Foxconn workers given marching orders: After Nokia, now Foxconn announces VRS scheme

Workers of Foxconn International Holding-FIH (formerly Foxconn India Private Limited), located inside Nokia Telecom SEZ Park in Sriperumbadur, were in for a rude shock when they went for their morning shift yesterday (18th June 2014). A Voluntary Retirement Scheme (VRS) notice was stuck on the notice board asking workers to avail the Scheme within two days by 20th June 2014. The ‘Scheme’ made a grand announcement of offering the workers a compensatory package of Rs 75,000 lumpsum money alongwith 10 months salary; 1 month notice period salary; leave salary and gratuity. “Leave salary and gratuity are earned by workers as part of their normal course of employment, it is not a compensation money for ‘retrenching’ them”, (emphasis added) said S Kannan, District Secretary (Kancheepuram) of Centre of Indian Trade Unions. A back of the envelope calculation shows that through this scheme a worker with 8 years of work will get maximum upto Rs 3 lakhs approximately.

In a letter dated 12th May 2014 addressed to Principal Secretary, Labour and Industrial Department Tamil Nadu government, FIH had stated that it was “compelled to down-size” its manpower “substantially to suit the current requirements of our customer”. FIH attributed its ‘compulsion’ to the cut down of production volumes in Nokia plant located inside the SEZ. “In India, our business is substantially dependent on Nokia, Sriperumbadur plant. We are mere Tier-1 suppliers and not OEM manufacturers like Nokia. Therefore, you may appreciate that we have been operating our business under more volume with less thin margin business model”.

Citing transfer of “burden to their (Nokia) vendors” and “cost down measures in order to save the interest of all stake-holders of the Company”, FIH stated that it will be able to offer work to only to 800 workers. As per their letter to the Principal Secretary FIH claims that for past two months 500 workers were found ‘idle’ in the factory to whom they had been “paying salary without any work”. The Company claims that under the present situation of “uncertain status of orders”, they may end up with over 800 “idle workforce”.

The company presently has over 1600 permanent operators in its rolls. It had set up its first plant in 2005 in Irrungattukottai in Sriperumbadur and ran it for 3 months. In April 2006, it set up a plant inside Nokia Telecom SEZ. It has another site in SV Chatram near Sriperumbadur which has 7 plants and a worker’s dormitory. Although only one (1) plant is operating at the moment at the SV Chatram site. At its peak of production, the Company hired over 6000 workers—3600 contract workers, 1000-1500 trainees and 1700 permanent workers.

“Foxconn is much bigger than Nokia. We have over 5 lakhs global workforce. Our production volumes are high, we supply to many companies globally and not just Nokia. If the company wants to run this plant, then they can easily divert some volumes to our plant here and run it. It does not need to downsize workforce. Even now we have orders in this plant. We are assembling 2 types of mobile phones, have orders from ABB (switch) company also,” said Rajni, leader of CITU affiliated Foxconn India Thozhilalar Sangam (FITS) which has about 1044 members in the company. FITS, which has majority members in the Company hasn’t been recognized by the FIH management who have so far preferred to negotiate with LPF (DMK) or ATP (AIDMK) affiliated unions. A long drawn legal battle for recognition of union in FIH has been pending in the High Court and Supreme Court of India since 2012.  (See: Supreme Court to decide the fate of union in Foxconn, Sriperumbadur, 7th November, 2013,

“I joined Foxconn in November 2006. At that time I was working in Lumax (auto part supplier to Hyundai) as a contract worker for a salary of Rs 4000 per month. Foxconn offered me a permanent job but with a lesser salary of Rs 2900 per month. But I took the job since it was a permanent position and I thought it would be secured even though the salary was low. Foxconn said they will increase my salary to Rs 7000 per month in 2 years. So I decided to join the Company. I have now worked for 8 years and my salary is only Rs 9500 per month. I refused to sign the settlement with the ATP union last year which was deceitfully and undemocratically agreed upon between the management and ATP. Even contract workers with my kind of experience get over Rs 12,000 per month salary. I feel completely cheated and dissatisfied with the Company. My dreams of secured permanent job with a good salary are gone”, lamented Rajni.

For Muruganandam, another Foxconn worker and member of FITS, the situation is also similar. He worked as a trainee in Sungwoo Gestamp Hightech (Chennai) Ltd in 2007 for a salary of Rs 7000 per month. In 2008, he was offered a permanent position with a salary of Rs 3500 in Foxconn. He decided to take the offer as it was a “secured position”. After the first 6 months of probationary period, Muruganandam was given a salary of Rs 4000 per month. “It is the same story for most of us. We were all lured by ‘permanency’ and ‘security’ of the employment. Even though our wages were low, we all decided to take permanent jobs thinking we will get wage hikes as we go along. Company had promised wage hikes to us” said Muruganandam.

As the workers sat discussing their next strategy on how to counter the VRS scheme which seems “inevitable” to them, I re-read the letter from the management which claimed that it was trying to save the interest of “all stake holders”. Certainly it does not seem to consider the workers as stake-holders in the company—they are merely expendable people who can be given a pittance and sent off dictated by company’s profits.

19th June 2014, Sriperumbadur, Kancheepuram

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