News: Tata Group to retain all current employees of Air India for the first year

Employee Relations

Tata Group to retain all current employees of Air India for the first year

As far as employee benefits are concerned, the gratuity, pension fund and post-retirement medical benefits of existing and past employees will be honored by the Tata Group.
Tata Group to retain all current employees of Air India for the first year

The prodigal Air India brand has returned to the Tata Group after a hiatus of 68 years. And at a cost of Rs 18,000 crores. The government now aims to hand over the airline to the Tata Group by December 2021.

For the government, this means the beginning of the Centre’s privatization program after a gap of almost two decades. But what does this mean for the employees of the struggling debt-laden carrier?

As per the terms of the sale, the Central government has asked Tata Sons to not fire any Air India employee for at least one year. Also, Tata Group will offer the voluntary retirement scheme (VRS) in the second year to any existing Air India employees who are let go.

At present, Air India has a total of 12,085 employees among which 8,084 are permanent and 4,001 are contractual. Air India Express has 1,434 employees. Tata Group to retain current Air India employees for first year, the Union government said. “The current bidder (Tata Group) will retain all the current employees of Air India for the first year. In the second year, they will see who to retain and can also give (VRS) voluntary retirement from service," added Rajiv Bansal, Civil Aviation secretary.

Gratuity, pension fund and post-retirement medical benefits will be honoured 

Also, as far as employee benefits are concerned, the gratuity, pension fund and post-retirement medical benefits of existing and past employees will be honoured by the Tata Group. Free travel by government employees on Air India flight will be stopped after the handover while free travel to retired employees will be in accordance with industry practice.

In addition, the outstanding dues of Air India employees which total around Rs 1,332 crores as per the report of Justice Dharmadhikari, will be paid by the government.

However this one-year protection for employees is not absolute. There are issues like performance, conduct etc. The future of Air India employees is still quite uncertain as the effects of this takeover start to manifest. Earlier, the Government had directed the Air India employees to vacate their accommodations, for which they were paying subsidized rent, within the six month period after the disinvestment process. Since the pandemic, the employees had also faced salary cuts and were subjected to leave without pay scheme (LWP), like all other airlines as the sector reeled under the effects of the pandemic.

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Topics: Employee Relations, #MergersAndAcquisitions

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