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Exploitative jobs prevalent in india’s mobile phone industry

Sep 12, 2011
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Precarious jobs and insufficient wages are common in the mobile phone industry in India. These are the findings of a new report launched today by the makeITfair campaign. Phony Equality – Labour standards of mobile phone manufacturers in India reveals that most of the workers at four electronics factories owned by Nokia, Flextronics, Foxconn and Salcomp in Chennai’s Special Economic Zones (SEZs) are either contract workers or ‘trainees’ who have no claim to permanent employment and are often trapped in unfair and exploitative positions.

The report Phony Equality – Labour standards of mobile phone manufacturers in India found that around half of Nokia’s workforce is employed in precarious employment positions as trainees and contract workers, without the same benefits as permanent employees. At Salcomp, Nokia’s Finnish supplier, the proportion is as high as 80 per cent including a large amount of trainees. Nokia’s mobile phone factory near Chennai in India is the company’s largest factory, employing more than 11,000 workers. Salcomp and Flextronics make phone chargers, while Foxconn produces the casing for Nokia mobile phones, as well as others.

“Most of the workers who are on the direct payroll of Nokia, Foxconn and Salcomp start as ‘trainees’ and are kept in this tenuous status for 15-18 months, even though their training may last only for a couple of months,” says Päivi Pöyhönen at Finnwatch, one of the organisations behind the   makeITfair campaign. “Salcomp and Foxconn trainees are subsequently put on probation and usually, after two years in service, are confirmed as fully-fledged employees. However, ‘trainees’ have no assurance of permanent employment.”

The proportion of contract workers varies between 10 per cent at Salcomp and 60 per cent at Flextronics. Both companies confirmed that they take on contract workers, unlike Nokia and Foxconn. When makeITfair asked Nokia how long contract workers have worked, on average, at its factory in India, the company did not know. Contract workers do not have the same security, wage increases and possibilities for career advancement as permanent employees.

For example, pay for Nokia’s trainees and contract workers, is around 70-80 Euros per month. “In the workers’ opinion, a living wage would be 145-240 Euros per month. With that money, they could rent their own room and start a family,” says Gopinath Parakuni of Cividep-India, makeITfair’s local research partner. According to an international campaign of trade unions and NGOs, Asia Floor Wage, the minimum living wage for India would be 130 Euros per month. Only the most experienced permanent workers for Nokia and Foxconn had reached this level, thanks to union settlements. 

Both Nokia and Foxconn have recognised and negotiated wage settlements with the same union in 2009 and 2010, improving wage and benefits packages for permanent workers. For example, wage payments for Nokia’s operators have tripled in five years. However, there is a question about the extent to which the union represents the workforce. Also, contract workers are excluded from negotiations. At Salcomp and Flextronics, workers can raise issues through workers’ committees. In the companies’ own words, they do not work against unions. However, these are untested words.

“Our research found that the contract labour and trainee systems trap workers in an unfair and exploitative position,” says Finnwatch’s Päivi Pöyhönen. “In our survey of over 100 workers, many revealed that they arrived at multinationals with the expectation of good salaries and employment benefits, but they were bitterly disappointed – not only with the salary, but also with the insecurity of their jobs. It is not clear what the future holds for those workers who do not manage to secure permanent jobs as fully-fledged employees within the industry.” 

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