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Over 300 Workers Lost Jobs in Ford-to-Tata Transfer in Gujarat Auto Plant

Neelam Gaur |
“The retrenchments are illegal,” say Unions, Ford denies allegation.
More than 300 Workers Retrenched by FORD Motors During Employment Transfer with TATA Motors

Image Courtesy: Wikimedia Commons

New Delhi: Two years ago, in September 2021, US automobile major Ford Motors announced its manufacturing units’ exit from India. However, it continues to provide aftermarket service and support to its customers in India. Its two manufacturing units were based out of Maraimalai Nagar, Chennai and Sanand, Gujarat. The company cited a $2 Billion loss in 10 years as a reason for its exit.

Subsequently, Ford India Pvt. Ltd (FIPL) sealed a deal with Tata Passenger Electric Mobility Limited (TPEML), a Tata Motors subsidiary for Sanand, Gujarat. The agreement came into existence in August 2022, and a complete acquisition occurred on January 10 this year. Tata Paid Rs 725.7 crore to acquire the Sanand plant. As per the reports that time, workers of the Sanand plant had also been transferred to Tata with the same terms and conditions of employment.

According to workers’ association representatives, Ford Motor company laid off almost 350 workers who had put forward their demands.

However, a representative of Ford India, in response to the Newsclick report, has denied the allegation pertaining to illegal retrenchment and maintained that everything was done as per applicable law.

“This is what we call illegal retrenchment by Ford India Private Limited (FIPL). To retrench more than 300 people, the company needs government permission. However, Ford doesn’t have it.  Still, it retrenched almost 355 employees. This is the work ethic of such a big company. What do you expect the smaller ones to do?” a worker associated with Karnavati Kaamdar Ekta Sangh told NewsClick, on the condition of anonymity.

The worker further alleged that the administration of Ford had created an environment of fear among workers, due to which no worker wanted to come forward and speak as they feared losing the chance of getting justice if their names came out during the process of employment transfer from Ford to TATA in the beginning of January.

The said transfer of workers reportedly took place under 25FF(a) of the Central Government’s Act for Industrial disputes Act 1947. As per the provision, in case of transfer of employment, the workers are entitled to have uninterrupted services from Ford to TPEML.

In this case, however, this did not occur, as per workers’ union.

In Ford’s manufacturing plants, there were two categories of workers – staff and hourly-paid employees. The staff consisted of management and administration. While hourly paid employees were the technical staff, such as ITI diploma holders.

In Ford’s Chennai’s plant, the company relieved all of its employees with a package with a minimum cap of Rs 34.5 lakh and a maximum cap of Rs 86.5 Lakh after (45 days/year* number of years at Ford), according to a Financial Times report.

At the Sanand plant, the company initially offered no package and asked its employees to look for other jobs, the worker alleged. However, when TPEML came into the picture and the transfer of employment took place, the Ford management asked the people to either resign without any package or join Tata with new terms and conditions, this worker alleged.

Subsequently, the workers union started negotiating with the Tata management. As per the Karnavati Kaamdar Ekta Sangh, all seems fine except for one point. The workers wanted to continue the union in Tata and wanted a written confirmation. However, the Tata management did not accept the demand.

Meanwhile, another issue arose between Ford and its employees. The union wanted that the employees leaving the Sanand plant should get the same package the workers from the Chennai plant got. However, this demand was also allegedly declined by Ford management.

On January 11, the Ford management reportedly locked the doors for workers who didn’t agree to join the Tata workforce. The retrenchment was a “violation of the law and thus illegal move”, according to the aggrieved workers, since under Section 25N(2) of the IDA, prior permission is required from the government’s side in case of retrenchment. Workers alleged that Ford doesn’t have any such permission.

A representative of Ford India, over e-mail, told Newsclick that the acquisition between the two auto companies came into effect on January 10 this year. “Till then, 617 employees who accepted the offer of employment became TPEML employees. There were 350 employees who did not accept the TML’s offer despite repeated reminders and requests. So it was inferred that these employees did not wish to continue their employment post the transfer of the plant,” the representative said.

The management further informed Newsclick that a severance compensation of 15 days’ wages per completed year of service and one month’s notice pay was paid to the said workers. “All employees that have been relieved from services as per applicable law and given statutory severance compensation as part of the full and final settlement process,” the representative added.

Speaking with NewsClick, president of Chemical Majdoor Panchayat, Ashim Roy, confirmed workers having received a severance payment, but flayed the Ford management for not paying heed to the legitimate demands of the workers.

“Ford company is not respectful of Indian law and created coercive conditions so that workers cannot exercise their legitimate legal rights. The Ford company is openly  violating the provisions of ID Act, yet government is not taking any action and tacitly favouring the MNC,” he alleged.

The two worker associations are in touch with Ford, Tata management and the labour department. The workers have also written a letter to the Chief Minister of Gujarat, Bhupendra Patel, seeking intervention in the matter. They said they plan to take this matter to court if FIPL doesn’t respond soon.

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