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Tata Steel and Tata Workers Union Agree on Annual Bonus
09/08/2008 - Tata Steel and the Tata Workers' Union sign Memorandum of Settlement for the annual bonus for the accounting year 2007-2008.
Tata Steel and the Tata Workers' Union have signed a Memorandum of Settlement for the annual bonus for the accounting year 2007-2008. The Memorandum was signed on Sep. 5, 2008
The previous Memorandum of Settlement, dated August 20, 2002, was valid for 5 years, after which it was extended for an additional year for the accounting year 2007-08.
In accordance with the Memorandum, the Annual Bonus for the accounting year 2007-08 is to be calculated with 50% based on Production and 50% based on Profitability. Based on this calculation, the Annual Bonus works out to 9.26% on Production and 10% on Profitability, thus making a total of 19.26% of salary / wages (Basic and DA) paid for the year 2007-2008.
However, on the request of the Union and in consideration of the company’s centenary year and satisfactory performance during 2007-08, and also in order to keep up the morale of the employees, the parties agreed to round off the bonus percentage for the accounting year 2007-08 from 19.26% to 20% of salary/wages (Basic and Dearness Allowance) paid for the year.
Most of the steel company employees are drawing salary/wages higher than the limit laid down in the Payment of Bonus Act, 1965, and are thus not eligible for bonus under the Act. However, based on old traditions, the company plans to pay the bonus to all employees in the unionized category.
At 20% bonus, the minimum and the maximum annual bonus payable will be Rs. 9,154/- and Rs.75,372/- respectively. The total payout on account of annual bonus for the year 2007-2008 at Jamshedpur (including Tubes) will be approximately Rs 64 crores. However, the amount being paid across Tata Steel (India operations) is Rs. 113.8 crores for the year 2007-2008.
Mr. B. Muthuraman, Managing Director, Tata Steel and Mr. Raghunath Pandey, President, Tata Workers Union, along with senior company executives and union office bearers signed the Settlement at Jamshedpur in the presence of Mr. R. P. Singh, Conciliation Officer and Deputy Labour Commissioner, Jamshedpur.
