The Hindu : Tamil Nadu / Chennai News : Employee opting for VRS has no further claim on employer: court

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Sunday, Jun 29, 2008
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Tamil Nadu

Tamil Nadu - Chennai

Employee opting for VRS has no further claim on employer: court

K.T. Sangameswaran

Appeal challenging single judge’s order allowed

CHENNAI: After money is paid to an employee under a voluntary retirement scheme (VRS), there is no question of him broaching any of his past rights with the erstwhile employer, including making a claim with regard to pension, the Madras High Court has ruled.

The court was allowing an appeal by a company here, challenging a single Judge’s order setting aside an order of the Labour Officer (LO), Chennai, rejecting a workman’s application for making a reference under section 2-A of the Industrial Disputes (ID) Act.

A Division Bench, comprising Justices S.J. Mukhopadhaya and V. Dhanapalan, said VRS was introduced by companies and industrial establishments to reduce surplus staff and bring about financial efficiency. A considerable amount was paid to the employee as ex gratia, besides terminal benefits.

The money was not for any work or rendering any service, but was in lieu of the employee leaving the services of the company and forgoing all claims or rights. It was a package deal of give and take. The main purpose was to bring about a complete cessation of the relationship between the employer and the employee.

According to M.N. Padmanabhan (respondent), he had put in 34 years of service in EID Parry (India) Ltd., and opted for VRS in 1993. Payments towards gratuity, provident fund, etc., were made to him.

Later, he wrote to the company alleging that the VRS application was obtained under coercion and that he was deprived of pension. He raised an industrial dispute before the Labour Officer (LO), claiming the alleged settlement was not legal. The LO dismissed his claim stating the dispute did not come within the purview of section 2-A of the ID Act. He filed a writ petition, which was allowed by a single Judge. Against this, the company preferred a writ appeal.

The Bench said the respondent, having opted for VRS and after entering into a settlement fully understanding the terms and encashing the settlement amount, claimed further benefits. If he was permitted to raise such a grievance, the very object and the purpose of introducing the scheme would be defeated. There was no reason to believe there existed any dispute in the case.

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