VRS for unionised L&T staff flops

Sambit Datta

Mumbai, Oct 8: Larsen & Toubro’s (L&T) third voluntary retirement scheme (VRS) for unionised employees, has received a lukewarm response. The VRS, applicable to the entire 4,300 strong L&T unionised staff under the banner of the Bharitiya Kamgar Sena, saw just 200-and-odd employees opting for the scheme.

When contacted, L&T’s spokesperson declined to comment but said that the response hadn’t been very encouraging. Sources said that the scheme, which opened on September 7, was originally supposed to close by October 3, but was extended for three more days.

The VRS was applicable to those with 10 years of service and above 40 years of age. Employees opting for the scheme were entitled to payments of up to Rs 6 lakh along with bonus and ex-gratia and analysts say the company’s total outgo may not exceed Rs 20 crore.

The scheme was applicable to the permanent employees in the daily-rated and monthly-rated technical and clerical staff categories working in the electrical business group (EBG), packaging business group, earth-moving machinery services, Powai general manager group, head office in the L&T establishment at Powai and Mudh works and city offices.

Earlier, the company had introduced two VRS schemes — one in August 1999 and the other in August 2000 — for those below the managerial level. In August 1999, the company had introduced a voluntary retirement pension scheme (VRPS) where around 500 employees opted for it and in the second round approximately 150 employees opted for it.

L&T had earlier said that the outgo on account of VRS would be capitalised over the next three years. This year the company is targeting a 10 per cent reduction in manpower. The exact outgo, however, is still under compilation, since there is a slab system of payment, linked to service.

L&T’s staff expenses for the financial year 2000-01 as percentage of total revenue stood at 7.3 per cent. Staff costs for the just concluded fiscal stood at Rs 587.95 crore for the company.