Engineering, auto firms roll out VRS

MUMBAI: Several leading manufacturers across sectors such as auto, ancillary, engineering, metals and mining are offering ‘voluntary separation’ to employees to streamline businesses at a time when they are operating at lower capacities amid the pandemic, and to bring in fresh talent when required.Some companies in the automotive sector such as truck maker Ashok Leyland, tyre manufacturer Apollo Tyres, and carmaker Toyota Kirloskar are among the latest to have offered voluntary retirement schemes to a section of their employees.Manufacturers such as Honda Cars, Bharat Forge, BMW and Thermax, too, have recently rolled out VRS schemes to improve their operational efficiencies and profitability, company executives said.Ashok Leyland, whose VRS scheme is currently ongoing, said it's more of a restructuring exercise. “The current landscape of the global pandemic provides scope for people to pursue flexible career opportunities and this will provide a window for the same,” said Balachandar NV, president – HR, communications and CSR, at Ashok Leyland.79600044Toyota Kirloskar launched a voluntary separation scheme in November for supervisory staff and workmen category. “The scheme is announced for members who wish to take up a career outside Toyota Kirloskar,” a company spokesperson said. The compensation benefits is based on last drawn wages, seniority, and the number of years of service left in the organisation, the person said. Medical insurance support for self and immediate family members for a specified period in addition to ex gratia, leave encashment and other terminal benefits are part of the offer. Japanese carmaker Honda Cars, which had a VRS initiated in January, followed it up with another one in July. “It aimed to provide a win-win situation for the associates, in terms of the overall benefits, and the company, to be able to enhance operational efficiency in the current tough market condition,” a company spokesperson said. The scheme consisted of financial and health security benefits.“The current capacity utilisation is very low among auto companies and VRS is a better option than firing an employee,” said Gaurav Vangal, associate director, production forecasting, at IHS Markit, an information and analytics provider for industry.Labour and employment lawyers said there has been an increase in VRS offers being rolled out by companies in the last few months after the Covid-19 outbreak to streamline operations amid lower capacity utilisation and a hit on demand.“VRS has been there, but because of the business repercussions due to Covid-19, such offers are being given more frequently and overtly,” said Anshul Prakash, partner at law firm Khaitan & Co, who is a specialist in employment and labour law.

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