What's the difference between the VRS and premature retirement under Rule 61 of the ESI Act? Can an Insured Person who has been under insurable employment for not less than 5 years leave the employment on his own; can this be treated as Premature Retirement clause under Rule 61? Which law clearly distinguishes between VRS and Premature Retirement? Thanks in advance to the members for their opinions.
From India, Hyderabad
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87From India, Hyderabad
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In case of VRS, the company frames a scheme with specific terms about additional compensation/benefits (in addition to retiral benefits) offered for voluntary retirement of employees and offers such a scheme to employees, asking them that they can exercise their option to retire voluntarily in terms of the scheme. When an employee exercises the option to retire voluntarily in response to such a scheme, such retirement is called VRS. However, where an employee wants to retire before actually attaining the age of retirement/superannuation, then such retirement is considered premature retirement. Normally, the service rules prescribe a minimum service for allowing employees to retire prematurely. In premature retirement, no additional benefits apart from retiral benefits are payable.
B. Saikumar
HR & Labour Law advisor
Navi Mumbai
From India, Mumbai
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B. Saikumar
HR & Labour Law advisor
Navi Mumbai
From India, Mumbai
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Dear VSYAMPRASAD,
ESI Central Rule 61 provides for benefits after retirement. There are conditions that the person must be covered under ESI for a minimum period of 5 years before retirement. This is simply retirement, neither premature nor anything else. This retirement is on attaining the age of superannuation.
VRS is entirely different. It has nothing to do with ESI. Here, an employee resigns for certain benefits the employer offers to the person for resigning. There is no provision in ESI for VRS. The employee will cease to be covered under ESI once opting for VRS.
Do not confuse between the two. The two are neither comparable nor have any commonality between them.
Vibhakar Ramtirthkar
9371001906
snehvibha@yahoo.com
From India, Pune
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ESI Central Rule 61 provides for benefits after retirement. There are conditions that the person must be covered under ESI for a minimum period of 5 years before retirement. This is simply retirement, neither premature nor anything else. This retirement is on attaining the age of superannuation.
VRS is entirely different. It has nothing to do with ESI. Here, an employee resigns for certain benefits the employer offers to the person for resigning. There is no provision in ESI for VRS. The employee will cease to be covered under ESI once opting for VRS.
Do not confuse between the two. The two are neither comparable nor have any commonality between them.
Vibhakar Ramtirthkar
9371001906
snehvibha@yahoo.com
From India, Pune
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Dear vibhakar, is vrs is applicalble only on govenment job employee or is it for private sector also. Rgds manish
From India, Bulandshahr
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From India, Bulandshahr
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Dear Manish,
VRS is not provided in any law. It is used to separate an employee without any dispute, regardless of whether they work in the private or public sector. There is nothing wrong with separating an employee without dispute. The benefits of VRS are not uniform, and there are no specific guidelines. What matters is the formula used.
Sometimes, an employee may commit misconduct, and the employer might suggest that the employee resign to avoid a lengthy legal battle. In such cases, the only entitlements are the legal dues, with no additional benefits.
Vibhakar
snehvibha@yahoo.com
From India, Pune
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VRS is not provided in any law. It is used to separate an employee without any dispute, regardless of whether they work in the private or public sector. There is nothing wrong with separating an employee without dispute. The benefits of VRS are not uniform, and there are no specific guidelines. What matters is the formula used.
Sometimes, an employee may commit misconduct, and the employer might suggest that the employee resign to avoid a lengthy legal battle. In such cases, the only entitlements are the legal dues, with no additional benefits.
Vibhakar
snehvibha@yahoo.com
From India, Pune
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ESI Amendment Act 2010-Gazette Notification-01 -06-10.pdf
FORMS under the ESI Act.doc