To Apple Inc.: Dispute over labour issues in Taiwan and China

To Apple Inc.:

Everyone knows that Apple Inc. is a leading brand in technology application, and its products have gained great popularity all over the world. In Apple’s Corporate Social Responsibility collaborative initiatives, Apple addresses issues of labor rights and claims that its hit products would never come from the exploitation of labor.

After several months into investigation, however, we found that one of your suppliers, WINTEK Corporation, has seriously violated your Supplier Code of Conduct. Apple has not yet taken any action toward rectifying this. We hope our protests will evoke your conscience and draw your attention to this labor rights issue. Apple Inc. has the obligation to ensure to its first-line workers their inalienable labor rights. We hope Apple can keep its promise of corporate social responsibility and demand that all its suppliers, including WINTEK, meet international labor standards.

Since last year, WINTEK Corporation has taken all measures to push the labor cost down. In its factories in Mainland China and Taiwan, WINTEK imposed mandatory unpaid leaves, laid off employees, cut overtime pay, and canceled special bonuses and allowance. According to labor regulations in China and in Taiwan, respectively, all labor contract changes have to be approved both by employers and employees. But WINTEK changed contracts and compensation without employee approval. WINTEK forced employees to accept those compensation and contract changes; WINTEK even laid off a large number of workers when the company still earned huge profits. This kind of large-scale layoff violates Taiwanese labor laws.

When the employees in WINTEK strove for their legal rights, WINTEK suppressed them rather than retracted its illegal orders. WINTEK sued both these employees and Wei-Li Chu, the Secretary General of National Federation of Independent Trade Unions, who supported the strikes in WINTEK. These lawsuits violated the whistleblower protection rules in the Apple Supplier Code of Conduct.

As for employee basic benefit and health issues, WINTEK also has shown very bad performance. MASSTOP in Dongguan, a subsidiary factory of WINTEK, failed to provide sanitary food to its workers. MASSTOP cut the employee food budget from 8 RMB to 4.5 RMB per person per day. According to the employees in MASSTOP, the food provided by the company was stinky and sour, and the steel plates were rusty. Moreover, on April 3, hundreds of the workers in MASSTOP were sent to the hospital because of on-site food poisoning. This is a serious violation of the dining rules in the Apple Supplier Code of Conduct. But Apple hasn’t reacted to this significant violation. Apple has the obligation to demand WINTEK to improve the health and dining situations in MASSTOP.

The labor measures taken by WINTEK, including the cut in overtime pay, were deemed illegal by the Taiwan government after an official labor inspection. MASSTOP in Donguan has ignored labor rights for a long time. MASSTOP does not provide an anonymous complaint mechanism for workers to report workplace grievances; a forum for such anonymous complaints is recognized as basic employee right in the Apple Supplier Code of Conduct. Many grievances remain unsolved; hence, 7,000 workers in MASSTOP went on a three-day large-scale strike on April 15, 2009. We have not yet seen Apple take any measures to remedy these serious conflicts and violations.

This is not the first time that Apple has been involved with violations of labor rights standards. In 2006, there was a controversy over an “iPod sweatshop” in Foxconn, and we believe that Apple understand the inside story better than us. In 2008, Scholars Against Corporate Misbehavior (SACOM) addressed issues about underpaid overtime, work injuries, and insufficient labor insurance in the Primax factory in Dongguan, where iPhone cameras and accessories are made. Now in 2009, there is another violation case, this time involving WINTEK.

Apple may have demonstrated excellent achievements in technology innovation and application, but it has significant flaws in supplier monitoring and management. Hence, we make a four-part appeal to Apple to improve the labor conditions in your suppliers’ factories, and we hope Apple will give the public a clear promise by May 31.

1. Apple must follow the international Supplier’s Code of Conduct and demand that WINTEK restore the jobs taken from the workers who were laid off in Taiwan and China, withdraw the demonstration lawsuit, and promise no retaliation on workers.

2. Apple must follow the international Supplier Code of Conduct by demanding that WINTEK improve its working conditions immediately.

3. Apple must demand WINTEK to allow third-party labor unions or organizations to enter the factories to conduct labor inspections, reveal the inspection results to the public, and look into the responsibility. Further, Apple should review its orders with WINTEK, evaluating the supplier contract based on the inspection results and WINTEK’s improvement.

4. Apple must respect the will of the labor representatives and hold direct talks with them. The labor representatives should be chosen by WINTEK workers in Taiwan and China.

