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Nokia Hits at India Low Wage Claims

Maija Palmer and Dan Thomas in London
Tuesday, 13 Sep 2011 | 9:10 PM ET

Nokia, the Finnish telecoms company, has hit back against claims that it pays below the living wage at its biggest phone factory in India, which were made by Finnwatch, the human rights organization.

Finnwatch said Nokia paid contract workers about €70 ($96) a month at its factory in Chennai, which is a quarter above the legal minimum wage but less than the €127-a-month minimum living wage for India, according to the Asia Floor Wage campaign.

Finnwatch was also critical of the working conditions for the local workforce on time-limited contracts and the length of time workers were kept on low-paid trainee contracts before being made permanent staff. Trainee contracts were typically for 15 to 24 months, although workers and managers felt that actual training took no more than six months.

“A large number of workers are employed in precarious positions and earn very low salaries, even in the Indian context,” said Päivi Pöyhönen at Finnwatch.

Nokia’s factory is its largest in the world, employing more than 11,300 workers producing about 300,000 sets per day. About 45 per cent of the workforce is on time-limited or trainee contracts.

A representative for Nokia said the Asian Floor Wage’s estimate was assessed for the Delhi area, and was not comparable to the Chennai area. He added that the report also disregarded the overall employment package that is given.

The accusations come at a difficult time for the Finnish company, whose share of the handset market has fallen from 30.6 per cent a year earlier to 25.1 per cent in the first quarter of 2011. Nokia faces competition in the market for high-end smartphones, but is seen as hard to beat in terms of producing large volumes of low- to mid-tier handsets cost-efficiently.

Working conditions in mobile factories have been in focus since last year, when Foxconn, which makes Apple’s iPhones and iPods in China, raised wages in response to a spate of suicides among its factory staff.

The representative added: “There are a couple of conclusions in the report we disagree with. As Finnwatch states, Nokia pays the highest salaries in the Chennai area for employees, including trainees. These salaries are well beyond the local minimum wage. We believe the Finnwatch report, which uses salaries in New Delhi as a benchmark, is misleading. We also believe that Finnwatch should include key benefits like occupational healthcare, meals, day care and transportation in their measurement.”

Nokia said new employees – who rarely had experience in the industry – underwent a modular training programme lasting 15 months. “We continuously evaluate the content and length of this programme,” the official said.

Both Nokia and Foxconn have recognized wage settlements with the union, which Finnwatch said had made a difference to workers’ wage and benefits packages.

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