Nokia’s Chennai workers seek FinMin intervention in tax case

The workers’ union at Nokia’s Chennai factory have written to Finance Minister P. Chidambaram seeking his intervention in resolving the tax case.

The Chennai plant has been frozen by the tax authorities after the company disputed tax claims of around Rs 3,000 crore. The workers have told the Finance Minister that their jobs are at stake if the order to freeze Nokia’s assets is not revoked.

6,500 workers There are about 6,500 people directly employed by Nokia at the Sriperampudur factory of which 3,500 are women. Their future is at stake because Nokia has to transfer all its assets to Microsoft under a global agreement by December 12. But the Chennai plant will be left out if the tax authorities do not revoke the freeze order.

While Nokia has sought court intervention in the matter, the employees have written to the Finance Minister that the scenario creates fear and uncertainty.

The letter written in Tamil, sent on November 26, states that after Nokia set up the factory at Sriperumbudur, the economic and social conditions of the villages around have improved.

The union said that they were relying on this factory for their livelihood. In addition to the direct employees, the plant offers indirect employment to around 25,000 people.

If the tax authorities continue to keep the assets under custody, Nokia will be forced to convert the factory into a contract manufacturing facility.

Contract manfacturing Under an agreement signed between Nokia and Microsoft, this facility will be used as a contract manufacturing unit for 12 months. But contract manufacturing would mean that it would be up to Microsoft to source products from the Chennai factory or from other plants around the world. There is also no clarity on what would happen to the factory after a year.

On the other hand, Nokia has decided to exit the handset business globally so it won’t have any use for this plant.

thomas.thomas@thehindu.co.in