 "Nokia suspends work at India facility")
The move comes nine years after Nokia began manufacturing at the facility.
Suspension of work at the plant follows Microsoft terminating the transitional services agreement for this facility. Initially, the factory was to be transferred to Microsoft, which had acquired Nokia’s devices and services business globally.
More From This Section
However, it was left out of the deal, as the Income Tax Department, after slapping a Rs 21,000-crore tax notice against the company, had frozen it. Subsequently, the Tamil Nadu government had issued a Rs 2,400-crore sales tax notice.
Both the cases are pending in court.
Sources say other factors that contributed to the suspension of work include poor planning by Nokia, the end of a tax holiday for the factory, lack of support from the government here and the Vietnamese government offering major incentives.
Meanwhile, the company’s management and most of the 900-odd workers at the factory had arrived at a new severance package, Rs 1.7-2 lakh higher than the voluntary retirement package announced by the company in April this year, employees said.
“We can confirm constructive discussions with union representatives and the labour commissioner have resulted in an agreement on a financial package for personnel at the Chennai factory,” said a Nokia spokesperson. The company declined to share the details of the financial package.
Workers said the severance package was decided at a tripartite meeting on Thursday between the Nokia India Thozhilalar Sangam (the workers’ union), the management, and the labour department.
Prabhu, general secretary of the workers’ union, said now, the workers would be given a severance package of Rs 6.8-10 lakh each, depending on their tenure at the company.
At a general body meeting of the workers’ union on Friday, most workers accepted the settlement scheme. The meeting lasted about three years and was attended by about 400 workers. Prabhu said 360 of the workers had agreed to the new package, while a small section voted against it, saying the company should also give a written assurance that in case the factory was reopened and the tax dispute resolved, they should be preferred for jobs at the plant.
The workers also requested the government to provide tax relief for the money they would be given. If an employee was given Rs 9 lakh as compensation, about Rs 1.5 lakh would go as tax, said a worker.
According to the workers, the company has said the workers will either have to accept its offer or go for a settlement according to government norms. The norms state the workers will get 15 days’ salary for each year served at the company, less than the amount offered by the company.
Some workers said companies that didn’t have unions weren’t offering them jobs because they had been employed at Nokia, which had a workers’ union.
- Dec 1, ‘04: Nokia announces decision to set up a plant in India
- Apr 6, ’05: Signs MoU with the Tamil Nadu govt to set up the plant in Sriperumbudur SEZ and invites seven of its partners to invest. Initially, it commits investment of about $150 million in five years
- Jan 2, ‘06: Plant starts commercial production of handsets
- Mar 11, ‘06: Sriperumbudur facility inaugurated by Finland PM. Factory starts with low and mid-range GSM handsets
- Jun ‘09: Factory edges past China as a unit-wise volume producer of Nokia cellphones and becomes Nokia’s largest cellphone manufacturing facility in the world