Foxconn gives workers second pay rise

Staff gather at the company sign outside Foxconn's plant in Shenzhen on 26 May 2010 Foxconn workers will receive the pay hike after three months' probation

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An electronics company hit by a string of suicides has raised wages in China - for the second time in less than a week.

Foxconn will increase salaries at its Shenzhen plant by nearly 70% from as early as 1 October, if workers meet certain conditions.

This is in addition to last week's announcement that wages would go up by 30%.

There have been 10 suicides at the Taiwan firm's Shenzhen factory in 2010.

Shares down

A statement from Foxconn, which makes Apple's iPad and iPhone, as well as other top brands, said the second pay rise would lessen the pressure on workers to do overtime.

"While overtime work was always voluntary, this wage increase will reduce overtime work as a personal necessity," the statement said.

It said wages for production line employees at the firm's Shenzhen plant would rise from 1,200 yuan ($176, £122) to 2,000 yuan.

iPad and iPhone (file image) The firm makes products for Apple and other technology brands

To get that pay rise, workers first have to pass a performance test lasting three months.

New employees will be put on probation for the same amount of time before getting the increase.

Pay increases for workers at Foxconn's other Chinese plants - it employs more than 800,000 people in China - will be announced from July 1.

"This wage increase has been instituted to safeguard the dignity of workers," said Foxconn's founder and chairman, Terry Gou.

This latest announcement is in addition to last Wednesday's pay rise of 30% at all its factories in China.

Foxconn, the trading name for Hon Hai Precision Industry Company, declined to say why there have been two large wage increases in less than a week.

"I can't comment on that," said a company spokeswoman.

The firm has been hit by a series of suicides this year.

Ten people have killed themselves at its plant in Shenzhen, in southern China, which employs about 400,000 people. Three more apparently tried to take their own lives.

Mr Gou said he was having trouble sleeping at night - and dreads an after-hours phone call, fearing it will be another suicide.

Increasing pay is just one method to make sure workers are more "stable and comfortable".

Foxconn has also employed psychiatrists and installed safety nets on buildings.

While the pay rise is good for workers, investors took a different view.

The company's shares fell sharply on the Taiwan stock market following the announcement of the second pay rise.

Trading in the company's shares on the Hong Kong Exchange was suspended on Monday.

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