The workmen will get a wage hike of Rs 2,000 per month. Of this Rs 1,700 will be the direct benefit, while the balance will come in the form of higher contribution to the provident fund, increase in LTA etc. The settlement, which was under negotiation for five months, covers 6,000 workers based at the company's Akurdi plant.

Besides a significant improvement in the medical and loan schemes for workmen, an adhoc payment of Rs 23,800 has been agreed to, subject to their meeting the required attendance norm. The agreement also includes a commitment by the workers to follow the cellular manufacturing system, work 440 minutes per shift and adopt practices aimed at improving productivity, quality and a new better work culture. The 440 minutes per shift is remarkably high given an available time of 480 minutes per shift.

"While the wage settlementseems generous given that this year has been a bad one for the industry, Bajaj Auto has made significant productivity gains, which translates into a 10 per cent increase in the number of vehicles produced, with no increase in manpower," Madhur Bajaj, president, Bajaj Auto, told The Financial Express. The agreement was signed by Ramakant More, president of the BKS and Madhur Bajaj.