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Now, Nokia tax dispute takes toll on vendors

Foxconn looking to lay-off workers; BYD Electronics announces VRS

T E Narasimhan & Gireesh Babu  |  Chennai 

The tax dispute related to Nokia India has hit the facilities of two of its major suppliers in Sriperumbudur, on the outskirts of this city. While the Foxconn International Holdings facility has told its workers it is considering lay-offs or retrenchment, following a voluntary retirement scheme (VRS), BYD Electronics India has announced a VRS for its employees, its workers have said.

Foxconn workers said the company had announced a VRS, open during the first 20 days of this month; 350-400 workers, mostly women, had opted for the scheme.

On June 20, the day the VRS came to an end, the company informed its employees through a notice, a copy of which is available with Business Standard, as it was recording low orders, it was considering approaching the government with a proposal for lay-offs/retrenchment. In the notice, the company said as there were no orders and its sales had fallen, it wasn't able to give regular work to operators.

Company officials weren't immediately available for comment.

Foxconn workers said the company had offered a package of 10 months' standard salary as compensation, a lump sum of Rs 75,000, salary for a month's notice period, gratuity and earned-leave encashment. "We have been expecting Foxconn will offer a VRS similar to that offered by Nokia. But now, they are saying they are planning lay-offs," said Dhanasekaran, general-secretary of the Labour Progressive Front.

As reported earlier, about 2,000 contract workers at the Foxconn facility have quit since troubles came to the fore at the Nokia facility. About 500 permanent workers were asked to take paid-leave, owing to lower production.

BYD Electronics India, the India arm of Chinese electronics major BYD Electronics, has also offered a VRS to workers at its Sriperumbudur plant. Workers said during tripartite discussions, company officials had disclosed plans to shut the plant by July 10.

BYD Electronics India officials weren't immediately available for comment.

According to workers, on June 20, the company had announced a VRS that offered Rs 50,000 as compensation and two months' basic salary for each year. Refusing this, about 850 of the 1,500 workers, went on a strike. This led to the arrest of three workers.

"I am getting a salary of Rs 7,500, after six years of working here. We don't want to work here anymore, but we are expecting a better package," said a woman worker. Workers are seeking compensation of Rs 3 lakh, as well as eight months' salary for each year.

"It is being negotiated. There was a meeting between labour officials, workers and the management; another meeting is expected next week. The management has said it will close the facility on July 10. It has already started an illegal lock-out by sending all the workers on leave, with salary for a week," said Vetrivelchezhan, state organising secretary, New Democratic Labour Front.

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First Published: Wed, June 25 2014. 00:41 IST