Renault-Nissan has been asked by court to pay extra wages to factory workers in Chennai
An Indian court has asked Renault-Nissan to pay its 3,542 workers at the Chennai factory an average of more than Rs 7,100 per month in additional wages as injunctive relief, according to a copy of the order reviewed by Reuters.
Workers at the Renault-Nissan plant in Chennai filed an industrial arbitration case demanding 20,000 rupees as a monthly interim settlement after the expiration of a previous wage agreement in March 2019.
The consortium had agreed to pay an average of 2,250 rupees per month until March 2021.
Nissan had told the court its business in India could become “unviable” in the long run if it yielded to higher wages for its factory workers, according to a court request from the Japanese automaker.
Nissan and its union have been embroiled in a legal arbitration dispute since July after the two sides failed to agree on several issues, including higher wages.
In an August 16 order, a judge ruled that Renault-Nissan must pay 10,000 rupees per month for the 12 months ending March 2020, and 5,000 rupees per month for the 16 months ending in July 2021.
Reuters has reviewed the petition and injunction, which were previously unreported.
Nissan Motor Company, which majority owns the plant, did not immediately respond to an email asking for comment.
The struggle exposes the business challenges Nissan faces in the world’s fifth largest auto market, where, despite an investment of approximately $1 billion, it has been ousted by competitors and struggling to pursue car buyers.
The setback shows the pressure that Nissan is under as it tries to restructure some of its key international markets, such as India, where it has yet to decide on a future strategy for its underutilized factory.
“The arrears will be paid by the defendant/management in three monthly equal installments from 01.09.2021,” the order read.
