BENGALURU: Tech giant, Apple said that it has put its key contract manufacturer, Wistron on probation, stopping further business with the iPhone supplier after a preliminary investigation found that there were payment delays to workers during October and November months and its supplier code violations.
Wistron admitted to lapses at its Narasapura iPhone factory in Bengaluru outskirts which resulted in reduced/delayed payments of salary for some of its workers at the facility. Wistron has also sacked its Vice President, India, Vincent Lee and said that disciplinary action will be taken against the erring officials.
On Thursday, The New Indian Express reported that Apple might temporarily suspend its contract with Wistron over company policies on employment and wages. Apple had last month put another contract supplier, Pegatron in China, on probation after investigations found that there were violations with the engagement of students workers.
“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," the tech giant said in a statement.
"As always, our focus is to make sure everyone in our supply chain is protected and treated with dignity and respect.We are very disappointed and are taking immediate steps to address these issues. We have placed Wistron on probation and they wont receive new biz from Apple before they complete corrective actions. Apple employees, auditors, will monitor their progress,” the statement read.
Apple had sent independent auditors to investigate the incident in which thousands of workers staged violent protests at the Wistron facility in Bengaluru alleging non-payment of dues.
The development comes as a big setback to $250 million investment expansion plans of Wistron under the Production linked incentive scheme announced by Narendra Modi government to shift the manufacturing bases of mobile phones and electronics components from China to India.
Wistron said, "This is a new facility and we recognize that we made mistakes as we expanded. Some of the processes we put in place to manage labor agencies and payments need to be strengthened and upgraded. We are taking disciplinary action and steps to correct this. We are removing the Vice President who oversees our business in India."
“Our top priority is to ensure all workers are fully compensated immediately,” the Taiwanese electronics manufacturer added.
Meanwhile, sources said that the Karnataka government, in a written communication to the centre, had blamed Wistron for not being able to pay workers especially for the stretched working hours due to a faulty attendance software which showed discrepancies resulting in lesser salary payment. The letter to union labour ministry also pointed out that the employees were marked absent on some days when they attended work and that the payments didn’t happen in time.