CHENNAI: In a deal that signifies the growing importance of its Chennai facility to its comeback plans, Finnish handset maker Nokia entered into a wage pact that could see salaries of about one-third of its employees going up 200%.
Five sources ET spoke to said that about 3,000 employees of the total 9,000 working at the facility will now earn Rs 21,000 a month, up from the Rs 7,000 they were taking home earlier. Other employees will also receive hikes of varying degrees.
The three-year accord, which was signed in the presence of a CITU ( Centre of Indian Trade Unions) official, also indicated the rising clout of the Left-backed trade union in Chennai’s Sriperumbudur manufacturing belt, where other multinationals like Hyundai, Dell and Caparo have set up factories.
The agreement, signed recently in the presence of assistant labour commissioner Dharmaseelan and A Soundararajan, state general secretary of CITU, is for the period April 1, 2013 to March 31, 2016.
“There were around 20 rounds of negotiations that took place at the factory with the company officials, local office-bearers and CITU. Finally, on March 4, we signed an agreement,” said Soundararajan.
Nokia, once the undisputed leader in mobile phones sales, has been steadily losing market share to rivals like Samsung and Apple who have dominated the smartphone segment in the past couple of years. It is hoping to win back some of the lost ground through its Lumia series of smartphones that it introduced recently. It is also battling a tax claim by Indian authorities, who allege that the company has defaulted to the tune of Rs 3,000 crore by improper accounting practices.
“As policy, we do not share specific details of wage agreements between Nokia and its employees. That said, we would like to confirm that Nokia India Private Ltd and Nokia India Employees Union, an independent union with no affiliation to central trade union, have entered into a long-term wage settlement that was signed recently in the presence of assistant labour commissioner Dharmaseelan. A Soundararajan, MLA and president and consultant to our trade union, represented the employees union,” said Nokia in an emailed response to ET.
Sources told ET that employees will now make Rs 3,500 a month in the first year of employment. A dearness allowance of 300 will be given to them in the second year, and from the third year onwards, the salary will be hiked to Rs 10,800 a month.
Besides the wage hikes, Nokia has also set up a death relief fund through which 5 lakh will be given to the family of an employee dying from natural causes.
The Nokia plant in Chennai was set up in 2006 in Sriperumbudur. Over the years, Nokia has invested over $330 million (about Rs 1,800 crore now) in scaling up manufacturing operations there. The plant, Nokia’s largest handset manufacturing facility anywhere in the world, employs over 9,000 people, 55% of whom are women. (Source: ET)