Hyundai Motor India has increased the wages of its workers at Chennai plant by 45 per cent, which is applicable for tenure of three years. With this move of South Korean auto maker, it seems that the league started by Maruti Suzuki after increasing the salary of its Gurgaon employees by 50 per cent will be joined by several car makers in the Indian auto industry. A thing to note here is that the trend of providing higher wages to workers is in contrast with the slowdown in auto market, which has adversely affected on the profits of auto makers.
The company said in a statement, “Hyundai Motor India Limited (HMIL) today announced the successful completion of its wage settlement negotiations with the United Union of Hyundai Employees (UUHE).”
With effect from 1st April 2012, the wage settlement agreement of Hyundai with United Union of Hyundai Employees will remain effectual till March 31, 2015. It further said, “The wage increase ranges from Rs. 11,000 to Rs 13,000, excluding components like the variable dearness allowances and other welfare benefits.”
In the total announced hike, the workers will be provided with 40 per cent of the increase salary in the first year and 30 per cent in the next couple of years. However, the company officials did not discussed any other details addressed in the agreement like leaves, various allowances, transportation and accommodation benefits.
Reportedly, this agreement will cover around 2,000 permanent employees of the auto maker’s Chennai unit. Expressing his views on the same, the Managing Director of Frost & Sullivan South Asia, V G Ramakrishnan said that the wage realignment is a must, considering the labour environment existing in India. He further added,
“The significant increase is more of responding to the market pressure, pressure from labour unions and off course inflationary environment. This increase covers an average inflation of 7-8 per cent every year, but also gives them incentive to improve productivity.”
Speaking on the same lines, the National President of the Employers' Federation of India (EFI), Rajeev Dubey said that in an extremely competitive atmosphere of today, every organisation has to find out its own affordability point. He added, “All units will have to balance the need to be competitive, yet be fair to its employees. The exact increase will vary from unit to unit. But it is a difficult balancing act, which companies will have to strive to maintain.”
