Apple itself may share liability with Wistron for worker riots

Posted:
in General Discussion edited December 2020
Not only will Apple likely be forced to share results of its investigations on what caused the riots at Wistron, but it may also be held at least partially liable for the damages and labor violations, according to India law.

An image from a video showing the violence at the Wistron facility.
An image from a video showing the violence at the Wistron facility.


Following the worker riots at the Wistron plant in Narasapura, India, state government authorities are expected to ask Apple to supply details from its investigations. Under Indian law, Apple is a contractor that is ultimately the employer, and so the government can call for explanations from both Apple and Wistron.

According to The Economic Times, unnamed sources say the Karnataka state government could make Apple a party to its inquiry.

"Apple could be asked to share details of its investigation with the labour authorities/court," a source told the publication.

Separately, The Economic Times reports that legal experts say the authorities can hold Apple as accountable as Wistron. "According to the Contract Labor (Regulation and Abolition) Act, 1970," said a legal source, "the contractor is responsible for payment of wages and the principle employer is ultimately responsible for it."

The Karnataka state government has not commented on whether it will hold Apple accountable, but it has issued a report saying Wistron exploited its workers. Apple has placed Wistron "on probation," which means it will not receive new orders.

That's a significant blow to Wistron because it means the company is likely to fall short in the level of production needed to qualify it for government incentives.

The Economic Times sources say that Wistron might still have been eligible for these incentives, if Apple had not taken action.

"The epidemic and vandalism at the Wistron unit could have qualified for the [incentives'] force majeure clause," said a source. "The fact that Apple has suspended further orders doesn't qualify as a reason for relaxation under the PLI scheme, hence it might not be possible for the government to consider a relaxation for the iPhone manufacturer."

The government and Apple's investigations concern the riot on the night of December 11 at the Wistron plant in Narasapura, India. It was prompted by claims that workers were not being paid what they had allegedly been promised by the iPhone assembly company.

Reportedly, some 2,000 staff are said to have caused destruction to property, and set fire to vehicles on site. Initially, it was claimed that $56 million in damages was done, but later Wistron revised the figures down to between $3.5 million and $7 million.

Apple stopped production at the plant and began its own investigation. "We have teams on the ground," said Apple. "[We] have immediately launched a detailed investigation at Wistron's Narasapura facility."
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Comments

  • Reply 1 of 27
    Ah, India. Apple throws you a bone - and you mess it up. Ridiculous laws like this will severely limit its ability to compete.  No foreign company should have to babysit your companies. 
    viclauyyc
  • Reply 2 of 27
    I for one am glad that India holds companies responsible so there is accountability all of the way up the supply chain because that is a guaranteed way to make and keep everyone playing by the rules. In the US major corporations can pawn stuff off to subcontractors who then subcontract out again which means the major corporation has no liability but knows full well what is going on.
    Oferglennh
  • Reply 3 of 27
    This story is confusing.  Will the actual rioters be held accountable for, you know, rioting?  Surely Indian law doesn't say "if your employer screws you over, bring 1,999 of your friends and trash the place."  Also since when is Apple the "contractor"?  Or is this term like "bi-weekly" where it means to completely different things?

    At the end of the day, I'm confident that this (the government inquiry part, not the losing production for months) won't be more than a paperwork hassle for Apple.  Apple will bring forth a raft of documentation showing that they did everything they could to hold Wistron accountable.  I find it impossible to believe that Tim Cook and his senior executives are hypocrites on this particular issue.
    techconcdanhrazorpit
  • Reply 4 of 27
    This story is confusing.  Will the actual rioters be held accountable for, you know, rioting?  Surely Indian law doesn't say "if your employer screws you over, bring 1,999 of your friends and trash the place."  Also since when is Apple the "contractor"?  Or is this term like "bi-weekly" where it means to completely different things?

    At the end of the day, I'm confident that this (the government inquiry part, not the losing production for months) won't be more than a paperwork hassle for Apple.  Apple will bring forth a raft of documentation showing that they did everything they could to hold Wistron accountable.  I find it impossible to believe that Tim Cook and his senior executives are hypocrites on this particular issue.
    India... the great “democracy” where mobs rule.
    razorpit
  • Reply 5 of 27
    This situation is confusing, but always remember that India is an island of democracy, freedom and human rights in a continent bereft of the same. India is on the front lines of the war with totalitarianism and still standing. They are far from perfect, but kudos to India for these things.
    drdavidOfer
  • Reply 6 of 27
    radarthekatradarthekat Posts: 3,509moderator
    If Wistron doesn’t fully indemnify Apple on this incident, should Apple be required to cover some of the damages, you can be sure Apple will revisit this in future contract negotiations.  This is between Wistron and those who rioted; that’s where the liabilities and expenses should ultimately fall, whether directly or indirectly.
    edited December 2020 PetrolDave
  • Reply 7 of 27
    gatorguygatorguy Posts: 23,393member
    If Wistron doesn’t fully indemnify Apple on this incident, should Apple be required to cover some of the damages, you can be sure Apple will revisit this in future contract negotiations.  This is between Wistron and those who rioted; that’s where the liabilities and expenses should ultimately fall, whether directly or indirectly.
    IMHO there's very little that happens on iPhone assembly lines that Apple is not at least somewhat aware of. I think I remember reading that Apple keeps in-plant compliance monitors on duty at all times? Supposedly that's how the Pegatron labor violations in China were discovered. At least that's what they claimed.
    edited December 2020 Oferchemengin1GeorgeBMac
  • Reply 8 of 27
    MplsPMplsP Posts: 3,659member
    Ah, India. Apple throws you a bone - and you mess it up. Ridiculous laws like this will severely limit its ability to compete.  No foreign company should have to babysit your companies. 
    Wistron is actually a Chinese company. 

