Tata Steel will pay its workers across all its plants a record bonus for 2020-21 on the back of bumper profits in the last financial year.

The company’s management and the Tata Workers’ Union (TWU) on Wednesday signed a memorandum of settlement for the payment of Rs 270.28 crore as annual bonus for the fiscal, which is around Rs 35 crore more than the payout of Rs 235.54 crore in 2019-20.

Tata Steel had reported a net profit of Rs 13,707 crore in the last fiscal against Rs 6,744 crore a year ago, an increase of more than 100 per cent.

The agreement — done much earlier than the usual payments during the Pujas — was signed between Tata Steel CEO and managing director T.V. Narendran and Tata Workers Union president Sanjeev K. Choudhary.

Besides net profit, the bonus was determined by the company’s profitability and the productivity of the employees.

“The union and the management have mutually agreed to continue the existing annual bonus scheme applicable for financial year 2017-18, 2018-19 and 2019-20 to be followed for financial year 2020-21 also and to pay annual bonus based on 1.5 per cent of net profit,” a union member said.

“In addition the amount was based on performance achievement on profitability (profit per tonne of saleable steel), productivity (tonnes of crude steel per employee per year) and the amount calculated was Rs 270.28 crore,” the member said.

The total number of employees to whom the bonus will be paid in Jamshedpur is 12,558, which includes employees of the tubes division.

“Since a majority of Tata Steel employees draw salary/wages higher than the limit laid down in the Payment of Bonus (Amendment) Act, 2015, they are not eligible for bonus under the Act. However, respecting old traditions, the company pays a bonus to all employees in the unionised category,” said a company official associated with the bonus agreement process.

The official statement of the company said that despite a “difficult year”, the company has kept its “three-year commitment” made earlier, of paying the complete bonus to the employees.

The average bonus amount this year is Rs 1.26 lakh, with a maximum of Rs 3.59 lakh for the old grade of employees. In the new grade, the maximum amount at actual attendance is Rs 92,910. The minimum bonus at full attendance is Rs 34,290.