Hind Motors Unveils Fresh Vers

Automobile company Hindustan Motors Ltd, which is in the process of rationalising manpower, yesterday offered a fresh voluntary early retirement scheme (VERS) to the permanent employees of the company's West Bengal unit.

Currently, the company has approximately 11,000 employees on its payroll at the Uttarpara unit.

The new VERS for the permanent employees is specifically aimed at netting the 50-plus age group and has served the company for more than 20 years. It will bring within its fold factory workers, staff, managers, and executives of the automobile division of the company's Uttarpara plant.

According to sources, the new scheme will become effective from today October 15, and will remain open till November 30, 1998. It will be withdrawn or extended at the company's discretion. "However, the retiring employee will not be employed in another company belonging to the same management," stated the VERS circular hung on the factory gates yesterday afternoon.

 

Besides preserving the take home pay of every employee who opts for the scheme, the new scheme will also provide an opportunity for lumpsum compensation subject to certain ceilings. The lumpsum compensation would be tax-free as has been approved by the Income-Tax authorities. Employees who opts for the scheme can choose between a fixed consolidated monthly pension (FCMP) or a combination of both FCMP and a lumpsum payment upto a maximum of Rs one lakh.

"Since there are financial constraints, applications for the VERS will be accepted and processed on a first-come-first-serve basis in respect of the employees opting for a combination of both FCMP and a lumpsum payment", states the circular. The company will accept about 100 applications of the employees. But the ceiling might be reviewed by the management after it has secured the requisite approval from the Income Tax department.

Employees who decide to avail the scheme will also get full terminal benefits including provident fund (net of outstanding loans), gratuity as per the Gratuity Act, payment of superannuation scheme to those who are eligible for it and full encashment of accumulated privilege leave and sick leave including accrual for the current year. A help desk, set up by the company for the purpose, will provide assistance to the employee regarding investment of their terminal benefits in safe and secure avenues ensuring maximum return.

However, the employees are under no compulsion to take or follow the advice.

It appears that there has been no serious resistance to HM workforce paring schemes from the unions. The Hindustan Motors & Hyderabad Industries Workers' Union have agreed to extend full co-operation towards rightsizing and improving productivity, the source added.