‘Disappearing workers’: Foxconn in Europe and the changing role of temporary work agencies

Workforce recruitment in countries of origin and cross-border travel

The types of TWA engaged in cross-border recruitment and selection were small or medium-sized rather than large operators and focused on the recruitment of groups of workers. Large agencies, as McLoughlin and Münz (2011) suggest, do not participate in cross-border recruitment as they target individuals rather than groups of workers. TWAs supplying workers to Foxconn recruited and selected workers directly in the countries of origin via online and newspaper advertisements and did not charge workers for these services. Agencies provided potential workers with initial job information and selected workers on the basis of having no medical condition or criminal record as well as passing a basic maths and logic test:

I found out about Foxconn from an advert that said that there will be a gathering in Katovice where they told us what to do regarding getting the job, sorting out the work documents, how to go about getting to the GP etc. There were about 70 people together and the agency transported us straight away to Hurka [workers’ dormitory] in three buses that held around 25 people each. It was done through an agency called SK Express based in Slovakia and Express People, which is the same agency. (Dariusz, male, Polish, agency worker)

Following the first round of selection, recruitment modalities happened rather quickly. Some workers said they were recruited just a few days before starting work at Foxconn. As well as responding to adverts in local newspapers or online, migrants also contacted work agencies themselves if they had a friend or a family member working at Foxconn whose migration had also been facilitated by the TWAs.

Transport to the Czech Republic was organized by the agencies at no cost to the workers. Using coaches or minivans, stopping at various points to collect workers, agencies moved workers from their countries of origin directly to the Foxconn plants in the Czech Republic. There the workers were put onto local coaches and divided between dormitories that were located off site and about a 20–30 minute drive from the factory. These operations typically took place at the weekend as buses arrived at Foxconn on a Sunday afternoon. On the Monday workers began work at the plants.

As well as bringing workers to the Czech Republic, TWAs also organized group transportation to workers’ countries of origins (and back to the factories again) for the main holidays. Such group-organized movement permits agencies to ensure attendance and avoid delayed returns, as might happen when travel is undertaken individually:

I got fired because I did not come back on time from Poland. I went to Poland for Easter and returned a couple of days late so the agency did not accept me back as they got someone else. (Dariusz, male, Polish, agency worker)

TWAs’ organization of movement was related to Foxconn’s production needs. During low-production periods agencies transported workers back to their countries of origin where they remained until production resumed:

There is a group of workers that are going back home today [26 February 2012]. So, half of the Bulgarian workers are going home now and will basically be waiting for the extension of production. They will be back on 23 March. (Vassil, male, Bulgarian, agency worker)

The ability to move workers across national borders is to be considered in relation to the EU enlargement process that enabled EU-wide labour mobility. The TWAs rely on the new EU nationals’ right to move and work across the EU:

I worked as a bricklayer in Hungary. In Slovakia I worked at the TPCA factory [a joint venture between Toyota, Peugeot, Citroen, and Audi], and in Italy I worked in agriculture. Now I am here. I arrived in Italy, Imola, in September 2011 and the salary was €6, but in March 2012 it decreased to €3.50 so I decided to go back to Romania. Then I learned that the agency was looking for people to work at Foxconn and I came here. (Petre, male, Romanian, agency worker)

As the right of new EU nationals from Eastern Europe to move and work in the enlarged EU enables agencies to recruit workers in Slovakia, Poland, Romania and Bulgaria, so it also limits the access agencies previously had to workers from non-EU countries. Agencies are not permitted to lease non-EU workers to client firms, and non-EU nationals who are already employed need to renew their work permits every six months instead of every one or two years as before. This created a bigger administrative burden and risk for employers, and it changed the composition of labour at Foxconn. A former HR manager at Foxconn explained how over time the number of workers from Vietnam and Mongolia on direct contracts decreased, and that of agency workers from neighbouring EU countries increased, because the latter do not need a work permit.