Facts	Details
1. Unlawful mass lay-offs.	Laid off nearly 700 employees while there still is a surplus of four billion TWD. (approx. $118 million USD) Taiwanese press also reported that WINTEK had received urgent orders, thus needed to hire a good number of new workers.
2. Demanding employees to work unpaid, meanwhile assigning unpaid leaves. (Confirmed and fined by Taiwanese labour administration)	Since November 2008, WINTEK began to force unpaid leaves on employees, meanwhile asking them to resume the work, unpaid.
3. Changing working hoursunilaterally	Asking the night shifts to work as many hours as the day shifts per month. The discrepancy was counted as a leave of absence, thus deduction of one day’s wages. Some got a monthly wage lower than the basic NT$ 17280/ month.
4. Demanding employees to catch up on working hours, resulting in more than ten consecutive working days. (Confirmed and fined by Taiwanese labour administration)	The 4-2 shifts were demanded to make up on their working hours, thus had to work 10 days in a row. This has constituted an offense of Article 36 of Labour Standards Law.
5. Forcing workers to work overtime	In order to meet deadlines, forcing workers to work 12 hours a day, 5 days a week, and forcing them to give up days off and national holidays. This has constituted an offense of Article 30, 32, 36, 37 and 39 of Labour Standards Law.
6. Forcing workers to sign the agreement, replacing overtime wages with days off.	Forcing workers to sign the agreement, replacing overtime wages with days off. This has constituted an offense of Article 24 of Labour Standards Law.

Table two: Unlawful
actions of MASSTOP, WINTEK’s subsidiary in Dongguan, China.

1. Cancelling full attendance rewards upon the raise of basic wage, without negotiation with employees.	Immediately after the Dongguan government raised the basic wage to $770 RMB (approx. $114 USD), MASSTOP canceled the full attendance rewards promised in the contract.
2. Unilaterally cancelling benefits without negotiation with employees	In October, 2008, MASSTOP posted a notice declaring the cancelling of performance rewards and year-end bonuses.
3. Adopting special working hours without the approval of Dongguan’s labour administration, reducing holiday wages from twice the normal wage to just 1.5 times of it.	On February 27, MASSTOP posted a notice, declaring a special working hours system has been approved by Dongguan City’s labour administration. However, the employees found out in March the administration has never approved such change. MASSTOP claimed it had been approved, while forcing employees to sign the agreement.
4. During the strike, unilaterally claiming that workers who failed to return before three in the afternoon, April 17, would be regarded as voluntarily ending their labour contracts.	Employees of MASSTOP in Dongguan went on strike for labour condition issues such as underpaid overtime. Though the company agreed that overtime wages would be handed out before April, 21, according to the Chinese labour regulations, workers have the right to continue the strike as long as they don’t have their wages. The company’s rules stated that workers who neglect work over 2 days might be sacked.

Table three: WINTEK (and
MASSTOP) violations of the Apple Supplier’s Code of Conduct

Codes violated	Facts in Taiwan (WINTEK)	Facts in Dongguan, China (MASSTOP, WINTEK's subsidiary)
The code concerning overtime wages: “workers must be compensated for overtime hours at the premium rate required by applicable laws and regulations.”	forced employees to give up their overtime payment and holiday subsidies, opting for more days off instead.	Adopting special working hours without the approval of Dongguan’s labour administration, reducing holiday wages from twice the normal wage to just 1.5 times of it. (Later proved the administration has never approved such change.)
The code concerning fair treatment to employees according to applicable laws and regulations.	While the company still enjoys orders and surplus, it kept laying off workers illegally, cutting pays and benefits, forcing unpaid leaves, demanding work without pay, resulting in a monthly wage lower than the basic NT$ 17280/ month.	Unilaterally cancelled the full attendance rewards when Dongguan government raised the basic wages. In February, MASSTOP claimed that the adoption of special working hours system had been approved by the administration, to reduce overtime wages to 1.5 times of the normal wages instead of twice. Amidst the strike initiated by angry workers, the company unilaterally claimed that those who failed to return to work before three in the afternoon, April 17, would be regarded as voluntarily ending their labour contracts.
The code concerning dormitory and dining: “Suppliers must provide workers with clean toilet facilities, access to potable water, and sanitary food.”		Cut the expenses for daily meals from 8 RMB to 4.5 RMB. Some say the food is a far cry from edible. This issue directly resulted to the strike, but the company has not solved it yet. There was a mass ptomaine poisoning this April.
The code concerning whistleblower protection and anonymous complaints	While employees made legal attempts to appeal to labour laws and the public, WINTEK has filed a lawsuit against Wei-Li Chu, secretary general of the National Federation of Independent Trade Unions (Taiwan), who continuously helped WINTEK workers who tried to get their jobs back.	There is not yet an program through which employees can file complaints anonymously. After the strike, the company has been taking retaliatory actions, including admonishing strikeparticipants. As a result, other employees are being silenced about emerging problems in the company.
The code concerning a safe working environment	Workers at CG manufacture lines in WINTEK’s Tanzi factory, and those at the yellow light section in Huangchung and Chunggung factories are required to use organic solvent such as halftone detergent or etching solvent, but WINTEK did not provide masks or protective suits.