Ford India sets Aug 10 deadline for employees to conclude severance talks

Ford India had increased its offer from 87 days to 124 days of average equivalent wages per completed years of service

The Ford India management on Wednesday informed the employee union of its Maraimalai Nagar plant near Chennai to conclude the negotiations on severance package before August 10, failing which the company will be forced to launch its ‘last offer’ as a voluntary separation scheme. 

In a letter written to the Chennai Ford Employees Union (CFEU), the company termed it as a last attempt to conclude severance negotiations. The company had increased its offer from 87 days to 124 days of average equivalent wages per completed years of service, subject to a minimum amount of Rs 30 lakh and a maximum cap of Rs 80 lakh.

“This offer is significantly higher than the compensation prescribed under the Industrial Disputes Act of 1947 and any market benchmarks. Company has already offered to continue the current medical insurance till March 2024,” the letter said.

The company has already completed 43 meetings with the Union and 17 meetings in front of the labour authorities. In a meeting held on July 22, the Union demanded 185 days of average equivalent wages per completed years of service calculated on the basis of 26 days per month. This included a minimum package of Rs 50 lakh and a maximum cap of Rs 80 lakh. The company had announced in September last year that it was shutting its factories in India.

Ford India in the letter claimed that the demand by the Union will be in the range of 214 to 295 days of equivalent wages per completed years of service and is not significantly different from the earlier unreasonable demand by the Union for 295 days. The automaker had stopped manufacturing vehicles at the unit on July 20 and manufacturing by the customer service division (FCSD) will be over by August 31.