The agreement, which was signed between the management and the Shramik Sena union led by former Shiv Sena minister Ganesh Naik at Patalganga on Thursday, will come into effect from November. Confirming the development, Naik told The Financial Express: "It is a historic agreement, and is especially significant against the backdrop of recessionary trends in the economy."

The Rs 4,500 package comprises a hike of Rs 2,500 in the salary component, while the balance will be factored in through various allowances. The company, according to Naik, will also pay an annual bonus of Rs 19,600 for 1998-99, Rs 20,000 in 1999-2000 and Rs 21,000 in 2000-01.

There is more good news for the employees, Naik said. The loan for long-term housing has been enhanced by Rs 1 lakh to Rs 2.34 lakh. The previous rule ofimposing an age limit to qualify for the loan has also been waived, which means that more people would now come under the umbrella. According to Naik, the agreement states that the management will carry forward those loans if the stipulated figure of 100 loans are not disbursed in a particular year.

Reliance has also introduced a personal development allowance and first-aid allowance for its employees at the plant. Those who are keen on a course in computer education will receive an additional allowance for the purpose.

The agreement is significant especially when there has been an ongoing feud between the ruling Shiv Sena and Naik over the supremacy of leadership of the union at Reliance's Patalganga unit. Naik, who was sacked recently by chief minister Manohar Joshi, still enjoys a major following despite several efforts made by the Sena to lure the workers.

Observers said that Naik has received a shot in the arm following Thursday's agreement as the workers have reaffirmed confidence in hisleadership while the Sena's efforts to reestablish its hold did not pay off. It will clearly give a political mileage for Naik who has challenged the Sena supremo by forming his own outfit "Shivshakti."