Tata Motors' Pune wage pact may improve industrial relations: Experts
By Team Legistify / 2017-03-31

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Tata Motors may not be the first in the Indian automotive industry to ink a wage agreement with factory workers that is performance linked (it is a common practice in the two-wheeler industry), however, with the recent wage settlement at Pune, the company has definitely set a precedent for others. Experts feel that this paves way for better industrial relations and a younger workforce is likely to feel more aligned to such an approach.

On Tuesday, Tata Motors and the Pune workers' Union, which covers around 6,400 employees, have signed a wage settlement for three years effective from September 1, 2015. It will be valid through August 31, 2018.

In this, the total wage package has been bifurcated - a fixed rise of Rs 8,600 (in the ratio of 72 per cent, 15 per cent and 13 per cent for a period of three years) and Rs 8,700 non-actual that is a total of Rs 17,300.

Sources indicated that after the proposed hike (following the bifurcated structure), around 10-15 per cent of the workers' salaries would be directly linked to their performance.

Industrial relations experts said that this could be linked to volume of output, quality parameters, attendance, rejection rates etc. A senior official in a leading four-wheeler major based out of Delhi said that it is easier to quantify performance objectives and achievements in case of blue collar workers on the shop floor.

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