The past few months have been difficult for Apple on the manufacturing side of things. The tech giant has now put two manufacturing partners on probation due to labor law violations.
Wistron, a Taiwanese firm that Apple hires to build its iPhones, is the latest to be put on probation. The decision comes after a protest that occurred on December 12 involving around 2,000 employees. They were reportedly disgruntled about unpaid wages and started a riot at one of Wistron’s offices.
Times of India posted a video on Twitter showing employees smashing the building’s lobby and flipping vehicles.
Employees allege they have not been paid properly. pic.twitter.com/GKbeFeyRKc
— TOI Bengaluru (@TOIBengaluru) December 12, 2020
As a result, Wistron won’t get any new business from Apple until it is able to remedy the situation. That could be a lengthy process—and a costly one for the manufacturer. That being said, reports appear to support the employees’ claims that serious labor violations are taking place in Wistron’s operations.
Reports from both the South China Morning Post and Reuters detailed the reason for the unrest at Wistron’s facilities. The company’s plant in Karnataka, India, employs 10,500 workers. That number rose quickly in a short span of time, leaving Wistron without the resources to successfully manage the influx of new workers. It’s worth noting that the plant was only allowed to operate with 5,000 workers.
A government report reads, “Though 10,500 workers are employed in the factory the HR department has not been adequately set up with personnel of sound knowledge of labor laws.”
Meanwhile, it appears that around 8,500 of those workers were contractors and not full-time employees.
Wistron is currently under investigation for a number of labor violations, including not paying wages to contract workers and forcing certain staff members—mainly women—to work overtime.
In response, the manufacturer issued an apology and moved swiftly to try and right its violations. Wistron says that it is “enhancing its processes and restructuring our teams to ensure these issues cannot happen again.”
BREAKING: iPhone supplier Wistron sacks its India Vice-President, admits to lapses in Karnataka plant. Statement below:
We have been investigating and have found that some workers were not paid correctly, or on time.
We deeply regret this and apologize to all of our workers.
— Chandra R. Srikanth (@chandrarsrikant) December 19, 2020
The firm has reportedly established a grievance hotline as well as an employee assistance program. What those programs offer remains unclear. In the meantime, Wistron also fired its vice president of business in India.
Apple is now conducting its own investigation into the Karnataka factory but has been quiet on the matter. The Big Tech firm hasn’t responded to comment requests from a variety of media outlets at the time of this writing.
What Comes Next for Wistron?
This situation is about as bad as it gets for a company like Wistron. The accusations from employees—as well as the violent unrest—could put its future relationship with Apple in jeopardy.
That being said, this isn’t the first time an Apple partner has been accused of labor violations. In the past, the iPhone maker has seemingly turned a blind eye to the problem. If that trend continues, this probation could be a slap on the wrist for Wistron before things return to business-as-usual.
Or, the company could take a stronger approach and cut Wistron from its lineup of manufacturing partners. That would be a major hit to Apple’s supply chain since the company is responsible for building one of its iPhone models. However, it would be even more painful for Wistron.
The situation remains fluid and will likely continue to evolve in the coming days. It will be an interesting one to monitor as Apple ponders its next move.