In the previous guest-worker regime, individual states planned, regulated and managed international migration via bilateral agreements (Castles, 1986). In contrast, states’ role within an enlarged Europe is largely limited to the control of non-EU migratory flows as the movement of EU workers, next to being autonomous, is regimented by TWAs. The nationalities of migrant workers at Foxconn reflected the general situation in the Czech Republic, where in 2011 non-nationals counted for 5.4 per cent of the workforce. Migrant workers came mostly from Slovakia (114,000), Ukraine (70,000), Vietnam (34,000), Poland (21,000), Bulgaria (8000) and Romania (7000). There were also Mongolians, whose numbers dropped from 13,000 in 2008 to 3300 in 2011; the restrictive immigration policy towards non-EU nationals also reduced the numbers of Ukrainians and Vietnamese significantly (Horáková, 2011). The activities TWAs undertake are therefore best seen as depending on what Peng (2011: 727) calls the ‘interaction between production and state politics’, namely the overlap between Foxconn’s production needs, cost-cutting pressure that corporate customers place on Foxconn, as well as state labour and immigration policies.

Management of the workforce inside and outside the factories

Links between Foxconn and TWAs were close. Xawax, the agency that supplied most workers to Foxconn, had its offices within the factory complex. Inside the factories agencies played an active role in the management of labour and were responsible for the quality, quantity and timing of the work performed by agency workers. The key figure from the agency was the so-called coordinator of production, or line-leader. The role of the coordinator was to distribute the agency workforce on the basis of Foxconn’s needs: he or she attended meetings with Foxconn to get a clear idea of how many workers were needed on what shift, in what positions and for how many hours, and which workers Foxconn managers would like or not to have back. These decisions were taken on a daily basis:

The line-leader is the one distributing people between departments. The line-leader is the boss. He’s in charge alongside the supervisor from Foxconn. They distribute the work. There are workers who are called reserves. They can work all the positions in one line. But they work a different position every day, on the positions that become available, and the line-leader decides where they get assigned. (Cezara, female, Romanian, agency worker)

As the coordinator needed to interact with the agency workers, and as most of these were non-Czech speakers, the coordinators were usually of the same nationality as the workers and spoke (some) Czech so they could interpret when needed. The coordinator was responsible for agency workers’ performance and provided workers with their uniforms. These were colour-coded to distinguish core workers from agency workers. This became key in situations of low production when agency and core workers could end up working next to each other on the same line. The coordinator’s roles certainly confirm the idea of duality of control as elaborated in the factory-production regimes literature discussed earlier as both client firm and agency are exercising control over the workers. The involvement and responsibilities of the coordinator also cast new light on the role of TWAs in relation to production. Commonly, in a triangular employment relationship that regulates the interaction between the client firm, TWA and workers, managerial responsibilities for production lie with the firm and legal responsibilities with the agency (Purcell et al., 2004). However, for agency workers at Foxconn the boundaries between the responsibilities of the agency and the client firm were blurred in that TWAs were directly responsible for organizing, controlling and managing agency workers’ performance on the assembly line. TWAs’ extensive intervention in the labour process resulted in agency workers ‘disappearing’ from the client firm’s view; as a Foxconn top manager summed it up: ‘Agency workers do not work for Foxconn.’

Beyond the factories, dormitories were central to TWAs’ management of migrant labour. In Pardubice the dormitories were located off site and across town, the most important being Hotel Harmony, Veselka, Hurka, Labe and Semtin. These dormitories were previously hotels, army barracks or earlier factory accommodation. Dormitories varied in size, housing between a couple of hundred and a thousand people. Each dormitory was, in the main, rented out to one agency. As TWAs provided workers to several client firms, workers from different industries stayed in the same dormitories. Four workers per room was standard, but the availability of an en suite bathroom and kitchenette differed radically from dormitory to dormitory. At Hotel Harmony and Hurka, for example, rooms were equipped with a bathroom (toilet and shower) as well as a cooking hob. At Veselka this was not the case: on some floors a total of 80 people used two women’s and five to eight men’s showers and on other floors there were no separate showers for women and men. Similarly, at Veselka there was only one kitchen, equipped with two electric hobs and no utensils, per entire floor. Consequently, if workers stayed in a dormitory such as Veselka where there was effectively no real possibility of cooking a warm meal and bringing it to the factory, they were likely to skip meals or eat snacks during their shifts. While agency workers had access to the factory canteen, they paid more for a warm meal (€2 to €3) than did core workers (€0.2 to €1) and, finding it too expensive, preferred not to eat in the canteen.

