Taiwanese multinational Foxconn, maker of devices such as iPhones and iPads, announced it will stop paying compensation to the families of workers who take their own life. Foxconn claims workers commit suicide to get compensation for their families.
The decision was made after company directors felt that some employees who have committed suicide, 10 so far this year, along with three others who tried, did it to provide large sums of money as compensation for their families. The charge has been controversial and has received strong protests from international labour organizations.
Foxconn, however, maintains its theory and insists that this measure "will ensure that employees do not kill themselves in order to obtain a large sum of money for their families". The company says that it has evidence that this was the motive in some cases, the official Xinhua news agency reported.
Most of the families of employees who committed suicide received compensation of 100,000 yuan (approx. $14,600).
Most workers who took their life were young newcomers to the firm coming from rural and poor areas of China, some of them with emotional problems derived from love disappointments or feelings of isolation after leaving their hometown.
Press and labour activists, oppose the opinion of Foxconn, saying that the reasons for the suicides, apart from personal problems of the employees, lie in the strong pressure being placed on the workers by the company, the long hours and the limited opportunities for rest and leisure.
Following the events, Foxconn has also taken several measures such as salary increases to the employees, something that will be reflected in the cost of the firm's products in the world market. This prospect has caused the Foxconn’s shares to plunge in the Taiwan and Hong Kong stock exchanges.
The company has also installed mesh nets around buildings, hired psychiatrists, set up “hope phone lines” for employees suffering from depression, and even asked monks to hold religious rituals at the Shenzhen plant to improve the "feng shui" of the firm.
Foxconn produces components for many of the Western technology multinationals such as Apple, Dell, Hewlett-Packard, Nokia, Nintendo, Sony, among others, and employs 800,000 workers in China, of which 400,000 work in Shenzhen, where the 13 suicide attempts took place.