Gross Discrimination Alleged in VRS Payments at Visakha Steel Plant; 130 Employees Serve Legal Notice
With EMIs mounting and no clarity on pending dues, financial distress has deepened
Serious irregularities and alleged discrimination have surfaced in the implementation of the Voluntary Retirement Scheme (VRS) at Rashtriya Ispat Nigam Limited (RINL), the corporate entity behind the Visakha Steel Plant, despite dedicated funding under the Government of India’s ₹11,400 crore revival package.
Phased VRS Rollout Raises Questions
The VRS was introduced as part of a workforce rationalisation exercise linked to the revival package jointly supported by the Centre and the State Government. However, stark disparities have emerged across the three phases of implementation:
- Phase-1 (March 2025): 1,137 employees retired on March 31, 2025, receiving 100% of their VRS benefits on their last working day.
- Phase-2 (September 2025): 464 employees retired on September 30, 2025. While release orders were issued, only 50% of the VRS dues were paid, that too in two instalments.
- Phase-3 (March 2026): 67 employees have reportedly received just 25% of their entitled VRS package so far.
Out of the total ₹11,400 crore revival package, around ₹500 crore was earmarked specifically for VRS payouts. The release of funds was conditional upon meeting certain restructuring milestones, including workforce reduction.
Unpaid Dues and Alleged Violations
Employees from Phase-2 claim that multiple dues remain pending, including:
- Remaining 50% of VRS payout
- Earned Leave encashment
- 355% wage arrears
Individual unpaid amounts reportedly range between ₹20 lakh and ₹60 lakh.
In a particularly contentious issue, employees allege that full income tax was deducted on the entire VRS amount, even though only partial payments were made. This has intensified financial stress among retirees.
Management Response Under Scrutiny
Grievances submitted through formal channels, including CPGRAMS, have reportedly received a standard response from management stating that payments would be processed “only after the factory’s financial health improves.”
Employees argue that such a stance violates both internal circulars and guidelines issued by the Department of Public Enterprises (DPE), especially given that funds had already been earmarked for VRS.
Allegations of Fund Diversion
A major allegation raised by affected employees is that funds allocated for VRS under the revival package may have been diverted for other operational purposes, contrary to prescribed norms.
Representations have been submitted to the Ministry of Steel, including the Union Minister and senior officials, but employees claim no corrective action has been taken so far.
Financial Distress and Legal Escalation
The delay in payments has had severe personal consequences. Many retirees had structured their post-retirement plans—such as home loan repayments, children’s education, and medical expenses—based on assured VRS disbursements.
With EMIs mounting and no clarity on pending dues, financial distress has deepened.
In a significant escalation, 130 affected employees have now served legal notices to RINL management and the Ministry of Steel. They have demanded immediate clearance of all pending dues along with 12% interest, warning that failure to comply within a week will lead to legal proceedings.
The copy of the legal notice is given below for the benefit of the viewers of www.indianpsu.com –