The allocation of workers to dormitories and their distribution in rooms was also managed by the agencies. In Hotel Harmony, for example, each Sunday when new workers arrived from their countries of origin, Xawax gave the receptionist a colour-coded spreadsheet listing, by room, the workers who were arriving, those who were leaving and those who were switching rooms. Workers were not allowed to swap rooms themselves and the receptionist too was not allowed to move workers between rooms without the approval of the agency. The agency employee in charge of this distribution was known as the ‘coordinator’ for dormitories. He or she allocated workers to rooms on the basis of nationality, maintained order and curbed excessive behaviour such as drinking, partying or bringing in external guests. Additionally, TWA staff organized transport to the factory in smaller or larger vans, or drove workers personally when extra workers were needed on a shift. Dormitories were therefore pivotal for TWAs’ management of migrant labour in the Czech Republic. This finding demonstrates that the dormitory labour regime, previously assumed to be a unique feature of Foxconn’s Chinese factories (Pun and Smith, 2007), is also an essential element of firms’ workforce management practices in the EU. In the Czech Republic, as much as in mainland China, large-scale factory production relies on migrant labour that is organized so as to combine spaces of work and residence.

The overlap of spheres of production and reproduction

Dormitories are fundamental to TWAs’ management of migrant labour as well as their ability to meet Foxconn’s demands for temporary workforce. Dormitories facilitate cross-border labour mobility and provide a place of socialization and exchange of information between workers. This is especially important at the moment of arrival when workers are struggling to orient themselves in a new environment. At the same time dormitories also make it possible for agencies (and Foxconn) to extract additional labour from workers:

When I was in the dormitory the coordinator would come, knock on the door, enter and tell us, ‘Let’s go, there is work.’ He would grab us and we would need to go even if we just finished our shift. He would also wake us up and make us go. (Karol, male, Polish, agency worker)

To escape such forms of pressure some workers moved to private flats where they felt more independent. When workers moved into flats, agencies contributed 3000 Czech Koruna (CZK), approximately €115, towards the rent and the workers put in the rest, around €150–€250. To qualify for the contribution workers must work a minimum of 150 hours per month. During periods of low production, TWAs privileged workers in the flats and assigned them work first but these workers were also more vulnerable than those in the dormitories who did not feel burdened by the accommodation costs:

Here is the thing – last month Xawax sent 200 people home, but they’ve kept the rest of us here at Hurka even though there was no work. They target people who rent, because if a worker does not fulfil their minimum 150 hours quota per month they cannot afford to pay for accommodation. I am not affected by this as Xawax provides for my accommodation here. (Cezara, female, Romanian, agency worker)

The type of employment contract used by the agencies relied heavily on the dormitory system. Workers were initially signed up for a period of 300 hours, which functioned as a probation period, and were then promised a one-year contract. Usually, after the initial 300 hours, workers were simply put on another short-term contract. The promise of a one-year contract served as an incentive to complete the 300 hours that, in periods of low production, could take 2-3 months. During the ‘trial’ period workers were not paid their full wages but given an advance of 1000 CZK (€40) per week. The practice of signing workers on a series of short-term contracts dispels the idea that temporary work leads to permanent employment, and it shows that short-term contracts are the norm for agency workers at Foxconn.

