Ford makes final severance offer to workers of its Chennai plant, union rejects it
The company has more than 2,000 employees on its payroll. Ford said the package gives employees adequate financial cushion and time to decide on their next course of action.
CHENNAI: The Ford Motor factory at Maraimalai Nagar on Monday rolled out its final severance offer for its employees --- a package equal to 130 days of gross wages for each year of service completed. The company’s employee union, however, has rejected the offer.
The cumulative average severance pay works out to Rs 41 lakh per employee (a minimum of Rs 33 lakh and a maximum of Rs 85 lakh). This translates to an average of about 4.6 years/56-month salary for each employee (from a minimum of 3.5 years or 43 months to a maximum of 8 years or 100 months).
The company has more than 2,000 employees on its payroll. Ford said the package gives employees adequate financial cushion and time to decide on their next course of action. A Ford spokesman said that employees are being encouraged to accept and sign up for the offer valid from September 5, 2022, to September 23, 2022.
“Those employees who take the final severance settlement offer will be paid wages till September 30, 2022,” Ford said in a statement. “Post deadline, if the company were to retrench employees and pay the statutory compensation, the employees will only be entitled to severance pay of 15 (fifteen) days per completed year of service. The company continues to provide the employees with outplacement support as previously communicated,” the company spokesman said.
However, Ford employees Union has rejected the offer saying that the union was not consulted while working out the package. One of the office-bearers of the union said a meeting is scheduled with labour department officials on September 13 to renegotiate the package.
Negotiations failed because of unreasonable demands: Ford
Another office-bearer said they have asked for a 185-day severance package. The current package favours those with nearly 10 years of service as they will be eligible for a 130- day package. “Those who have less than 10 years of service are getting a raw deal,” he said.
Ford spokesman said that since the announcement of business restructuring last September, the company has continuously made efforts to negotiate a fair and reasonable severance package with the union, spanning 68 meetings, including meetings with labour authorities and senior government officials.
“Unfortunately, the company’s attempts to negotiate a fair package have not yielded results because of the union’s unreasonable demands (of an average of 215 equivalent days of wages per completed year of service).
The union has failed to recognise that no company which has decided to stop production on account of significant accumulated losses and no sustainable path forward can meet such demands,” he said.
Offer valid from Sept 5 to Sept 23
Post deadline, if the company were to retrench employees, they will only be entitled to severance pay of 15 (fifteen) days per completed year of service, says Ford. Labour department talks on September 13