Car maker Tata Motors Limited has entered into a long-term wage settlement (LTS) agreement with the labour union at its Sanad facility in Gujarat.

This is the second such LTS agreement since the company’s Sanand car factory had faced a month-long workers’ strike during February-March 2016. Signed between the company and Tata Motors Sanand Union, the new LTS provides special additional increase in the salary and a new performance-linked scheme.

The earlier settlement had ended in September 2020, while the new LTS agreement will be effective for a period of 3 years starting August 2021 to July 2024, the company informed in a statement.

The new performance linked scheme is based on global parameters of HPeV (Hours Per Equivalent Vehicle), quality & safety, the company claimed adding that the scheme had been well received by the union.

In a statement, Ravindra Kumar GP, President & Chief Human Resources Officer, Tata Motors said, “Tata Motors shares cordial working relationship with workers and members of its internal Union. We have signed the second long term wage settlement at Sanand plant.”

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“We aim to achieve higher and challenging productivity levels with the launch of new HPeV based productivity scheme. The union is very supportive and forward looking in terms of long term welfare of the workmen and at the same time warranting and supporting gains for the company in terms of productivity, quality and safety through this wage settlement. I personally congratulate all who were involved in this settlement,” he said.

The company informed that the new LTS agreement signed on Saturday, includes the total wage package allotted at ₹8,800 for 3 years with 62 per cent, 20 per cent and 18 per cent amount accruing every year. A special additional increase of ₹1,800 is also extended in the same proportion.

“Despite a challenging business situation in the past, the company has also provided an increment for the past 10 months on the request of the union,” it added. The annual bonus linked to plant performance covering all permanent workers was also agreed upon. The Self Directed Teams (SDT) concept ownership by the workmen was major highlight of this settlement, it added.

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There are other benefits too such as housing loan subsidy, amenity loan and other facilities, like block closure days up to 30 days per year were mutually agreed. Tata Motors shares traded in red at ₹278.5 on Monday, down 1.66 per cent over previous close on BSE.

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