Postponing the payment of wages further tied the workers to the agencies: workers might have been frustrated by their working conditions, dormitories or the lack of work, but they were unwilling to leave until paid. The insecurity produced by fluctuating production and the short notice agency workers were given about their shifts – at best a week’s notice, at worst the same day – increased unpredictability and the idea that, even if there is no work today, there might be work tomorrow so it is best to stay put and remain available:

I work in Foxconn with an agency but the problem is that we don’t work a lot. In January 2012 I worked only 51 hours and I earned 5000 crowns [€200]. Every morning I went to the factory to ask if there was work, but they told me that there wasn’t any for me. With me there were also other hundreds of workers. We are all hired by the agencies and we go in front of the gates and we wait for the boss to call for us. But they call only some ten or so workers, the others wait for a telephone call from the agency or go back to the dormitory. (Konrad, male, Polish, agency worker)

It was not uncommon for workers to have to wait a week in the dormitory without work. Given fluctuating production requirements, the dormitories enabled the agencies and Foxconn to stand workers down for several days without risking a shortage of workers. In this way, TWAs allowed Foxconn to avail itself of a stationary workforce that was under discrete yet constant control of the agencies. Dormitories and flats are therefore key in constructing and maintaining a workforce marked by the feeling of what Gregg (2011) has called ‘work’s intimacy’, namely the anxiety that results from anticipation and being always potentially ready to work. Moreover, as no children are permitted in the dormitories, thereby eliminating disruptions caused by schooling or parenting needs, the dormitories place workers outside the regular cycles of the reproductive sphere and orientate all activity towards meeting the production needs of the client firm. The only kind of reproduction agency workers are allowed is, in fact, manufacturing. This does not imply that workers, either men or women, were childless. On the contrary, and in opposition to mainland China where Foxconn did not employ workers older than 35, in the Czech Republic a number of agency workers were well into their 40s and 50s. Some of them were separated from their children who had remained in the workers’ countries of origin while others had sent for their sons and/or daughters and these too became agency workers at Foxconn. Either way, migrant agency workers were both removed from a home life that might act as consolation between periods of paid work and detached from a possible form of generative community as their non-work sphere was colonized by the employer.

Next to bringing to the fore the interdependence of the productive and the reproductive spheres, a focus on dormitories also makes visible the ways in which migrant labour alters the traditional roles and functions of TWAs. The dormitories can be seen, as Pun and Smith (2007) suggest, in terms of a regime that facilitates extension of management’s control over labour. The best example is perhaps the fact that when agency workers got fired, they lost the right to the dormitory and had to vacate their rooms in one or two days. Contrary, however, to mainland China where workers are hired directly by Foxconn on one- to three-year contracts and work 60 hours per week, in the Czech Republic the majority of agency workers were young EU migrant workers hired on short renewable 300-hour contacts and working intermittent shifts. While TWAs might appear to have an all encompassing control over migrant labour, the paradox is that agencies enable migrant workers’ greater mobility and awareness of working conditions and wages elsewhere. Many migrants previously worked in another EU country and, by relying on the agencies and dormitories they were able to move and find work relatively easily. In the situation where worker mobility is not restricted by state imposed limits to temporary residence and work shifts and employment arrangements are sporadic, dormitories operate as devices that temporarily capture and attach a mobile and transient low-wage European workforce to the firm. Migrant labour alters the scope of agencies’ activities in that agencies take up new roles in the attempt to channel and contain migrant workers’ mobility, in particular through intrusions into their private sphere. The findings suggest then a need to extend beyond a focus on employment practices in the workplace in analysing triangular employment relationships. The situation demands consideration of how the interlocked nature of production and reproduction processes is enabling new modalities of worker exploitation and erosion of worker rights.

Internal subcontracting

Davidov (2004) remarks that the triangular employment relationship fragments the workforce, as core and agency workers work in the same space but do not share the same employer and have different wages, rights and benefits. This separation was visible at Foxconn’s plants where migrant agency workers worked on the assembly line and core workers, who were predominantly Czech nationals, worked in positions such as foremen, group leaders and supervisors. The ways in which the Czech state regulates TWAs’ activities are important in sustaining this fragmentation. It is relatively easy to set up a TWA in the Czech Republic. According to the representative of the Ministry of Labour, one needs to be at least 23 years old, without a criminal record, have three or five years of working experience and obtain a permit issued by the Ministry. There is no need for an initial capital investment, only the payment of a 50,000 CZK administrative fee (€2000). Next to the relaxed prerequisites in setting up a TWA, the Czech state also permits TWAs to contribute up to 3000 CKZ towards workers’ housing and it lifted the ceiling that limited agency workers to a maximum of 20 per cent of the total workforce.

