Ford employees hope for better severance package at tripartite meeting on September 13

Employees at the factory of auto major Ford here have set their expectations for a positive outcome on the tripartite talks scheduled to be held next week to discuss the severance package offered by the US-based automobile manufacturer. The development comes in the backdrop of the recent announcement by Ford India which had said that it has continuously made efforts to negotiate a ‘fair and reasonable’ severance package with the union, spanning 68 meetings including discussions with senior government officials soon after the company’s business restructuring exercise was announced in September 2021.

Maintaining that the company always cared for its employees, Ford said its attempts to negotiate a fair severance package did not yield results because of the union’s ‘unreasonable’ demands.

Responding to it, Ford India Employees Union representatives said the company has left out the tax deduction on the severance package as the employees would be receiving a meagre amount despite serving for several years.

“The factory has been shut since August 31 and so far no employees are present at the unit now. Only businesses like after sales (service), sale of parts are being done now. We are not even allowed to enter the factory. They are just asking us to accept the offer they have made,” a union representative said.

“They have also sent a copy of the severance package settlement as a courier to the residences of the employees so that the family will also accept it,” an employee, who has been serving for 19 years at the Maraimalai Nagar factory situated about 50 kilometres from here, said.

On the severance package, he said very few senior employees would receive a good package of about Rs 80 lakh and for people like us who had served for nearly 20 years around Rs 44 lakh but these amounts are without the deduction of taxes.

“Our main point is that the severance package announced by the company is not acceptable. We are discussing on September 13 in the presence of district labour authorities on these issues,” the employee said.

According to Ford, “the company has decided to roll out the final severance settlement offer to employees which on average is equivalent to 130 days of gross wages per completed year of service.”

The final severance settlement offer communicated by the company exceeds what the applicable statutes call for and is higher than the industry benchmarks, the company said.

“With a cumulative average severance of Rs 41 lakh per employee (from a minimum amount of Rs 33 lakh and a maximum cap of Rs 85 lakh), the final severance settlement offer translates to an average of about 4.6 years-56 month salary for each employee, assuring employees with adequate financial cushion and adequate time to decide their next action,” the statement said.

The company strongly encourages employees to accept and sign up for the final severance settlement offer, valid from September 5, 2022 to September 23, 2022, for their own and family’s future, the statement said.

Ford also clarified that post the deadline of the severance package, if the company were to retrench workers, the employees would only be entitled to severance pay of 15 days per completed year of service.

“The company continues to provide the employees without placement support as previously communicated,” it said.

Referring to it, the employee said, “The intention is for better pay since the future is not bright for people like me. I am 39-years-old and have to take care of my family. There are a lot of people like me (facing this issue). Discussions would be held at the tripartite meeting hoping for a better package”.

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