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Last Updated : Mar 30, 2020 08:27 PM IST | Source: Moneycontrol.com

Coronavirus lockdown: L&T defers extra pay revision to employees, cites disruption

"Most of our employees personally wanted to get associated with this social cause and hence extra salary revision that was planned from 1st March was postponed till end July,” L&T said in a statement.


Larsen & Toubro (L&T), India's largest construction and engineering company, said it had to defer the extra salary revision - which was planned from March 1 till the end of July - due to business disruption caused by the COVID-19 lockdown.

L&T has announced additional compensation covering for eligible supervisory, executive and covenanted employees effective March 1, 2020. The extra salary revision was intended to cover a large section of its employees. L&T has 44,761 employees as per the FY19 annual report.

L&T spokesperson said this extra salary revision had nothing to do with the annual appraisal.

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"Upto a particular band or tier, we have also issued letters to the eligible employees. Like everybody else, we did not anticipate the business disruption of this magnitude which is expected to adversely impact our revenues, cash flows and profits," according to an internal communication sent to employees.

Moneycontrol saw a copy of the letter.

"The fact that the disruption is a global phenomenon has impacted our international operations as well. Based on the current assessment, it might take a few months for normalcy to return to our business operations. We took these decisions and issued the letters, rightly so as the need was to implement it immediately but that the circumstances will turn out this way was not predictable," the letter added.

L&T said the decision had the backing of its employees.

"Most of our employees personally wanted to get associated with this social cause and hence extra salary revision that was planned from 1st March was postponed till end July,” L&T told Moneycontrol.

L&T has a order book of 3.06 lakh crore, as on January 31, with three-fourths of it coming from domestic and the rest from international business. L&T executes a wide gamut of projects spanning infrastructure, hydrocarbon, power, metals and minerals, process industries and defence.

The lockdown imposed by the government had hit services sector like the aviation industry that saw job losses and pay cuts. But the impact on the construction industry would be even more severe, as construction labour constitutes the second highest after agriculture.

Steps to support labour

While L&T is observing work from home at corporate level, the lockdown has impacted work at project sites. The company said it was taking several steps to ease the pain including spending about Rs 15 crore per day to provide support to over 2,30,000 labour.

"To handle calamities of such large magnitude, certain steps were taken to ensure that company’s grassroot labourers, including those of contractors and subcontractors, were not affected and their basic needs are met during this period of countrywide lockdown," L&T said.

"We are spending about Rs 15 Crore per day to provide support for 230,000 plus labourers staying at labour camps associated with company’s project sites. We continue to provide them wages, food, sanitation facilities, medical facilities, fuel (for Genset operations), etc, while maintaining the COVID19 prevention and containment protocol," the company added.

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First Published on Mar 30, 2020 07:22 am
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