These incentives enable TWAs to widen the scope of their actions. The result is a situation of what Vosko (2009) calls ‘ambiguity’ between the employment and commercial spheres in which agency workers find themselves because the agreement they have with the TWAs is contingent upon the existence of a commercial contract between client firm and the TWAs. In defining the relation between the client firm and the agency as a business contract between two participating firms, the state leaves broad scope for actions that in turn enable firms to circumvent the statutory employment law (see Sporton, 2013). This circumvention is best seen in the rollover of temporary contacts:

I was on a six-month contract and I was happy with that. Now agency is renewing my contract monthly although I have been here for over two years. After one month we sign the contract for three months, and after three months we sign it for six months. Every year there is a different company showing on the contract. (Izabela, female, Polish, agency worker)

The practice of having workers sign multiple contracts needs to be seen in the context of recent changes to the regulation of TWAs. According to the EU Directive on Temporary Work, effective from 1 October 2011, after 12 weeks on the same job and for the same hirer, an agency worker qualifies for the same basic employment and working conditions as if recruited directly by the client firm. Agencies manage to circumvent this condition by ending workers’ contracts before completion of the 12 weeks and re-engaging the same worker on a similar contract with another branch of the same agency, usually registered as a company.

The ambiguity around business contracts also permits TWAs to expand by incorporating functions of the client firm. This can be seen in the case of internal subcontracting, where each agency manages its ‘own’ assembly line:

The effort is to make every agency separate. When the production was at the highest, one whole assembly line was managed by each agency, say Xawax, but now that production is lower, permanent workers are complemented by agency workers. (Odval, female, Mongolian, core worker)

As the client firm and the subcontractor are both effectively manufacturing the same product, Neo (2010: 1015) suggested that internal subcontracting is a strategy for disguising an employment relationship as a business relationship. The arrangement in which suppliers become subcontractors and take greater ownership of production units in a plant, including direct control of contract labour, as in the case of Volkswagen’s factory in Brazil researched by Abreu et al. (2000), points to the danger of subcontracting producing vertical divisions within a factory workforce and preventing trade union bargaining at the plant level. Such vertical division between core workers and agency workers was clearly discernible at Foxconn plants and it was compounded by the fact that the trade union was not much interested in the condition of migrant workers, largely because their turnover was rather high and they did not speak Czech (with the exception of Slovak workers). This lack of interest seemed to originate in the fact that the trade union’s concerns were framed primarily by a national focus and that the union pursued a narrow unionization strategy in favour of core workers whereby agency staff absorbed the impact of fluctuation of demand for labour:

The introduction of agency employment into the Labour Code proves a problem for the trade union to look after the interest of core workers and at the same time make sure that agency workers’ rights are not taken away from them. If a firm loses an order then the agency workers are being let go first and, although we can tell core workers that we’ll protect their place, in reality we are facing the situation where core workers might get punished next. Our representative could also represent agency workers, but the danger then is that we could have a situation where the workforce is 90 per cent agency workers, especially in areas where the job is relatively simple to do. (Radek, male, Czech, trade unionist)

Compared to the Volkswagen factory in Brazil, the specificity of the Foxconn plants lies in the fact that the subcontractors are not component suppliers but rather TWAs that have not entered into a joint enterprise with Foxconn and have no domain knowledge in electronics. TWAs exclusively supply labour on a large scale, and it is precisely the fact that these are migrant workers, employed, recruited and housed by the agencies, that permits TWAs to gain ground inside the factories and increasingly take on direct management of production. Within this changed relationship between the client firm and agencies, employment irregularities concerning agency workers become institutionally invisible and ‘disappear’. This ‘disappearance’ is best illustrated by the fact that the local Labour Inspectorate considered subcontracting and its potential irregularities as falling beyond the scope of its activity despite agency workers’ structural indispensability for Foxconn’s production process.