Even as it finds itself in the midst of the worst automobile slump in the last two decades, commercial vehicle manufacturer Ashok Leyland is set to dole out Rs 107.56 crore in employee bonuses by the end of the month. Sources close to the development tell CNBC-TV18 that the decision has been taken after multiple round of negotiations between the company and labour unions.
“We have reached an agreement with the management, which will see each of Ashok Leyland’s 6,146 employees across the company’s eight plants get a bonus totalling to Rs 1.75 lakh per employee,” said a highly placed source close to the development on the condition of anonymity, “The employees have recently agreed to the sum, and the bonus agreement will be inked with the management on September 11.”
This agreement now means that Ashok Leyland’s 107-rupee-crore bonus is approximately 5.42 percent of its FY-19 net profit of Rs 1,983 crore. In August, the company’s factory employees at its Chennai plant went on strike demanding a 10 percent bonus on the company’s FY 19 profits. The company was only willing to part with 5 percent. “We are obviously not entirely happy, but have decided to settle for 5.42 percent of the company’s profits from last fiscal,” the source added, speaking exclusively to CNBC-TV18.
CNBC-TV18 reached out to Ashok Leyland for a comment. Responding to our email, a company spokesperson said, “We will comment (on the bonus settlement) as soon as the agreement is signed.”
Confirming that the talks between Ashok Leyland management and labour unions had reached its conclusion, R Sampath, Vice President, Working People’s Trade Union Council told CNBC-TV18: “The fact that these employees will now get well over a lakh in bonus is certainly good news.” He added: “They wanted more money, but under the circumstances, decided to settle for what the company was finally willing to offer them.”A closer look at the circumstances that Sampath refers to, make for interesting reading. On Friday, Ashok Leyland told employees at its Chennai plant, located in the city’s Ennore suburb, that the company had announced five non-working days between September 6 and 11 owing to tepid demand and rising stock of BS-4 vehicles, which need to be sold by March 31, 2019. There have been reports that more non-working days at other Ashok Leyland plants are to be expected in the next few days. For the moment though, it would seem that each of Ashok Leyland’s factory workers are 1.75 lakh rupees richer.