Companies retain Diwali bonuses to employees at last year’s levels

Companies retain Diwali bonuses to employees at last year’s levels

Notwithstanding the economic slowdown, several old economy companies have retained Diwali bonuses to their employees at last year’s levels.

Textile mills and garment exporters have even increased payouts due to better performance this year.

Export units have seen a robust improvement in sales on the back of a weak rupee and better demand. “Exporters were benefited by the appreciation in the dollar. There are no major issues (in bonus payments) this year,” said M Chandran, district secretary, CITU, Tirupur.

Garment units in Tirupur have given 1-4% higher bonus on an average this Diwali to workers. While bonus settlement has been reached in about 50% of the units in the knitwear town, the remaining ones are expected to conclude agreements in the next two days, Chandran said. Companies are giving 8-30% bonus in Tirupur. The statutory minimum is 8.33%, while the maximum is 20%.

With the industry emerging out of one of the worst slowdowns, textile mills are also offering higher bonus this year. About 80% of textile mills have reached agreement on bonus payments, said V Reghurajan, secretary, legal, Southern India Mills’ Association, which has about 350 member mills in Tamil Nadu. “The (textile) industry is in better shape compared to last year,” officials said.

Power cuts have come down allowing mills to increase capacity utilization and the demand for yarn has also been good. Payments are 1-4% higher this year in mills as well. This is in sharp contrast to last year when most firms did not increase payouts.

Bonus payments remained muted in industrial units across the western region last year due to the slowdown and the production loss arising from severe power cuts. Engineering units in Coimbatore, however, have maintained payments at the same level due to poor sales in the current year.

“The industry went through a tough phase due to lack of credit, slow pace of additions in power connections and the overall economic slowdown,” said Jayakumar Ramdass, managing director, Mahendra Pumps.

Bonus negotiations have also been smooth this year. “Over the next few days we will finalize the Diwali bonuses for all companies,” said R Chinnaswamy, head of Anna Thozhir Sangha Peravai or ATP, affiliated to the ruling AIADMK.

“MRF has given out a bonus of 20%, a 2% increase from last year,” he said. “It has been a difficult year for the automobile industry. Through a slew of internal cost control measures and support from our dealers, Hyundai Motor India has been able to maintain its market share,” said Sanjay Pillai, VP, HR, Hyundai Motor India. Hyundai has paid a festival bonus of Rs 56,087 each on an average to their shop floor employees.

Samsung India is offering Diwali bonus to all its employees, both blue and white collar. This is in addition to the year-end performance bonus. Companies pay over and above the maximum as ex-gratia.

Most companies, however, no longer follow the practice of paying incentives during festivals for white-collar jobs. Managements try to engage employees using non-monetary methods like team outings, gifts and sweets at most new economy firms, said Nishchae Suri, partner at consultancy firm KPMG.

Arrow, a part of the Arvind Mills Group, took all its employees on vacation. “All store staff from Arrow were taken to a five-star resort in Bangalore last week and we told them all about the plans for the festive season,” said Rishi Vasudev, senior VP & COO, tailored clothing & sportswear division, Arvind Lifestyle Brands. For most of these companies, bonus is strictly performance-linked and is paid at the end of the year.

At auto parts firm Visteon, festival bonus of ICICI bank cash cards worth around Rs 3,000 was given this year to factory workers during the Ayudha Puja.

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