Ford responds to workers' protest with non-negotiable severance package

Monday evening deadline is set, possibility of legal action against workers indicated

In a recent Ford India workers' strike development, the company gave the employees till Monday evening to accept a "non-negotiable" severance package. An early unit closure and legal action against employees were also indicated if they don't resume production from June 14.

A union leader told Business Standard that the notice was issued without informing the union and without their consent. They are hence not ready to accept it.

According to the revised severance package, employees were awarded 115 days of gross pay for each year of service. This amount is much larger than the statutory severance package, which is 15 days of salary for each year of service.

Also read: Ford employees go on a strike demanding better compensation package

For each completed year of service, the revised package comprises an ex-gratia sum equal to 87 days of last drawn gross wages (May 2022) and a set amount of Rs 50,000. In addition, benefits equivalent to a lump sum of Rs 2,40,000 were granted as well as the maintenance of their current medical insurance until March 2024.

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

Ford also indicated that only permanent employees who resume production on June 14, 2022, and help the company meet its production schedule would be eligible for the package.

Ford, in September 2021, announced that it would shut down its factories in India. This would impact a total of 4,000 employees. At the Maraimalai Nagar factory in Tamil Nadu, around 2,000 workers have been on strike for 14 days, seeking a better severance package.