The purpose of the Voluntary Retirement Scheme is to bring about a complete cessation of the jural relationship between the employer and the employee, and the economic viability and financial capacity of the employer are important factors in determining wage structure.

Prabha Sridevan, J.

The 117 employees who had retired availing the Voluntary Retirement Scheme offered by the appellant-Corporation in the year 1986, preferred a claim petition under Section 33C(2) of the Industrial Disputes Act, 1947 on the ground that while calculating the retrenchment compensation, ex gratia and Earned Leave wages, the Management has taken 30 days and 31 days for the month for the purpose of calculating the amount instead of taking 26 days in the month, as calculated in the case of gratuity. The Labour Court, Salem accepted their contention and passed orders. Against that, the appellants herein filed the writ petition. That was dismissed by the learned single Judge holding that there is no irregularity in the order.

2. Learned counsel for the appellants raised only two points. One is that when the option under Voluntary Retirement Scheme has been accepted and the benefits have been taken, no claim can be made and it is not open to the respondents to re-agitate the matter, especially after nine years, and claim that dues are payable on the ground of pay revision. In this regard, he relied on (2003) 5 S.C.C. 163 [A.K. Bindal vs. Union of India]. He also referred to 2007 (1) L.L.N. 740 [Guru Jambheshwar University vs. D. Pal], where the Supreme Court has held that the principle of 26 working days per month as applicable under the Payment of Gratuity Act cannot be imported for determining retrenchment compensation payable under Section 25F(b) of the I.D. Act. Secondly, it was also submitted that the appellant-Corporation had incurred heavy loss in its administration due to surplus and eight units had been closed down and in those circumstances, the Voluntary Retirement Scheme was extended to its employees. Learned counsel submitted that having accepted the amounts paid in the year 1986, the respondents cannot return after nine years and make a claim under Section 33C(2) of the Act.

3. Learned counsel for the respondents-workmen submitted that they are all poor workers who are entitled to the relief.

4. It is not necessary to go into the details regarding the facts of the case. In (2003) 5 S.C.C. 163 (supra), the facts are almost identical. There, the company was Fertilizer Corporation of India, a Government of India Enterprise and the employees had retired taking advantage of the Voluntary Retirement Scheme extended by it. When there was a pay revision, they again made a claim alleging that they are entitled to more. The Supreme Court held as follows :

"34. This shows that a considerable amount is to be paid to an employee ex gratia besides the terminal benefits in case he opts for voluntary retirement under the Scheme and his option is accepted. The amount is paid not for doing any work or rendering any service. It is paid in lieu of the employee himself leaving the services of the company or the industrial establishment and foregoing all his claims or rights in the same. It is a package deal of give and take. That is why in the business world it is known as “golden handshake”. The main purpose of paying this amount is to bring about a complete cessation of the jural relationship between the employer and the employee. After the amount is paid and the employee ceases to be under the employment of the company or the undertaking, he leaves with all his rights and there is no question of his again agitating for any kind of his past rights with his erstwhile employer including making any claim with regard to enhancement of pay scale for an earlier period. If the employee is still permitted to raise a grievance regarding enhancement of pay scale from a retrospective date, even after he has opted for Voluntary Retirement Scheme and has accepted the amount paid to him, the whole purpose of introducing the Scheme would be totally frustrated."

In that case also, the Supreme Court held that "the contention that the economic viability of the industrial unit or the financial capacity of the employer cannot be t