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Bonus Agreement signed between Tata Steel and its Union
A Memorandum of Settlement has been signed on 5th September, 2007 between Tata Steel and the Tata Workers’ Union for Annual Bonus for the accounting year 2006-2007.
The Memorandum of Settlement dated 20th August, 2002, which was valid for 5 years till the accounting year 2005-06 has been extended for the accounting year 2006-07 also.
In accordance with it, the Annual bonus for the accounting year 2006-07 is to be calculated on the basis of 50% on Production and 50% on Profitability. Based on this calculation, the Annual Bonus works out to 9.7% on Production and 10% on Profitability – thus making a total of 19.7% of salary/wages (Basic and Dearness Allowance) paid for the year 2006-2007.
However on the request of the Union and in consideration of satisfactory performance during 2006-07 and in order to keep up the morale of the employees, it was agreed to round-off the Bonus percentage for the accounting year 2006-07 from 19.7% to 20% (twenty) of salary/wages (Basic and Dearness Allowance) paid for the year.
Since all employees of the Steel Company are drawing salary/wages higher than the limit laid down in the Payment of Bonus Act, 1965, no employee of the Company is eligible for bonus under the Act. However, respecting our old traditions, the Company is going to pay bonus to all employees in the unionised category.
At 20% (twenty) percent bonus, the minimum and the maximum annual bonus payable will be Rs.9083/- and Rs.69452/- respectively. The total pay out on account of annual bonus for the year 2006-2007 will be Rs.107 Crores approximately. Nearly 33000 employees would be paid annual bonus.
Mr.B.Muthuraman, MD, Tata Steel and Mr.Raghunath Pandey, President, TWU and Sr. Executives of the Company and Union Office Bearers signed the Settlement in the Board Room at Jamshedpur in the presence of the Conciliation Officer and Dy.Labour Commissioner, Jamshedpur.
In a communiqué jointly signed by the Managing Director and President, Tata Workers’ Union, all the employees are being informed about the payment of annual bonus.