Ashok Leyland Ltd, flagship company of the Hinduja Group, has inked a three-year wage settlement pact with an employees’ union, covering over 3,000 workers at its Ennore, Chennai plant.

The company reached the wage-settlement agreement with the Ashok Leyland Employees Union, led by R Kuchelan, earlier this month.

The truck maker will also introduce an early retirement scheme to align its workforce with poor market conditions.

The deal provides for a weighted average hike of ₹9,450 per worker. Kuchelan told Business Line the hike ranges from ₹8,626 to ₹10,007, depending on the service. There are also a host of other benefits relating to pension corpus, incentives, family welfare and allowances.

In 2010, the union had finalised an average hike of ₹7,300.

Ashok Leyland’s wage cost is equivalent to approximately 10 per cent of its business, Kuchelan said.

The company is considering a voluntary early retirement scheme to bring down the surplus workforce in line with the production and low sales.

The union will cooperate with the management decision, he added. Over 400 workers will retire in the normal course by March 2015 and can consider opting for the early retirement scheme. They will be paid their wages and incentives in full.

Last December, Ashok Leyland had announced a voluntary retirement scheme for executives, and over 500 had opted for it.

The continuing slowdown has hit the commercial vehicle industry.

The company reported a net loss of ₹334 crore for the first nine months of the current fiscal.

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