Ethical Issues in Business - Wistron Infocomm Manufacturing India Pvt Ltd, Narasapura, Kolar, Karnataka

 

About 5,000 contract labourers and another 2,000 unidentified persons vandalised the facility at Narasapura Industrial Area of Kolar district, 51 kilometres from Bengaluru, India’s tech and investment hub on December 12,2020. Police said a clear picture on the extent of losses will emerge only after an assessment by an insurance firm. Most of those working at the Kolar plant are from rural backgrounds, while a few are students who gave up their studies to support their families financially. A few others have completed technicals courses from ITI and other institutes.

Superintendent of PoliceKarthik Reddy confirmed that 160 people had been arrested so far. The arrests were made on the evidence of CCTV footage and after examining the list of workers who were on the premises when the violence broke, the police added.

Taiwan-headquartered Wistron Infocomm Manufacturing India Pvt Ltd filed a complaint saying it had suffered losses worth Rs 437.70 crore in the violence. According to the complaint, filed by Wistron executive Prashanth TD, office equipment, mobile phones, production machinery and related gadgets worth Rs 412.5 crore were lost. Infrastructure worth Rs 10 crore, cars valued at Rs 60 lakh, as well as smartphones and other gadgets worth Rs 1.5 crore were damaged, stolen or lost.

Members of the joint committee of trade unions in Kolar have voiced concern over the turn of events, saying they will help the arrested workers get justice. Shyamana Reddy, a member of the committee, said, “The company has violated many labour laws and the contractual employees were not treated well. We have learned that the company did not pay wages as promised and neither were the workers given overtime allowances.”

“According to the information that we have gathered, there are 1,343 permanent employees and 8,490 contractual workers. The contract labourers are a mix of male and female staff between 18 and 26 years of age. We have received complaints that some female workers were also put on night shift without proper security,”

Speaking on the condition of anonymity, a worker told Indian Express that  the main reason why a section of the workforce erupted in anger was because the contractor, who hired them, did not pay wages as promised for months and did not give allowances for overtime. “After our interviews, they said our shift would be of eight hours and the in-hand salary would be Rs 15,000 (per month) after deductions under Provident Fund and other heads. However, we were paid less than Rs 10,000 and the wages even differed from person to person,” he said.

Prime Minister himself expressed concern over the violence which brought a black mark on Karnataka as an investment friendly state, the government said there was a “technical malfunction” in the system of recording employees’ attendance which resulted in employees putting in four extra hours per day,  ie… 8 hours per day to 12 hours. Wistron hadnot addressed the malfunction in the new systems installed after March 2020.

Wistron had not maintained a robust redressal system to address and rectify complaints raised. “A robust redressal system to address complaints arising out of attendance and overtime wages was not in place

The system also randomly marked employees as on leave despite them turning up for work and the overtime wages were not credited with the salary. The salaries too arrived late, between 10th to 12th in a month, the employees were quoted in the media.

Multiple inspections after December 12 found that the access cards were not functioning properly. When employees asked about the reduction in pay, some of them were told there was a technical glitch and that it would be rectified. This did not happen.

 

“Apple is dedicated to ensuring everyone in our supply chain is treated with dignity and respect. We have teams on the ground …We are also dispatching additional Apple team members and auditors to the facility. Our teams are in close touch with the local authorities and we’re offering our full support to their investigation,” the Apple Incorporation, California, USA  said in a statement.

Wistron, a contract manufacturer for Apple, had started the Narasapura facility in July at a cost of Rs 3,000 crore. While the Narasapura unit has about 2,000 regular employees working on Apple’s phones and the rest are contractual, the old Peenya unit in employs around 3,500 people. Apple also has Foxconn and Pegatron as major contract manufacturers for making of flagship iPhones, iPads and other devices.

Foxconn has a unit at Sriperumbudur, in the outskirts of Chennai, Tamil Nadu. The company has pledged to invest up to Rs 7,000 crore over the next three years to expand the existing unit.

1.      What ethical issues did you see in the given instance from the perspective of HRM functions in an organization

2.      Suggest ways and means to address these issues

3.      What do you comment on the  supply chain management issues impacting Apple Incorporation  out of the incident given

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