Steel giant Tata Steel reached an accord with its union on the annual bonus issue where the employees stand to get an annual bonus of 20 per cent for the year 2007 – 2008.
The Memorandum of Settlement dated 20th August, 2002, which was valid for 5 years has been extended for further one year for the accounting year 2007-08. In accordance with it, the annual bonus for the year 2007-08 will be calculated on the basis of 50 per cent on production and 50 per cent on profitability.
Based on this calculation, the annual bonus works out to 9.26 per cent on production and 10 per cent on profitability, thus making a total of 19.26 per cent of salary (basic and DA) paid for the year 2007-2008.
However, on the request of the union and in consideration of the centenary year and satisfactory performance during 2007-08 and to boost the morale of employees, Tata Steel agreed to round-off the bonus to 20 per cent.
The previous year the bonus was also 20 per cent.
A large number of employees draw salary higher than the limit laid down in the payment of bonus Act, 1965; hence such employees are not eligible for bonus.
However, Tata Steel in maintaining their old traditions will pay bonus to all employees in the unionised category.
At 20 per cent percent bonus, the minimum and the maximum annual bonus payable will be Rs9,154 and Rs75,372 respectively.
The total payout of annual bonus at Jamshedpur (including tubes) will be around Rs64 crore, and Rs113.8 crore for Tata Steel (India operations).
B Muthuraman, managing director, Tata Steel and Raghunath Pandey, president of TWU, along with senior executives of the company and union office bearers signed the settlement in the board room at Jamshedpur in the presence of R P Singh, conciliation officer and deputy labour commissioner, Jamshedpur.