Mumbai: Reliance Industries Limited (RIL) will roll back salary cuts for the employees of its various divisions with retrospective effect, a statement from the company read. Reliance in April cut the salary of employees of its hydrocarbons division by 10 per cent to 50 per cent and the group’s chairman Mukesh Ambani decided to forgo all his remuneration.
The annual cash bonus, which was deferred after the company’s business was hit by the COVID-19 lockdown, will also be handed over, the company said. Annual cash bonus and performance-linked incentives are normally paid in the first quarter.
Reliance is also offering an advance of 30 per cent of the variable pay from the next year’s salary to employees as a goodwill gesture for working during the pandemic, the oil-to-retail conglomerate said in a communication to employees. It said the payouts will be affected along with the October 2020 salary. “All these measures have been taken in order to support you in these challenging circumstances,” the company said in the communication.
The decision of India’s biggest industrial group to restore the salaries of its more than 3.5 lakh employees retrospectively from April 1, 2020, is the strongest signal yet of Indian industry’s recovery against the crushing blows of COVID-19 depths.
Restoring salary along with arrears would essentially put plenty of money to spend in the hands of the group’s employees and families. In many ways, this is the equivalent of a veritable economic stimulus that would help spark demand in the economy.
While Mukesh Ambani decided to forgo his entire Rs 15 crore compensation, the Reliance board of directors, including executive directors, executive committee members, and senior leaders, relinquished 30 per cent to 50 per cent of their compensation.
Experts are now hinting that companies, large and small, could now follow the lead of RIL.
Reliance’s hydrocarbon business was adversely impacted due to a reduction in demand for refined products and petrochemicals after a nationwide lockdown was imposed to curb the spread of COVID-19. However, the group announced that it overcame its large debt pile 9 months ahead of schedule and that too in the middle of a pandemic, making the company debt-free.