Nokia union asks govt to protect jobs

Tags: News

With global sale to Microsoft a month away, tension high

Even as Nokia grapples with tax demands from the Indian authorities, trying to find ways to solve them in time to complete the sale of its mobile device and service business to Microsoft globally, the Nokia India Employees Union on Thu­rsday announced its plan to observe a one-day fast to draw the attention of the government to their plight.

Fearing job loss, the union has sought the support of the central and Tamil Nadu governments to safeguard the employment of nearly 20,000 employees, including about 7,900 direct employees, with the Nokia manufacturing facility at Sriperumbudur, near Chennai.

The Finnish handset maker has been wrangling with the central government over an income-tax dispute. The Supreme Court recently asked Nokia to submit a Rs 3,500 crore guarantee before it moves ahead with its asset transfer plans to Microsoft in India. The apex court also upheld a lower court’s verdict over the central government’s move to freeze the Chennai plant’s assets until it recovers its tax dues.

On top of that, a few days ago, the state government too slapped a Rs 2,400 crore commercial tax due notice on Nokia. The Tamil Nadu government claimed the dues on the grounds that the company sold handsets in the domestic market, while they were originally manufactured for export. The company had subsequently moved the Madras high court and challenged the demand as a “baseless claim”.

“We fear the loss of employment and livelihood to thousands of workers, who have been part of the Nokia facility for almost eight years, if the company is unable to solve the tax issues with the central and the state authorities in time for the global sale to Microsoft,” A Soundararajan, honorary president of the union and state president of CITU said.

“While the governments have to demand and collect taxes due to them, we are afraid that if the process is not completed on time, then the Indian manufacturing unit will be left out of the deal and there are already indications that it could be converted into a contract manufacturing unit to Microsoft, a move that we completely oppose to protect the interest of the workers,” he added.

According to him, the workers have no problem with Microsoft buying out the Nokia facilities globally, including the Chennai plant. “The workers should either be on the rolls of Nokia or Microsoft, but not that of a contract manufacturing unit. Eventually, if the contract manufacturing unit is closed for want of orders, after a year or so, then we will have no way to take up the issue with Microsoft,” he said. Hence, he sought the central and state governments not to concede any special demands from Nokia that will eventually jeopardise the employment of the workers.

“We will not allow any move by the company that will result in either closure of the plant or retrenchment of workers. We want the governments to ensure the job security of these workers,” he said.

According to the union, Nokia has slowly cut down production at the Chennai plant in recent months, reduced the number of shifts to two from the earlier three and has recently completely shifted the manufacturing of Asha handsets to overseas facilities. It had also incorporated a new company, Nokia India Sales Pvt Ltd (NISPL) to take care of the handset sales and service.

“We see an ulterior motive in this, as the company may later merge NISPL with Microsoft, continue to sell its handsets in the Indian market, and leave out the manufacturing facility from its asset sale to Microsoft,” union members fear. They have threatened to intensify their agitation once the general elections are concluded.

The employee union’s plea has come just a day after Nokia Corporation announced that it has one more month’s extension to transfer its assets to Microsoft, which agreed to buy Nokia device and service business for Euro 5.44 billion.

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