Recently, the largest public sector bank of India i.e. SBI comes up with the new VRS for their employees. In this article, you will know about the largets facts about the Voluntary Retirement Scheme. What are changes done in this scheme? If you are an SBI employee then it is very important to know about this scheme.
What Is Voluntary Retirement Scheme?
Basically, In the Voluntary Retirement Scheme, the company allows his employees to retire before there actual retirement date. On the other hands, the company offers various perks and benefits in exchange for retirement. It benefits the company as the strength of the company reduces. Sometimes the company do not have money to pay the salaries or strength of the company increases. Hence in order to reduce the strength companies use this method. Public and Private sector both can implement this method in their organisation. It is also known as the “Golden Handshake”.
How did VRS Come In India?
Since the labour laws in our country are rigid. According to the Industrial Dispute Act 1947, the companies or the employers who have excessive staff cannot reduce it immediately. This means a company cannot remove the employers if the organization contains the staff in excess. If a company try to reduce it by force or any methods trade unions will oppose this method which can cause the disputes. In order to avoid these types of situations, VRS introduces in India. Hence we can say the VRS is the alternative legal solution to lessen the strength and reduce disputes to a great extent.
Also when the company introduces the VRS procedure then no one opposes. The reason is that the company is not forcing the people to get retire it totally depends on whether you want to retire or not. Public Sector Undertakings (PSU) have to take permission from the government for introducing VRS procedure in their organization.
In which Cases VRS is Introduced
If you are taking about the VRS then it introduces in India due to the following reasons
- Recession in business: When the company suffers loss than in that case company asks for VRS from employees.
- Intense competition: Competiton between the organization leads to this method.
- Takeovers and mergers: When the takeover or the merger takes place between the two organization. Due to the mergers, the employees are in access then in that condition, VRS takes place.
- Obsolescence of product/technology: The technology advancement in an organisation leads to this.
- Joint-ventures with foreign collaborations
SBI Voluntary Retirement Scheme 2020
In order to optimize the human resource and cost of the banks, the SBI is introducing VRS for over 30000 employees. The name of this scheme is Second Innings Tap VRS 2020. Currently, it is in the form draft submitted by the SBI bank and the decision will be taken by the government. This scheme will provide an option for employees whether they want to continue their services or not. According to the bank, those employees who reach the saturation level means they are satisfied with their jobs and want to pursue their dream. The people having a personal issue or want to live their life outside the banking world can opt for Voluntary Retirement Scheme.
Eligibility for VRS
Now let’s talk about the eligibility for the VRS which employees will be under this category.
- The permanent staffs and officers who have completed 25 years of service.
- The employees who complete 55 years of age will come under this scheme.
When Will This Scheme Start
The scheme will open from 1st December and it will remain open till the end of February. During this period the applications for the VRS will be accepted by the banks.
What will be Benefits To Employees Opting VRS?
The staff members who are opting for the retirement under VRS scheme will get benefit in many ways. Firstly, the employee will get 50% of the salary in advance for the remaining years he/she is going to serve before retirement. Other benefits such as the provident fund, gratuity, pension and medical benefits will be given to the employee who takes VRS.
Can Employee Be Re-Emoployed who took VRS?
Yes, of course, the employees can get their jobs back if the bank feels so in re-employing them. But the thing which needs to keep in mind that the cooling time period will be of 2 years. Means the time difference will be of two years before starting your job again if you already complete your job under voluntary retire scheme.
How Many Employees Will Be Eligible?
In total 30000 employees will come under this category. The officer’s count is 11565 and 18625 clerks can avail the VRS scheme. According to the current scenario, the total strength of employees working Under SBI is around 2.49 lakh. These are the 2020 reports of SBI.
The bank will get benefit from this scheme. According to the figures, the bank will able to save 2170.85 crores if 30% of employees took retirement under VRS scheme.
The VRS introduces in banks in 2001 with the objective to optimise the human resource. In 2017 when the SBI five associates merge then VRS is given to the employees of the banks.
According to the National Organisation of Bank workers vice president Ashwani says on this matter. He said this is not a good move by the bank during this pandemic situation where the employees do not want to lose their jobs.
On the other hand, SBI is planning on recruiting more than 14000 vacancies this year which is good news for the aspirants.