This can upset India’s plans to woo firms away from China
The issue of what it says about labour relations in India apart, a tweet (https://bit.ly/3mp1li6) by the chief reporter of Global Times – a Chinese Communist Party newspaper – suggests the workers riot at the Wistron facility making i-Phones in Karnataka has the potential to derail India’s plans to woo firms to relocate from China. Tweeting on the attack, Chen Qingqing said the event was “a potential risk when manufacturers (moved) their production lines out of China” where they had “most stable labor market … does Terry Gou from #Foxconn regret moving those #iPhone lines to #India”.
This underscores how important it is for both the central and state governments as well as Apple to investigate the matter fully and take immediate corrective action to ensure the riot is not replicated anywhere else in the country, whether at Apple or other facilities.
On the face of it, the riot – Wistron puts the losses due to workers attacking parts of the factory at Rs 26-52 crore – took place due to unpaid dues and poor working conditions; some news reports on the incident talk of a six-day week with 12-hour days and one 30-minute and three 10-minute breaks. Since workers on Wistron’s rolls worked eight-hour shift six days a week while those on the rolls of contractors worked 12-hour shifts – with the breaks, a meal and two snacks – but for four days a week, a clear lesson for Apple is to examine whether the working hours make sense.
Also, while Apple may pay Wistron on time and the latter may pay its contractors as per schedule, Apple needs to ensure the workers are getting a fair deal from the contractors its vendors use; this is probably why, after an HR general manager of Maruti Suzuki was burnt during worker violence in 2012, the firm started hiring more workers on its own rolls rather than using those on the rolls of contractors.
The central and state governments, for their part, need to see why existing labour laws and the machinery – which includes labour inspectors – failed to detect the issue. If working conditions were as poor as the riot suggests, surely the workers would have made representations on this as well as given notices to strike that the local administration would be aware of?
If this happened, why did the state machinery fail to act on it? It is, of course, odd that matters reached the levels they did since the real expansion in Wistron’s work force took place just over the last few months after the government notified the PLI scheme of manufacturing incentives for mobile phones. Since the purpose behind the central government amending labour laws recently to allow fixed-term contracts was to encourage firms to hire workers on their rolls instead of using contractors – whose operations are difficult to supervise – this would suggest the laws have had little impact. If there are still lacunae that makes firms prefer contractors, this means the labour law reforms haven’t really worked and the Centre needs to find ways to fix this; this is in the interests of the trade unions as well since more jobs are better for their members.
Till now, though the number of days lost due to worker unrest has reduced – from four million in 2015 to one million in 2019 according to the labour ministry’s latest annual report – India had a reputation for labour laws that were anti-industry; the Wistron episode suggests India has labour laws that allow workers to be exploited. Neither reputation is desirable for a country that is hoping to significantly increase its manufacturing capacity so as to provide more jobs for its citizens.