Air India offers 2-yr leave without pay to 30k staff

Written by Sunny Verma | New Delhi | Updated: Jun 27 2009, 03:02am hrs
Cash-strapped and over-staffed carrier, the state-owned, Air India on Tuesday introduced a voluntary leave without pay scheme for its more than 30,000 employees to cut its annual wage bill of Rs 3,000 crore. The carrier has nearly 10,000 excess employees and another 20,000 on contracts.

According to an order issued by National Aviation Company of India Ltd employees subscribing to this scheme will have to forgo salary, perks, allowances and productivity linked incentive payments during the leave period of two years. The leave duration can be extended up to five years at the managements discretion.

The scheme can be availed of till July 31, 2009 by all permanent employees and probationers, except the bonded employees. Those opting for this scheme will be allowed to work at private companies in India as well as abroad. But they cannot take up any job in the government and other public sector undertakings, says the order signed by Nacil executive director (personnel) VA Ferreira. Facing a steep financial crisis, the state-owned carrier is desperately trying to rationalise staff and reduce employee costs by Rs 500 crore annually.

After his 90-minutes meeting with the Prime Minister Manmohan Singh on Wednesday, civil aviation minister Praful Patel blamed Air India employees for the companys downfall and said employee unions will hasten their demise by going on strike. Air Indiawhich suffered losses of more than Rs 5,000 crore in 2008-09, on an actual revenue base of Rs 12,000 crore has sought Rs 14,000 crore from the government. Patel said the government will provide one last opportunity to Air India to shape up.

Employees using this scheme will not be eligible for foreign postings for a period of one year after they return from leave, the order said. During the period of leave without pay, the employees shall be without pay, dearness allowances, other allowances, benefits, perquisites and productivity linked payments (PLI) and shall lose all service benefits such as all types of earned leave, pension, gratuity, provident fund, increment and also promotion opportunities, it said.

However, employees can avail of medical benefits during the leave period. In case probationers exercise this option, Air India will forfeit all service benefits accrued to them till the time of going to leave.

The PLI payments constitute almost half of Air India Rs 3,000 annual wage bill. Strangely, a technician who gets Rs 50,000 monthly salary is eligible for Rs 1,30,000 PLI payment. Company sources said the scheme was unlikely to see many takers as it strips them of most financial benefits. However, a senior government official familiar with the matter was critical of the scheme. The fact is that the best employees of the company will leave, he said.