Lured Into VRS, 92,000 BSNL & MTNL Employees Told To Wait For Compensation Till Next Year

Raman Swamy

A record-breaking 78,300 BSNL employees retired all on the same day on January 31, just a day before the Union Budget.  So did 14,378 from MTNL, making it probably the biggest simultaneous mass retirement in history.  

Lured into voluntary retirement, now they are left anxiously waiting for the promised compensation, because Nirmala Sitharaman’s marathon Budget speech did not make provisions for prompt payment.  

All of retiring staff had seen the writing on the wall because for more than a year the government had been sending out ominous signals – either opt for the Voluntary Retirement Scheme or be prepared for compulsory retirement.   The impression was sought to be created that both BSNL and MTNL were on the verge of closure and that the huge salary bill was one of the reasons why the public sector telecom giants were unable to compete with private players.  It was clearly a ruse because a “revival plan” was subsequently put in.

As it turned out, however, the response to the VRS offer exceeded what the government had anticipated.   There were reports last year that the BSNL management was aghast to see the flood of employees applying for Voluntary Retirement.  Within eight days of announcing the VRS scheme, 75,000 employees had submitted their consent letters.  The same was the case with MTNL where14,378 employees opted for VRS against target of 13,650 employees.

With the scheme coming into effect on February 1, 2020,  the management was somewhat caught off-guard.  Adequate precautions had not been taken to cope with the instantaneous mass exodus -  either in terms of paying the promised severance benefits or managing operations with staff suddenly reduced to half. 

A series of urgent meetings were held of chiefs of all circles in the country to deal with the double shock.  There were chaotic situations at various levels.  Earlier, thinking that arm-twisting would be required to compel employees to opt for VRS, many BSNL exchanges were deprived of funds.  As a result of this squeeze, repair and maintenance work was jeopardized. 

Moreover, the exchanges are faced with shortage of technically competent staff for key operations.  This has necessitated a massive musical chairs exercise with a nationwide transfer policy having to be mapped out on crisis mode.  Junior Telecom Officers are being transferred in droves from circle level to all India level.   Thousands of Linemen and non-technical clerical staff are being transferred helter-skelter within districts where VRS response has been virtually 100 per cent, such as some places in Punjab. 

The most number of employees who applied for VRS were in Maharashtra, where 8544 out of 10,185 staff aged between 50-60 years volunteered to retire.  In view of the fact that the total in Maharashtra number of employees was  13,672, this is a massive reduction.   Similarly, in Kerala, 68.9 percent of the total eligible staff opted for VRS. Among the total 9458 employees, 6671 were eligible for VRS and 4596 of them grabbed the opportunity. 

Other states with high percentage of employees who have applied for VRS include Rajasthan (82.8%), Telangana (82.2%), Gujarat (81.6%) and Uttaranchal (81.3%).  More applicants in the 57-58 age group -  14,727 among the 16,261 staff born in 1962 were willing to take VRS (90.6%).  Also 94 percent of the Group A staff starting from deputy general managers and the posts above it born in 1962 also applied for VRS.   And 90.5 percent of the staff born in 1961 and over 75 percent of the staff who had upto 5-6 years for retirement gave consent letter for VRS.

Employees who have 9-10 years left for retirement largely responded negatively to the scheme. Among the 398 staff born in 1970, only 98 applied for VRS. The staff and executives born between 1960-1970 were included in the VRS. 1,04,471 among the total 1,63,903 staff were eligible for the scheme. 78,559 among them were willing to take VRS. About 4000 of the remaining 85,344 employees will be normally retiring in 2020 and they are not included in the scheme.

As can be seen, it is a gigantic human issue.  Enough thought has clearly not gone into the life-changing emotional and financial repercussions of the record-shattering down-sizing drive.  That apart, the Budget speech came as a disappointment to the outgoing employees -  they will have to wait for more than three or four months before they will be paid their dues. 

The reason for this delay is because the Union Budget has not made adequate provisions for disbursement towards the programme in in this financial year.  Settlement worth Rs 37,268.42 crore on account of VRS, capital investment in BSNL and MTNL for 4G spectrum and grant for payment of GST have all been budgeted for the next financial year 2020-21.

The Finance Minister set aside a paltry provision of just Rs 528 crore in the current fiscal for settlement towards implementation of the VRS. 

At the time the VRS was announced, BSNL had approximately 1, 53,200 employees. Anybody over the age of 50 could opt for the scheme. The promised compensation was calculated at most 125 per cent of 40 months' salary. More than Rs 70,000 crores was estimated to be disbursed for the employees.  

It was said at that time that Rs 17,169 crores would be allotted as ex gratia for the retirees. Rs 12,678 crores will be disbursed as pension allotment. The amount of ex-gratia for any eligible employee would be equal to 35 days' salary for each completed year of service and 25 days' salary for every year of service left until superannuation. 

That is why 78,300 employees—half of the workforce—willingly agreed for VRS.   Now,  they are ex-employees but they will have to wait for compensation.

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Feb 6, 2020

Raman Swamy

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