Manufacturing Despair: Labour violations in a Chinese phone manufacturing unit- Hipad Technology India

PUDR conducted a fact-finding to probe into the incident of mass termination in a mobile phone manufacturing unit in Noida, Uttar Pradesh where around 180 workers were thrown out of job without any prior notice on 29th November 2018. The abysmal and appalling nature of employment being generated under the 2015 ‘Make in India’ drive becomes starkly visible in this manufacturing unit called Hipad Technology India Private Limited situated in Noida Sector 63, making phones for Chinese companies Oppo and Xiaomi. Hipad was established in August 2016 and since then has been hiring workers through three different contracting companies. Like most of these manufacturing units that have been set up in India since the 2015 drive, the nature of hiring is purely contractual with a clause that the workers can be terminated at any point of their tenure without any prior notice. PUDR in its investigation also found out that early in the year workers in Hipad had complained of delayed salaries and unexplained salary cuts. There was a strike on 17th April against delayed salaries. After Diwali in the beginning of November 2018 however, the production hit a low due to reduced demand and the management resorted to layoff. Over 50 workers had been laid off in the first three weeks of November. On 29th November, the company resorted to mass termination which resulted in protests by the workers and police action against them.

Incident of 29th November: on 29th morning when the workers reported on duty, they were unable to get through the biometric entry. The management informed them that they had asked the contractors to not supply workers as production was low but the workers had received no communication either from the management or the contracting companies. They were given false assurance on 29th that they will be shifted to another plant and should temporarily go on leave however, in such contractual jobs, it is a known fact that there is no leave and not being on duty implies termination. Around 180 workers were laid off, there were mass protests and around 1200 workers had gathered to put pressure on the management. When the management did not budge, workers started pelting stones. No incident of causing hurt to any person was reported however following the destruction of property within the company’s premises, police was called in.

Police action against the workers: PUDR spoke with the police officers at Noida Sector 71 Police Station where the FIR in the matter has been registered. Contrary to the initial reportage in the media quoting police officers that no formal complaint has been registered against the workers, the first FIR was registered on 29th itself after the incident, on the complaint of the senior inspector against six workers and around 300 unnamed persons. Sections 147 (rioting), 148 (rioting with deadly weapon), 332 (causing hurt), 336 (endangering life and safety of other), 353 (deterring public servant), 427 (mischief causing damage to the amount of fifty rupees or more) and 108 (abetment) of IPC have been invoked; all six have been arrested and are in judicial custody in Kasna, UP. A second FIR was registered in the same case on the compliant of manager, Hipad Technology on 2nd December under sections 147 and 427 of IPC against the six workers already named in the first FIR and many unnamed others. However, five more workers have been named in the second FIR who have not been arrested so far according to the police. The police while talking to us explained that the workers had been terminated and turned violent against the management and the police had to intervene. No further details were disclosed by the police citing that investigation was underway and that the case involved the ‘Chinese Embassy’ and top officials of the management were Chinese citizens. The police action against the workers has reduced the situation into a law and order problem where the workers are being penalized for resisting their rights violation.

Working conditions: the protest by the workers which resulted in loss of property and destruction within the company premises needs to be placed in context of the insecurity that the workers had been subjected to and were eventually thrown out of, without any ultimatum.

The atmosphere of terror still surrounds the company palpably and it was very difficult to talk to the employees of Hipad. The police presence around the company is stark and visible. However, nearly every single petty vendor around and persons working in the adjoining area who spoke to us, talked about grave injustice being done to the workers. PUDR could speak with only two of the employed workers. According to them, the company only hires ITI and polytechnic graduates. The workers are hired for an unspecified period though some of them are given ID cards which have the names of contracting companies and not Hipad, with an expiry date of 11 months from the day of hiring. Many times, they are ousted much before the stipulated period, which was the case with the 29th November layoff. The recruitment is usually on the wage scale of 12000 per month with a PF deduction of 8 percent per month. Although the hiring is done on a scale of 12000 per month, no one is given more than 9200 per month. This does not explain why Rs. 1840 is deducted every month when 8 percent of PF deduction amounts to only Rs. 960. The working hours are 9 per day. Up until Diwali, the company had mandated 3 hours of overtime (OT) each day for which the workers were paid Rs. 100 per hour. Routinely, OT was not a matter of choice but compulsory and the workers also did not resist the compulsion as they managed to stay afloat only on account of the OT. Since November 2018 with production downscale, OT had been scrapped making it very difficult for workers to sustain when most of them lived in rented accommodations nearby which cost them at least 4000 per month.  Before the OT was scrapped, the working hours would be 12 per day where an hour of  ‘leisure time’ was given for lunch and tea which was subtracted from the total number of working hours which meant that for 12 hours a day that a worker spent in the company, he was paid only for 11 hours. In case the company declared a holiday the workers were only paid for half day. This time around Diwali the workers were offered ridiculously small sums of Rs. 400 to Rs. 500 as bonus when the usual practice is that of giving a month’s salary as Diwali bonus.

Manufacturing Despair:  The incident is reminiscent of the incident at Vivo manufacturing unit again, located in Greater Noida where over 1000 workers had been terminated from job from the company since the end of the IPL season in 2017. On 25th July 2017 angry workers had retaliated and ransacked the factory. PUDR had conducted a fact-finding and released a statement (http://pudr.org/content/condemn-exploitation-and-harassment-workers-vivo...). It must be mentioned that the NHRC had then taken cognizance of the PUDR fact-finding and intervened in the matter. The case had been referred to Uttar Pradesh Human Rights Commission to look into rights violations, as an acknowledgment that the work conditions in such units violate labour norms and workers’ rights. Unfortunately, nothing has come of it.

Today, India has become the second largest manufacturer of mobile phones, after China. India’s attractiveness for manufacturers is growing due to availability of low-cost labour as well as a huge domestic market. According to one study, in 2014, the average manufacturing labour cost per hour in India was US$0.92 as compared to US$3.52 of China. Additionally, ‘Make in India’ initiative by the Indian government in 2015 provided tax concessions as well as infrastructural benefits to attract foreign investment. These factors along with rising manufacturing costs in China and Taiwan compelled manufacturers to shift their manufacturing base to alternate destinations such as India. Apart from other sectors, Chinese companies are entering India in a big way in the manufacturing of mobile phones. Most of the large Chinese mobile phone companies have set up production bases in India. Noida in NCR is an important cluster of manufacturing of mobile phones. Xiaomi, Oppo, Vivo already have their assembly units in the area.

As stated earlier, one of the major reasons for relocation of assembling task to India is low labour cost. The already low cost is being further reduced by having no written contracts and keeping the workers completely outside the ambit of labour laws. The result is creation of jobs with absolutely no security where the workers may show up to work one day only to realise that they have been terminated. Even when the ‘going is good’ (the job is there), it is only overtime work which ensures bare survival.

We are confronted with a situation where the projection is definitely that of generating employment and for majority of the unemployed populace, such jobs are the only means of survival. However, in the name of employment a system of wage slavery is being reproduced which is characterized by dreadful work conditions, abuses, abysmal salaries, and hiring and firing at-will. And when the resentment of the exploited workers trapped in this system of wage salary finds expressions of anguish, the state comes down heavily on them in the interest of capital.

PUDR demands:

  1. FIR against the workers should be withdrawn immediately
  2. Sacked workers should be reinstated
  3. Hiring should be under a written contract with the workers where the company should be recognized as the principal employer
  4. Wage rates should be revised according to the statutory laws

 

Shahana Bhattacharya, Sharmila Purkayastha

Secretaries, PUDR

12 Dec 2018

Section: