US carmaker Ford said the company management and its Chennai car factory union - Chennai Ford Employees Union (CFEU), representing 2592 permanent employees, on Friday executed a settlement agreement, thereby concluding the negotiations on the severance package.
The company has been working on finalising settlement package for workers after its announcement in September 2021 to shut down its almost three-decade-long car production operations in India. Last week, Ford India said that it reached a settlement with CFEU on the final severance package.
“The severance settlement agreement, signed between Ford and the Chennai Union today, is an important milestone and a win-win for everyone involved, said Balasundaram Radhakrishnan, Transformation Officer, Ford India
The final settlement package (an average equivalent of 140 days of gross wages per completed year of service and an additional ₹1.5 lakh lump sum per employee) signed on Friday translates to an average of about 5.2 years / 62-month of salary for each employee (from a minimum of 4.1 years i.e., 49 months to a maximum of 9.0 years i.e., 108 months).
The last date of employment for all employees will be September 30, 2022 and the company is notifying employees of the next steps and will be looking to complete the exit formalities,
“Keeping the upcoming festival month in mind, the Company, as a goodwill measure, has also decided to pay an additional amount equivalent to 1 month of gross wages as a sign-on benefit for employees who complete the exit process by October 14, 2022. We thank our employees in advance for their patience and support in the process and remain grateful to the Tamil Nadu Govt and Labour Officials for guidance,” he added.