Ford hikes package offer to 121 days for Chennai workers supporting production

Ford hikes package offer to 121 days for Chennai workers supporting production

5 Jul    Finance News

Car major Ford India has increased the equivalent average days in its severance package offer from the earlier 115 days to 121 days for employees who are supporting production at the Chennai plant, in a bid to ensure timely settlement for all employees by July 31.

The company has requested the workers’ union to engage in a dialogue without any pre-conditions.

In a statement to employees, Ford India said it appreciates workers who have supported production since June 14, based on which Ford has extended the production schedule till July-end.

The company had also announced that it would protect the wages and employment of those employees who are reporting to work/ supporting production until July. It had earlier said that for employees continuing to be on an “illegal strike”, loss of pay remains in effect since June 14.

The company had scheduled to close the factory by the end of the second quarter of 2022, that is by June 30, as part of its India manufacturing exit plan.

The company said it remains committed to achieving a fair and balanced outcome on the severance package. “The company looks forward to a constructive discussion with union office-bearers to ensure a timely severance package settlement for all employees achieved by July 31, 2022, and remains grateful to Tamil Nadu government’s labour office for their continued guidance and support,” the statement said.

The Ford management had offered a compensation package with 115 days’ gross wages for each completed year of service. The company had claimed this would be significantly higher than the statutory severance package or 15 days’ wages for each completed year of service.

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However, only around 50% of the 2,700-odd employees at the Chennai plant opted for the package, while the rest continued the strike which started when Tata Motors decided to take over Ford’s Sanand plant at the end of May. The workers resorted to a sit-in strike for almost two weeks seeking a better compensation package in the event of the plant’s closure.

On June 9, Ford came out with the compensation package and extended the deadline to accept it from June 14 to June 18, while partially resuming production of the EcoSport for the export market.

The package includes an ex gratia amount equivalent to 87 days of last drawn gross wages (May 2022) and a fixed amount of `50,000, both for every completed year of service. In addition, benefits equivalent to a lump sum amount of `2,40,000 and continuation of current medical insurance until March 2024 were offered. The cumulative amounts for the components will be subject to a minimum of `30 lakh and a maximum cap of `80 lakh.

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