    Beyond that, the Indian law is at least in principle good in that it prevents companies from hiding behind ‘independent contractors’ to do their dirty work. If a contractor’s actions are outside of a company’s knowledge and control then the law becomes problematic, but often such laws push companies to do more to ensure things don’t happen without their knowledge. 

    If Wistron doesn’t fully indemnify Apple on this incident, should Apple be required to cover some of the damages, you can be sure Apple will revisit this in future contract negotiations.  This is between Wistron and those who rioted; that’s where the liabilities and expenses should ultimately fall, whether directly or indirectly.
    I would assume that Apple would have made that part of the contract, assuming it’s allowed under Indian law. 
    Ofer
  • Reply 9 of 27
    gatorguygatorguy Posts: 23,393member
    MplsP said:
    Ah, India. Apple throws you a bone - and you mess it up. Ridiculous laws like this will severely limit its ability to compete.  No foreign company should have to babysit your companies. 
    Wistron is actually a Chinese company. 

    Beyond that, the Indian law is at least in principle good in that it prevents companies from hiding behind ‘independent contractors’ to do their dirty work. If a contractor’s actions are outside of a company’s knowledge and control then the law becomes problematic, but often such laws push companies to do more to ensure things don’t happen without their knowledge.  
    So plausible deniability? Heck, I'll occasionally use outside contractors in my own business for "certain reasons".
  • Reply 10 of 27
    Apple has said it uses labour in other countries because there isn't enough labour in America, but that doesn't explain why Apple doesn't own the company that hires the locals to do the labour in other countries. Unless a valid reason is offered, I'm calling it plausible deniability.
  • Reply 11 of 27
    While I believe large companies have some responsibility into auditing their contractors for compliance, etc. I don't agree with laws that hold a company responsible for the actions of another.  That literally makes no sense. 

    Also, assuming Wistron was not paying THEIR employees properly, that is a contractual agreement between Wistron and their employees.  There is no such agreement with Apple.  If Wistron isn't paying people, perhaps employees should file a complaint or walk off the job.  Rioting is NEVER the appropriate response.  
    viclauyycOferdanh
  • Reply 12 of 27
    techconc said:
    While I believe large companies have some responsibility into auditing their contractors for compliance, etc. I don't agree with laws that hold a company responsible for the actions of another.  That literally makes no sense. 

    Also, assuming Wistron was not paying THEIR employees properly, that is a contractual agreement between Wistron and their employees.  There is no such agreement with Apple.  If Wistron isn't paying people, perhaps employees should file a complaint or walk off the job.  Rioting is NEVER the appropriate response.  
    But the article says "According to the Contract Labor (Regulation and Abolition) Act, 1970, the contractor is responsible for payment of wages and the principle employer is ultimately is responsible for it." So Apple couldn't rewrite the contract to evade the law. If Apple doesn't want to comply with the law, they can leave India. It doesn't matter "if you agree" with it or not.
    edited December 2020 elijahgGeorgeBMac
  • Reply 13 of 27
    tzeshantzeshan Posts: 2,351member
    I agree with George on this news. Indian government is corrupt. It does not have any liability? 
    viclauyycGeorgeBMac
  • Reply 14 of 27
    tzeshantzeshan Posts: 2,351member
    techconc said:
    While I believe large companies have some responsibility into auditing their contractors for compliance, etc. I don't agree with laws that hold a company responsible for the actions of another.  That literally makes no sense. 

