Coronavirus Lockdown Impact: Bajaj Auto Proposes 10% Pay Cut For Staff

Bajaj Auto Ltd. management has proposed salary cut for all employees with its MD Rajiv Bajaj himself to take 100 percent pay cut for the extended lockdown period till May 3.

According to a letter sent by the company's HR department to employees, there is need to bring down fixed cost in the wake of the lockdown due to coranvirus pandemic, hence the deductions needed.

However, according to union sources, if the company resumes production from April 20 under the new guidelines by the Ministry of Home Affairs, the proposed 10 percent salary reduction by the management will not be implemented.

The letter from the HR department said: "We are extremely sensitive to the welfare of our workers and employees. If these deductions were to be made they would be fixed, balanced and measured and graded."

It further said,"the Managing director has decided to take the initiative if such a decision is implemented, he will not receive any salary during this period."

Automobiles and auto components production in the country is suspended since the imposition of the nationwide lockdown on March 25, which has now been extended to May 3.

However, the industry is hoping to resume partial operations after the the Ministry of Home Affairs on Wednesday issued guidelines for the extended lockdown period.

As per the guidelines, manufacturing units located in rural areas can start operations under strict conditions. Besides, manufacturing and other industrial establishments with access control in Special Economic Zones and export oriented units, industrial estates and industrial townships can restart production from April 20.

"Due to unprecedented conditions, business and incomes have stalled in many areas and many companies have either announced or considering several cost-control measures, including some tough ones," the letter said.

"We will review it periodically as the uncertainties in the present scenario will be even greater," it said.

Meanwhile, sources also said the Bajaj Auto workers union has agreed for a 10 percent pay cut for the second phase of the lockdown period, if production does not resume from April 21.

"We have given our consent to the management for a 10 percent cut as we are fully aware of the situation the company and the country is going through," a union representative told PTI.

The company's three plants at Chakan, Aurangabad and Pantnagar together have around 5,000 permanent employees , he said.