At a time when the government is actively courting foreign investment, and making a concerted attempt to position India as a global manufacturing hub, the labour crisis at the Wistron Corp plant in Narasapura, Bengaluru, is disconcerting. The violence that erupted at the manufacturing facility was allegedly on account of workers protesting the non-payment of regular and overtime dues by the company. Both Wistron and Apple have acknowledged the lapses in the payment of wages. Wistron has fired its vice-president who was overseeing the India business, while global tech giant Apple has put the company on probation, stating that the firm will receive no new orders till it completes all corrective action. However, episodes such as these not only send a wrong signal to investors, but may also raise further apprehensions over recent moves seen as diluting the protection afforded to labour.
The assembling of iPhones has often been held up as an example of the government’s success in boosting domestic manufacturing. Wistron, along with Foxconn and the Pegatron Corp, lies at the heart of component manufacturing and the mobile phone assembly drive in India. In fact, looking to replicate the apparent success of its mobile phone assembly initiative, the government has recently announced the expansion of its Production-Linked Incentive (PLI) scheme to cover 10 key sectors, ranging from automobiles to pharmaceutical drugs. Separately, it has also moved to ease the stringent and archaic labour laws that have long been held responsible for holding back the growth of a labour intensive manufacturing sector. For instance, the Industrial Relations Code 2020 enables industry to employ workers on a fixed-term contract for seasonal and short-term jobs, sidestepping the contractor system — six contractors were responsible for recruiting contractual workers for Wistron.
Considering that changes to labour laws are often viewed with suspicion, as the debate has often been framed in terms of empowering managements, the current crisis may well heighten such fears. The signals that emanate from this unrest are a cause for concern. At a time of acute distress, labour practices will come under intense scrutiny. While some flexibility for firms is desirable, both the government and firms must realise that during periods of acute precarity, concerns of labour must be kept front and centre.