    Also, assuming Wistron was not paying THEIR employees properly, that is a contractual agreement between Wistron and their employees.  There is no such agreement with Apple.  If Wistron isn't paying people, perhaps employees should file a complaint or walk off the job.  Rioting is NEVER the appropriate response.  
    But the article says "According to the Contract Labor (Regulation and Abolition) Act, 1970, the contractor is responsible for payment of wages and the principle employer is ultimately is responsible for it." So Apple couldn't rewrite the contract to evade the law. If Apple doesn't want to comply with the law, they can leave India. It doesn't matter "if you agree" with it or not.
    I agree with you. Apple should leave India. 
    GeorgeBMac
  • Reply 15 of 27
    But the article says "According to the Contract Labor (Regulation and Abolition) Act, 1970, the contractor is responsible for payment of wages and the principle employer is ultimately is responsible for it." So Apple couldn't rewrite the contract to evade the law. If Apple doesn't want to comply with the law, they can leave India. It doesn't matter "if you agree" with it or not.
    To be clear, I'm not disputing what is or is not the law in India.  I'm simply commenting on what I agree with from a common sense perspective.  As such, I've made no comment as to what should have been in their contract nor have I made any proclamation that my opinion should be held as binding or enforceable.  Likewise, I'm not sure why you've jumped to such a conclusion.
    danh
  • Reply 16 of 27
    MplsPMplsP Posts: 3,659member
    This story is confusing.  Will the actual rioters be held accountable for, you know, rioting?  Surely Indian law doesn't say "if your employer screws you over, bring 1,999 of your friends and trash the place."  Also since when is Apple the "contractor"?  Or is this term like "bi-weekly" where it means to completely different things?

    At the end of the day, I'm confident that this (the government inquiry part, not the losing production for months) won't be more than a paperwork hassle for Apple.  Apple will bring forth a raft of documentation showing that they did everything they could to hold Wistron accountable.  I find it impossible to believe that Tim Cook and his senior executives are hypocrites on this particular issue.
    Here's a thought - perhaps BOTH the rioters and Wistron are guilty! It's not an either/or proposition, you know. I'd be willing to bet that not all of the employees who were underpaid rioted, too. Should their right to get paid be negated by someone else's actions?
    Apple has said it uses labour in other countries because there isn't enough labour in America, but that doesn't explain why Apple doesn't own the company that hires the locals to do the labour in other countries. Unless a valid reason is offered, I'm calling it plausible deniability.
    There are many reasons why a company may want to subcontract for services - look around at the number of companies that do so within the U.S. If you can't see why a company might want to do it in another company you need to research the issue more.

    techconc said:
    While I believe large companies have some responsibility into auditing their contractors for compliance, etc. I don't agree with laws that hold a company responsible for the actions of another.  That literally makes no sense. 

    Also, assuming Wistron was not paying THEIR employees properly, that is a contractual agreement between Wistron and their employees.  There is no such agreement with Apple.  If Wistron isn't paying people, perhaps employees should file a complaint or walk off the job.  Rioting is NEVER the appropriate response.  
    See my comment above. This is really analogous to subcontractors filing a mechanics' lean when you have work done on your house. Yes, you paid your contractor and the agreement is actually between the contractor and subcontractor, but the law allows the subcontractor to file a lean on your property and collect if the contractor doesn't pay him/her.
    edited December 2020
  • Reply 17 of 27
    This reminds me that why so many major companies stay out of India even their market is huge.

    If India government/culture is not corrupt to the bone, India will be a major economic power. But sadly everyone want to take a share of other’s rightful earning. Nothing seems to work there.  
    maximaraGeorgeBMac
  • Reply 18 of 27
    crowleycrowley Posts: 10,234member
    Apple has said it uses labour in other countries because there isn't enough labour in America, but that doesn't explain why Apple doesn't own the company that hires the locals to do the labour in other countries. Unless a valid reason is offered, I'm calling it plausible deniability.
    http://letmegooglethat.com/?q=outsourcing
    MplsP
  • Reply 19 of 27
    crowley said:
    Apple has said it uses labour in other countries because there isn't enough labour in America, but that doesn't explain why Apple doesn't own the company that hires the locals to do the labour in other countries. Unless a valid reason is offered, I'm calling it plausible deniability.
    http://letmegooglethat.com/?q=outsourcing
    Just provide a reasonable responce then being what amounts to a smart ass.
  • Reply 20 of 27
    sreesree Posts: 145member
    This story is confusing.  Will the actual rioters be held accountable for, you know, rioting?  Surely Indian law doesn't say "if your employer screws you over, bring 1,999 of your friends and trash the place."  Also since when is Apple the "contractor"?  Or is this term like "bi-weekly" where it means to completely different things?

    At the end of the day, I'm confident that this (the government inquiry part, not the losing production for months) won't be more than a paperwork hassle for Apple.  Apple will bring forth a raft of documentation showing that they did everything they could to hold Wistron accountable.  I find it impossible to believe that Tim Cook and his senior executives are hypocrites on this particular issue.
    About 156 people have been arrested. Police is going about its business on that. People will not get spared, since this gives a bad name to the ruling government.

    https://timesofindia.indiatimes.com/city/bengaluru/karnataka-156-arrested-for-violence-at-iphone-plant-in-kolar/articleshow/79713735.cms
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