Jet Airways has sent close to 10% of its employees on leave without pay and imposed pay cuts on another 30%, according to CEO Sanjeev Kapoor.
The action follows a stalemate between promoters Jalan-Kalrock Consortium (JKC) and its lenders, which has delayed the airline’s relaunch. Earlier this week, JKC approached the NCLAT pleading that gratuity dues of Jet employees should be paid from the airline’s existing cash balance and lenders’ funds. In October, the NCLAT had directed the consortium to pay gratuity and provident fund to the airline’s employees till the date of insolvency commencement in June 2019. The total claim is about ₹275 crore.
There are a total 230 employees, including those from Jet Airways 1.0 who have been on the rolls through the insolvency process, as well as those employed by the JKC.
“While we await the handover of the company as per the NCLT process, the longer-than-expected time being taken for the same may result in some difficult but necessary near-term decisions to manage our cashflows to secure the future while the airline is still not in our possession,” the airline said in a statement.
“While we await the handover of the company as per the NCLT process, the longer-than-expected time being taken for the same may result in some difficult but necessary near-term decisions to manage our cashflows to secure the future while the airline is still not in our possession,” the airline said in a statement.
The JKC blamed the lenders for the delay in the handover of the airline and said that it had deposited the first tranche of ₹150 crore with the lenders as per the order of the NCLT in June 2021. This was in response to media reports citing banking sources and which said that the consortium had delayed payments.
“It is apparent that the NCLT plan did not take the statutory dues of gratuity and PF issues at hand,” said Narayan Hariharan, former senior VP, Jet Airways, and a member of the Jet Airways Officers and Staff Association. “We had raised the issue but the NCLT said staff were not financial creditors. The decision of the NCLAT in October seals the law that ‘statutory welfare provisions cannot be sacrificed in the IBC process’, he pointed out.
