Ford India and works reach settlement, announce final severance package | The Financial Express

Ford India and works reach settlement, announce final severance package

The OEM says it “continuously made efforts to negotiate a fair and reasonable severance package” and has now finally arrived at a “settlement with the Union” in India.

Ford India and works reach settlement, announce final severance package
Ford India finalises severance package for Chennai plant workers (Representative Image)

American carmaker Ford which exited India on September 9, 2021 as part of its global restructuring plans was struggling to find common ground with its employees.

The OEM says it “continuously made efforts to negotiate a fair and reasonable severance package” and has now finally arrived at a “settlement with the Union” in India.

As per the agreement Ford India will revise the final severance settlement to an average equivalent of 140 days of gross wages per completed year of service from the ongoing offer of 130 days. It will further offer an additional one-time lump sum of Rs 1.5 lakh in the final settlement.

The cumulative severance for each employee will range from a minimum amount of Rs 34.5 lakh with a maximum cap of Rs 86.5 lakh (i.e., translating to an average of Rs 44.8 lakh per employee).

The revised settlement translates to an average of about 5.1 years / 62-month of salary for each employee (from a minimum of 3.9 years i.e., 47 months to a maximum of 8.7 years i.e., 105 months).

Ford India says the formal settlement agreement is planned to be executed by September. The company will notify employees of the next steps and looks forward to completing the exit formalities by September 30, 2022.

Furthermore, the American carmaker says it will continue to pay wages to all employees until September 30, to support the exit formalities.

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