PegatronSource: Reuters

What you need to know

  • Apple has told iPhone assembler Pegatron that it won't be getting new business.
  • Pegatron was found to be violating labor rules relating to student workers.
  • The company did its best to cover its violations up, too.

Apple has taken the decision to suspend new business with iPhone assembler Pegatron, according to a new report. The move came after Pegatron was found to be flouting local labor rules.

The news came via a Bloomberg report that noted a violation of Apple's Supplier Code of Conduct was discovered weeks ago. While Pegatron now won't be picking up any new Apple business, existing contracts are unchanged.

The Cupertino, California-based technology giant said it discovered several weeks ago that the Taiwanese manufacturer misclassified student workers and allowed some to work nights and overtime in violation of Apple's Supplier Code of Conduct. Employees then "went to extraordinary lengths" to cover up the violations. It's since placed its partner on probation until corrective action is completed, the U.S. company said in a statement.

Apple says that documentation was falsified in an attempt to cover the situation.

"Pegatron misclassified the student workers in their program and falsified paperwork to disguise violations of our Code, including allowing students to work nights and/or overtime and in some cases to perform work unrelated to their major," it said in its statement. "The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms."

Pegatron confirmed that its Shanghai and Kunshan factories had students working nights and longer hours than they should have. They were also found to be working jobs that were "unrelated to their majors," something that was "not in compliance with local rules and regulations."

The manager responsible for overseeing students has now been fired, Bloomberg's report notes.