Court Orders Nissan To Pay Higher Wages To Employees; Nissan Threatens To Quit India
Nissan Motor Company has been asked to pay additional wages to its factory workers by an Indian arbitrator.
The company has been directed to pay these wages despite their warnings that a higher payout would render its business “unviable in the long run.”
Will Nissan quit in India? Read on to find out all the details!
Nissan Ordered To Pay Higher Wages To Employees
Renault Nissan has been ordered to pay an average of over 7,100 rupees ($96) a month in backdated dues as interim relief to 3542 of its workers. This payment is way higher than what was offered by the company, which was $30 a month. However, it is still less than the demand of the union, which was $270. This would cost Renault Nissan $9.53 in total.
This dispute between Nissan and its workers’ union has been going on since July. The arbitrator will also be judging more than 50 demands by the workers. If all these demands are agreed to, it would collectively cost the company 93% more per worker as confirmed by Nissa.
As per the company, the ongoing legal issues would expose the business challenges that the company faces in the world. Nissan has also argued that the company is making huge losses in India and does not have the financial capability to meet the workers’ demands.
As per the arbitrator, P Jyothimani, “I strongly believe and conclude that there is a case for granting interim relief to the workmen.”
Nissan’s Workers Being Paid Less Than Hyundai And Ford
A petition as long as 123 pages was filed by the workers, demanding an increase in their wages. They stated that the total wages that are paid by the company are less than half of that paid in the region by their contemporaries like Hyundai Motor and Ford.
The union has stated, “The demands made on the worker for sacrifice for the viability of the company is much more than the sacrifice made by the supervisory and managerial personnel and the directors.”
And now, Nissan has been ordered to pay $134 per month for the 12 months ending March 2020, and $67 rupees a month for the 16 months ending July 2021 in three monthly installments starting in September.
The company has in turn argued that the wages cannot be compared to Hyundai and Ford because these companies have been around for a longer period of time.
Renault Nissan’s business has been affected due to local competition, migration of management-level talent to other companies, an increase in raw material costs and unsatisfactory response to some of its models.