Royal Enfield Signs Three-Year Wage Pact for Vallam Vadagal Plant Workers

Motorcycle manufacturer Royal Enfield, a unit of Eicher Motors, has signed a three-year wage settlement with the Vallam Royal Enfield Employees Collaborative Union (VREECU) covering 638 Associate Engineers at its Vallam Vadagal plant near Chennai.

According to the wage pact document, the settlement will be effective for three years, spanning from April 1, 2026, to March 31, 2029. It replaces the previous wage agreement that concluded on March 31 earlier this year.

Under the terms of the new agreement, workers will receive a total wage increase of Rs 40,000, which includes welfare benefits, distributed across three financial years. The hike is structured as Rs 20,000 in the 2026-27 financial year, Rs 12,000 in 2027-28, and Rs 8,000 in 2028-29. Eligible employees will also receive a one-time integration and goodwill payment amounting to Rs 40,000.

The pact restructures existing compensation components by merging the 5 percent annual variable pay directly into monthly gross wages. As a result, there will be no separate variable-pay disbursements during the settlement tenure.

The agreement also revises various allowances and operational benefits. It introduces higher shift allowances, a monthly allowance of Rs 500 for staff working in essential departments, and a Rs 300 allowance for need-based work on Sundays. The increment for grade promotions has been raised from Rs 1,000 to Rs 1,250.

In addition, the settlement includes an annual interest-free salary advance of Rs 70,000 and a Rs 5,000 Ayudha Pooja voucher. The group medical insurance coverage for employees has been doubled to Rs 4 lakh. Leave provisions have been expanded to include extra casual and sick leave, three days of bereavement leave, and the option to accumulate sick leave up to 100 days.

Both Royal Enfield management and the union have committed to maintaining industrial peace throughout the settlement period. The Vallam Vadagal facility, which is Royal Enfield's third factory, commenced operations in 2017 and recently added a dedicated assembly line for electric vehicles.