Ford India lines up 'non-negotiable' severance package for workers

Warns early closure of unit, legal action against workers starting June 14

Giving a fresh twist to the Ford India employees' strike at the firm's Maraimalai Nagar factory, the company has set the deadline for Monday evening for workers to accept a ‘non-negotiable’ severance package it is offering. It also indicated the possibility of legal action against workers from June 14 (Tuesday) and warned of early closure of the unit, before completing remaining export volume production.

For the past 14 days, some 2,000 employees at the unit had struck work, seeking a better package from the company. Under the new package, for which the acceptance deadline is Monday, employees were offered 115 days of gross wages for each completed year of service. The company claims the package will be significantly higher than the statutory severance package or 15 days of wages for each completed year of service. One of the Union leaders told Business Standard that the workers are not ready to accept it, as it was offered without the Union's consent.

Through a notice to the employees, the Union it was told that the package will be applicable to only those who resume production on June 14 (Tuesday) and support the company in completing the production schedule. Employees who wanted to opt for the package were asked to inform their acceptance to the management by 5 p.m. on June 13.

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

“The above package is not negotiable, and the terms of this notice shall not be construed as forming part of any service conditions. If employees do not opt for the severance package, the company will be forced to take legal steps/proceedings,” the notice added.  

Ford Motor Company announced in September last year it was shutting its factories in India. The next round of talks between the Union and the management is on June 14, the date on which the company is intending to restart production. As protests are happening within the plant premises, employees were informed that only those who are willing to support production will be allowed entry to the factory area from Tuesday.  The company also warned about taking appropriate actions against those who continue with the ‘illegal strike’ within the factory premises, even making loss of pay option applicable.

“The Company has very limited export production left to complete. In case employees do not resume production from June 14, there is a high likelihood that the Company will be required to call off production of remaining export volumes and bring vehicle production to a close,” the information to the employees added.