Employees at the Chennai plant of Ford India have been on strike from May 30 demanding better severance package.

Employees at the Chennai plant of Ford India have been on strike from May 30 demanding better severance package.


Ford India has informed its employees at the Chennai plant that in case employees do not resume production from June 14, there is a high likelihood that the company will be required to call off production of remaining export volumes and bring vehicle production to a close.

It is learnt that the company has very limited export production left to complete. According to sources this has been put up on the company’s notice boards in Chennai and copy has been sent to the unions and the labour department. Employees at the Chennai plant have been on strike from May 30 demanding better severance package.

A view of Automobile manufacturing Industry unit,Ford India Ltd at Maraimalai Nagar in Chengalpattu district.
| Photo Credit: VELANKANNI RAJ

The company in its notice has said: “In light of the present circumstances, the company would like the permanent employees, who are willing to support production, know that the company is inviting you to opt for its best offer on severance package which is approximately equal to 115 days of gross wages for each completed years of service (on an average). As you may note, this package is significantly higher than the statutory severance package (i.e. 15 days of wages for each completed years of service).”

It is learnt that the details of the package are – an ex-gratia amount equivalent to 87 days of last drawn gross wages as on May 2022 and a fixed amount Rs. 50,000, both being for every completed year of service at actuals. Benefits equivalent to a lumpsum amount of Rs. 2,40,000 and current medical insurance coverage will continue until March 2024 as per the current policy terms and conditions. The package is in addition to the statutory benefits of gratuity and leave encashment as per applicable terms and conditions. The years of service will be calculated from the date the employee joined the company as a trainee (not apprentice).

Ford has clearly indicated that the package announced would only be available for permanent employees who resume production from June 14, 2022 and support the company in completing the production schedule. Employees who wish to opt for the above severance package are required to submit their request for severance package by logging in to an online portal (link has been shared to employees on the notice board), and filling the form provided in the portal, by or before 5 PM on June 13, 2022. If employees do not opt for the severance package, company will be forced to take legal steps/proceedings.

“For employees who continue to engage in an illegal strike, or undertake unauthorized/ unlawful activities on company premises, company shall take appropriate actions, including imposing loss of pay as per the Certified Standing Orders and applicable legal provisions,” the company said in its communication to the employees.

On September 9, 2021, Ford had announced that it would cease vehicle manufacturing operations at its Chennai plant by June 2022 on account of significant accumulated losses and inability to find a sustainable path forward. Currently, Ford’s Chennai plant has around 2,600 permanent hourly employees across vehicle assembly and powertrain operations

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