Blue Star chairman Ashok Advani says: "The VRS has been launched to enhance plant competitiveness in view of the international competition that the company has to face."

For every completed year of service the workers will be paid 3.5 months salary or nine months of salary for every remaining year of service which ever is lesser. This would amount to a maximum payment of about Rs 6.5 lakh in Mumbai and in other centres it would be Rs 3.5 lakh.

The severance package for the managers will also be structured in a similar manner, the only difference being that the total severance benefit will not breach a ceiling of Rs 3.5 lakh irrespective of the number of yearsworked or the remaining years of service.

The situation is rendered more piquant by the fact that of the total 2,630 employees of Blue Star all over India, as many as 1,765 are management staff.

According to official spokesperson Sanjay Mallya: "The severance package for the managers is kept low because they are technically very qualified and will have avenues for alternative employment elsewhere, whereas the unskilled labourers will not have this alternative."

The voluntary retirement scheme was drawn up to result in an overall reduction in the existing strength of managers and employees of the company to improve our productivity and competitive edge.

The VRS amount will be computed on the basis of the last salary which would include the basic salary plus the dearness allowance, but excluding all other allowances and perquisites.

For the purpose of computing the length of service only the completed years of service will be taken into account. Basic salary for part of the year of service shall becomputed on the basis of the completed month and part of a month shall be ignored.

In the event of death of the retiree the nominee will be entitled to receive the severance amount. And the severance package will be paid within seven days.

The company in the scheme has also stated that it will not fill up the vacancies caused by the VRS, and that employees taking VRS will have no claim to re-employment.

The retiring employees will also be entitled to all normal retirement benefits such as gratuity, encashment of privilege leave, provident fund and superannuation as is applicable in normal retirement procedure.