While the management of India's largest residuary non-banking financial company (NBFC) maintained that the VRS was part of a restructuring exercise and is voluntary, the unions have written to the managing director recording their opposition and vowing to resist the VRS "in the manner it deserves".Representatives of the two unions - one linked to the Congress (I) and the other to the Communist Party of India (Marxist) - noted that 85 per cent of the 4,336-odd employees fear that their jobs are at stake as the management has targeted around 3600-odd employees for the scheme.

The All India Peerless Employees Union, affiliated to the CPM's labour wing, said, "Forced retrenchment will create panic among employees and depositors and there will be a run on the company". AIPEU member Nirmal Chatterjee, who is a former MP, noted that in the event of a panic amongst depositors, the company will stand to lose considerably.

The unions plan to file mass petitions, appeal to the prime minister, raise the issue in Parliament, and meet Union finance minister Yashwant Sinha and Reserve Bank of India governor Bimal Jalan.

The union representatives have already met West Bengal chief minister Jyoti Basu, who has assured them that he will take up the issue with both Vajpayee and Sinha.

During an earlier interview with The Financial Express, Peerless managing director SK Ray had sounded a note of warning for those employees trying to spread panic amongst depositors on account of the VRS proposal. He had noted that the issue is voluntary and the company had little option but to restructure the entire manpower setup. Chatterjee, along with union president Sukomal Sen, pointed out while the management had categorically denied a report published by a financial daily last year that a proposed VRS was on the anvil, it took an arbitrary decision on the issue in the following year.

According to the unions, no one has yet taken the VRS offer. However, the company spokesperson denied this by saying that applications have been already submitted and the exact status will be available in another week. The spokesperson repeated Ray's earlier statement that the VRS proposal is voluntary while the union's statement says that the management is trying to create a sense of insecurity and "force employees to opt for the VRS". The unions said that they are ready to discuss manpower rationalisation on a case-by-case and branch-wise manner. They pointed out that the management's decision comes at a time when employees have fulfiled business targets not only during fiscal 1999-2000 but also in this year's first quarter.