in industrial hubs as state governments relax laws to allow for longer working hours and fewer worker benefits to draw investments and help companies recover from the pandemic.

While workers should not have indulged in vandalism, the manpower suppliers will face action for violating rules and holding back wage dues, the official said, without naming the companies.

Taiwan’s Wistron has been making iPhones in India since 2017 as the country strives to attract foreign investments in electronics manufacturing. The assembling of iPhones in India by Apple has been one of the government’s big success stories.

“The Union labour ministry is in touch with the state government and is monitoring the situation. The manpower suppliers seem to be at fault. We are evaluating the situation, and appropriate action will be taken," said D.P.S. Negi, chief labour commissioner (central) and senior labour and employment adviser at the ministry.

Negi said any attempt to impact investor sentiment is not acceptable, and neither is any violation of laws and non-payment of wages and overtime to workers.

“We don’t believe violence is helpful to anyone and at the same time, have taken steps so that workers can get their dues soon," Negi added.

The violence seems to have been triggered by the failings of the firms that supply contract workers, said K.R. Shyam Sundar, a labour economist and professor, XLRI.

“This Wistron case is both an industrial relation and human resource crisis. The contract workers’ wages were not cleared, and I don’t think there is a problem of liquidity with the multinational firm, which is manufacturing high-end phones of a reputed mobile brand," Sundar said.

“The authorities—both at the state and Centre—seem to have reached out to the investor, the principal firm. It’s a good move, and now they must also come out to name the wrongdoers, and take action against those who violated laws related to workers’ welfare and wage payments. The communication channel with workers seems to be missing. See—you held up wages, there is violence, loot and loss of property. Had the salary part, more so amid covid, been taken care off, it would not have arisen. There are aspiration and reality mismatches; the employer is suffering, employees are suffering, too, and production has suffered. This should work as a case study to roll out labour reforms by balancing benefit to workers and employers," he added.

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