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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Understanding VRS and Premature Retirement
In the case of Voluntary Retirement Scheme (VRS), the company frames a scheme with specific terms about additional compensation/benefits (in addition to retiral benefits) offered for the voluntary retirement of employees. The company offers such a scheme to employees, allowing them to exercise their option to retire voluntarily under the scheme's terms. When an employee exercises the option to retire voluntarily in response to such a scheme, it is called VRS.
However, when an employee wants to retire before actually attaining the age of retirement/superannuation, such retirement is considered premature retirement. Normally, the service rules prescribe a minimum service period for allowing employees to retire prematurely. In premature retirement, no additional benefits apart from retiral benefits are payable.
Regards, B. Saikumar
HR & Labour Law Advisor
Navi Mumbai
From India, Mumbai
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In the case of Voluntary Retirement Scheme (VRS), the company frames a scheme with specific terms about additional compensation/benefits (in addition to retiral benefits) offered for the voluntary retirement of employees. The company offers such a scheme to employees, allowing them to exercise their option to retire voluntarily under the scheme's terms. When an employee exercises the option to retire voluntarily in response to such a scheme, it is called VRS.
However, when an employee wants to retire before actually attaining the age of retirement/superannuation, such retirement is considered premature retirement. Normally, the service rules prescribe a minimum service period for allowing employees to retire prematurely. In premature retirement, no additional benefits apart from retiral benefits are payable.
Regards, B. Saikumar
HR & Labour Law Advisor
Navi Mumbai
From India, Mumbai
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ESI Central Rule 61 and Retirement Benefits
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.
Understanding VRS and Its Relation to ESI
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.
Regards, Vibhakar Ramtirthkar
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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.
Understanding VRS and Its Relation to ESI
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.
Regards, Vibhakar Ramtirthkar
[Phone Number Removed For Privacy-Reasons]
[Email Removed For Privacy Reasons]
From India, Pune
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ESI Amendment Act 2010-Gazette Notification-01 -06-10.pdf
FORMS under the ESI Act.doc