VRS Stands for Voluntary Retirement Scheme. VSS stands for Voluntary Separation Scheme. Both VRS and VSS are used interchangeably. Central Government of India has designed some guidelines for Public Sector Undertakings (PSU) on the compensation rules to follow at the time of announcing a VRS/VSS package to the employees. Gujarat Model VRS Scheme Calculation is very popular that is followed by Sick or To Be Closed PSUs to settle its employees with benefits package.
There are so many PSU enterprises operating under the Central Government of India. It is up to the employees to accept or reject the VRS / VSS package offered by their public sector organisations. If the employee does not opt for a VRS scheme, he may be subjected to only Retrenchment Compensation thereafter.
Government companies like BSNL, MTNL, Air India and others may announce a VRS Scheme based on this Gujarat Pattern. It is only speculation in various News Papers as of now. You can check 125% Package for BSNL MTNL VRS Calculator + Gratuity + Pension Calculator if required.
Gujarat Model VRS Scheme Compensation Calculation Rules
Gujarat State has introduced a VRS scheme for marginal profit or loss making enterprises. Compensation is also called Ex-Gratia in this context.
Rule 1: Only the present Basic Pay and DA (Dearness Allowance) are used for calculation of Compensation amount.
Rule 2: Minimum compensation will be Rs. 25,000 or 250 days salary whichever is higher. The compensation should not exceed the amount calculated for his remaining service.
Rule 3: Maximum compensation will be up to 36 months amount for the remaining service.
Rule 4: Compensation is based on 35 days for a Completed Year and 25 days for Remaining Service Period.
Rule 5: Original Gujarat Pattern VRS Scheme suggested 26 days per Month for calculation of single day salary compensation. Later to bring uniformity among all other government organisations, Gujarat Scheme was modified to 30 days a month to calculate Single Day Salary.
Rule 6: If the calculated compensation or ex gratia amount is more than 36 months of salary (Basic + DA), then the amount which is lower will be taken into account.
Rule 7: If the employee already completes 30 years of service, he is eligible for 60 months of salary (Basic + DA) or amount payable based on completed years and pending service whichever is lower. For employees who have not completed 30 years of service, only 36 months is the maximum limit. This 60 months scheme is applicable only if stated explicitly and it is not for all organisations.
Rule 8: Within 3 months of the announcement, the employee has to opt for the said VRS / VSS Scheme. Otherwise, the organisation may deny VRS.
Rule 9: If the organisation is loss making or financially weak, it may try for Bank Loans for completing the VRS process. If bank loans are not possible, then Budgetary support may be given.
Rule 10: Organisations may try to convince Talented and skilled employees not to opt for VRS package. Management has the right to reject the Voluntary Retirement Applications for the welfare of the organisation.
Example Calculation 1
Basic = Rs. 10000
DA = 120%
One Day Salary = (Basic + DA)/30days = Rs. 733.33
Completed service = 20 years.
Remaining service = 10 years.
Compensation for Completed Years = 35 days x 20 * 733.33 = 513331
Compensation for remaining Years = 25 days x 10 * 733.33 = 183333
Expected Compensation Amount = 513331 + 183333 = Rs. 6,96,664
3 Years or 36 months Salaray = (10000+ 12000)*36 = Rs. 7,92,000
Final VRS Payment = Rs. Rs. 6,96,664 ( It is less than 36 months salary)
Example Calculation 2
Basic = Rs. 25000
DA = 130%
One Day Salary = (Basic + DA)/30days = Rs. 1916.67
Completed service = 8000 days = 8000/365 years = 21.917
Remaining service = 10 years
Compensation for Completed Years = 35 days x 21.917 * 1916.67 = 14,70,268
Compensation for remaining Years = 25 days x 10 * 1916.67 = 4,79,168
Expected Compensation Amount = 14,70,268 + 4,79,168 = Rs. 19,49,436
3 Years or 36 months Salaray = (25000+ 32500)*36 = Rs. 20,70,000
Final VRS Payment = 19,49,436 ( which ever is less will be paid)
Gujarat Pattern VRS Calculator
Paying Transportation Allowances
Travelling allowances for the employee and his family may be paid after knowing where they want to settle. TA Allowances also include the cost of transportation of his belongings. Usually employees settle in their home towns. How ever, it is subjected to conditions.
Leave Encashment on VRS
A central government employee can encash a maximum of 300 Paid Leaves. Some organisations do not allow encashment of Sick leaves.
LTC Payment on VRS
If the LTC scheme is active, the organisation may settle LTC payments as well for employees taking or opting VRS scheme.
Minimum Age for VRS
There are no hard and fast rules. It is up to the organisations to apply age restrictions to enter the VRS package.
Casual Leave After Opting VRS Scheme
If the employee has CL or Casual Leave balance, he may avail the leaves on a pro-rata basis.
Notice Pay on Opting VRS
Notice pay is allowed only if the employee's VRS request is processed on the same day including financial payments. Notice pay varies from 1 month to 3 month salary.
Disclaimer
Please do not take this information as authentic for exactness. The information may be used only for casual calculations. It is only collected information and this website is not responsible for any damages either monetary or in any other form.
References:
1. https://dpe.gov.in/sites/default/files/VOLUNTARY_RETIREMENT_SCHEME_%28VRS%29-Chapter-8.pdf