The Wistron Dispute and China’s lessons.

Synopsis: Wistron case shows that hasty labour laws violating labour rights is economically suicidal and damaging to India. 


Recently, contract workers attacked the Wistron’s iPhone assembly that resulted in property damage of worth ₹50 crore. 

  • According to a preliminary inquiry report by the State labour department into the incident Wistron and its labour contractors violated many provisions of the laws that resulted in sacking of its vice-president for its India operations.  
  • Also, The Apple Corporation has put further business on hold until Wistron addresses the labour dispute. 
  • The violence at Wistron unit will negatively affect India’s efforts, to attract foreign direct investment through production-linked incentive (PLI) scheme, to boost domestic production (‘Make in India’) and India’s step towards Atmanirbhar Bharat. 

What are the reasons for such violence? 

  • First, non-payment or delay in payment of wages along with violation of labour laws, such as non-issuance of the wage contract, employing women workers in night shift without providing adequate safety etc has led to the violence. 
  • Second, the anti-labour reforms brought by Karnataka government’s ordinances to amend Factories Act 1948, to attract foreign companies seeking to relocate from China, brought deep discontent among workers in the State.  
  • For example, it repealed the rule of standard eight-hour working day with a 12-hour working day and also brought overtime related changes. 
  • Third, low living wages. For example, the average daily earnings of casual workers in urban India in 2018-19, as per the official Periodic Labour Force Survey is well below the official living wage as defined by the Seventh Pay Commission for central government employees. 

What India can learn from China?  

Although some of the states might be following the labour policies of China, but there are few positives in China’s labour policy that need a consideration  

  • China mandates employers to provide dormitory accommodation for workers close to factories. Factory-provided dormitory accommodation is the principal reason for slum-free Chinese industrial cities, unlike in India. 
  • Apart from this, to subsidise production costs, China’s local governments compete with each other to offer excellent physical infrastructure and ensure adequate credit to industrial enterprises through the national development banks. They also act as midwives for Industrial promotion. 

Indian government policy to emulate only china’s stringent labour policies such as long working days and flexible use of labour, while ignoring the social benefits offered by china to its labours are bound to face resistance. 

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