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China – Apple accused of abusing temporary agency workers

30 July 2013

Pegatron, a supplier to Apple, has been accused of violating workers’ rights (including temporary workers) by China Labour Watch. The Taiwanese supplier has been accused of using underage workers, paying insufficient wages, and forcing employees to work overtime. China Labour Watch (CLW) accused Pegatron of 86 infractions; including 36 legal violations and 50 ethical breaches.

The infractions came to light as a result of interviews by CLW with more than 200 workers outside Pegatron factories. The average weekly hours working in the three factories investigated by CLW were between 66 and 69 hours. Chinese law restricts working hours per week to 49. The workers also advised that they were forced to sign forms reporting fewer overtime hours than actually worked, according to Bloomberg.

CLW listed the violations in 15 separate categories; including dispatch labour abuse (the use of temporary agency workers is referred to as ‘dispatch’ in China), hiring discrimination, women’s rights violations, underage labour, contract violations, insufficient worker training, excessive working hours, insufficient wages, poor working conditions, and abuse by management.

The report claims that, in each of the three Pegatron Group subsidiaries factories: “There was a heavy reliance on third-party labour agents—i.e., dispatch labour companies—to hire workers. The majority of workers at these factories were hired through such labour agents. In Jiangsu Province, the location of AVY, local law limits the proportion of dispatch labour to 50%. An upcoming national law will limit dispatch labour at any given employer to 10 percent.”

The report blames some of the violations on the rush to create a cheaper iPhone claiming that “At this moment, in Shanghai, China, workers in Apple's supplier factory Pegatron are monotonously working long overtime hours to turn out a scaled-back, less expensive version of the iPhone. Six days a week, the workers making these phones have to work almost 11-hour shifts, 20 minutes of which is unpaid, and the remainder of which is paid at a rate of $1.50 an hour ($268 per month) before overtime. This is less than half the average local monthly income of $764 and far below the basic living wage necessary to live in Shanghai, one of costliest cities in China. So these workers rely on long overtime hours. If a worker does not finish three months at Pegatron, the dispatch company that got the worker hired will deduct a large portion of his wages”.

The report claims that labour agencies hiring for the Pegatron factories required fees of up to 500 RMB (USD 80) despite the fact that hiring fees are in violation of Article 14 of China’s Provisions on Employment Services and Employment Management. At Pegatron Shanghai, if a worker hired by a labor agency did not complete three months of work at the factory, he would have 600 RMB (USD 98) deducted by the labour agency.

The major dispatch companies Pegatron works with include Shanghai Zhenghang, Shanghai Ruijie, Shanghai Haotai, Shanghai Tongxian, Shanghai Bode, Shanghai Caizhi, Shanghai Xiangjian, Shanghai Qianmeng, Shanghai Huinuo, Shanghai Fujing.

Apple said it has cooperated with CLW and advised in a statement: “We have been in close contact with China Labour Watch for several months, investigating issues they’ve raised and sharing our findings. [CLW’s] latest report contains claims that are new to us and we will investigate them immediately. Our audit teams will return to Pegatron [and other factories] for special inspections this week. If our audits find that workers have been underpaid or denied compensation for any time they’ve worked, we will require that Pegatron reimburse them.”  

China Labour Watch executive director Li Qiang said: “We will investigate these new claims thoroughly, ensure that corrective actions are taken where needed and report any violations of our code of conduct. We will not tolerate deviations from our code.”

“Apple has not lived up to its own standards. This will lead to Apple’s suppliers abusing labour in order to strengthen their position for receiving orders. In this way, Apple is worsening conditions for workers, not improving them,” he added.

The full report can be downloaded by click the link below. 

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