The three-member Justice Dharmadhikari Committee, looking into Air India?s contentious HR issues, has suggested that performance-linked incentives (PLI) of the public sector carrier?s 29,000 employees be merged with their basic salary. The committee, which submitted the report on Tuesday to the aviation minister Ajit Singh, also recommended to link incentives with the profitability of the carrier and not with operational parameters as is currently in practice. The move would affect take-home salary of all AI employees, including pilots, other members of the cabin crew and engineers. The new package, the committee says, will be cost-neutral.
In case the report is implemented, the incentive part which currently accounts for 50% of the gross salary would fall. As per the current PLI norms, incentives are linked to the number of passengers and punctuality of flight takes-off among others. The airline?s profitability is not a criterion at present.
?The committee suggested a pay structure which is in conformity with the DPE (department of public enterprises) guidelines. The suggestions if implemented would be cost-neutral,? official sources told FE.
The official added that with basic salary to be high as a result of the proposal, the PF (provident fund) contribution and gratuity of employees (which are determined as percentage of the basic salary) would go up.
As per airline projections, Air India is not looking at any profit at least in next five years with interest and operating cost remaining high. The airline has a total debt of R43,000 crore on its books and is saddled with an accumulated loss of R22,000 crore.
Air India?s current annual wage bill is about R3,200 crore, 12-15% higher compared with rival airlines like Jet Airways and IndiGo. The government had last year set up a committee under Dharmadhikari with other members being R Dholakia of IIM-Ahmedabad and former director in DPE Rajeshwar Dayal to address the pay related issues of Air India and erstwhile India Airlines.
Following the merger of Air India and India Airlines the issue of equal salaries and allowances came up triggering protest and agitation by employees for pay parity.
?If the suggestions of the Dharmadhikari Committee is implemented, 90% of the employees would get either same or a little more salaries. In case of 10%, primarily high-paid pilots, would see a marginal cut,? sources said.
Pilots who led the protest on several occasions in the post-merger years would, however, get flying and other minor allowances over and above the incentives. The set of recommendations would be implemented with retrospective effect since 2007.