Alfa Laval Forces 150 Managers To Accept Vrs
In a drastic move, the management of Alfa Laval (India) Ltd has virtually sacked 150 managers of the company as they were forced to take up voluntary retirement scheme (VRS). Besides this, another 56 workers mainly from the shop floor are believed to have willingly accepted the VRS.
Another 150 managers who refused to accept the company's VRS are said to be put on the firing line.
They are likely to face a 3-month termination notice. The Alfa Laval Employees Union has described the VRS as compulsory retirement scheme, as the employees of the company were forced into accepting the retirement against their wishes.
On January 1, 1997 the management with its operations at Dapodi, near Pune and surrounding areas, announced the VRS to all employees other than directors who have completed 10 years of service or attained 40 years of age as on January 1, 1997 for eligibility.
Besides, it also offered VRS to those who were not eligible under the scheme approved by the Income-Tax Act, on the condition that compensation received will attract income tax at source.
The maximum compensation offered under the VRS is Rs 5 lakh and the minimum offered is Rs 1 lakh.
Alfa Laval has in all 1,300 workers. Out of this, 700 are at the managerial level, while 150 are clerical staff. The balance 156 are blue collared workers. The company has targeted to cut 400 jobs, including 300 at the managerial level.
The management of the company has justified its move to cut jobs on the ground that it was part of the restructuring and cost rationalisation exercise. During the first half of fiscal 1996-97, the company had posted a net loss of over Rs 13 crore.
The company has a high wage bill which constitutes 9 per cent of its income. The company's union blames the high wage bill on the fat perks offered to the managers. Cut the fat perks and you will see a slim wage cost the union has argued.
The Alfa Laval Employees Union has also charged the management of hiving off its profit making units into separate entities and putting Alfa Laval India in the red.
Asked if the employees of the company were forced into signing the voluntary retirement scheme, the chief of the company's human resource development wing said, "I cannot comment."