Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
12,007.3067.2
Stock Analysis, IPO, Mutual Funds, Bonds & More

Air India buyer may be allowed to retrench staff in a year

They will be retrenched through the government’s voluntary retirement scheme (VRS), where an employee gets an amount that’s equivalent to monthly salary multiplied by either the years of service completed or those left, whichever is less.

, ET Bureau|
Oct 17, 2019, 06.27 AM IST
0Comments
Agencies
Air-India-et
Any move to allow future promoters to terminate the jobs of employees will mark a key change in last year’s failed divestment process.
NEW DELHI: The government is considering a plan to make Air India more attractive for potential buyers by allowing employees to be retrenched a year after divestment, said people aware of the matter.

“There are the two proposals being discussed — one is to allow them to retrench after one year and the other is to give three years,” said one of them. “It would make sense to allow future owners to retrench staff after a year’s time.”

Another person said the government will ensure that the interests of employees are protected.

“There would be conditions like employees can only be retrenched through the government’s voluntary retirement scheme (VRS),” he said.

Under VRS, an employee gets an amount that’s equivalent to monthly salary multiplied by either the years of service completed or those left, whichever is less, along with other compensation that the person is eligible for, said the people cited above.
AI-info

Any move to allow future promoters to terminate the jobs of employees will mark a key change in last year’s failed divestment process, when the government had promised job protection.

All proposals are being discussed and will be put before the committee led by home minister Amit Shah for consideration, said the people cited above.

The government’s attempt to divest a 76% stake in Air India drew a blank last year due to various reasons. These included staffing levels, employee medical benefits as well as flying privileges for workers and their families even after retirement, alongside its towering working capital debt. The government is now looking to fully exit the carrier.

Unlike last time, the government is open to suggestions from industry to ensure that the national carrier finds a buyer this time, said the people cited above.

“The government is also likely to provide clarity on these terms around the time bidding process begins,” said one of them. “The expression of interest (EoI) is likely to be issued (in) middle or late November.”

The government is also working on a plan that will shield any buyer from having to bear the cost of health coverage for current and past employees.


Also Read

Air India starts Mumbai-Amritsar-Stansted flight

Air India's Hyderabad MRO eyes EASA certification

Air India buyer may be allowed to rename airline

Air India faces mass resignation ahead of divestment

Air India to meet unions over privatisation on Monday

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service