Jet Airways cuts salaries, sends several employees on 3-month leave without pay
Grounded airlines Jet Airways has slashed salaries of employees by upto 50 per cent and has decided to send several of its staff on leave without pay (LWP) for three months starting December 1.
Reports say the decision has been taken after the management’s efforts to revive the airlines didn’t materialise as planned.
Moneycontrol quoting sources said that around half of the workforce of the airlines will be impacted by the decision.
“Some employees have taken a temporary pay cut, some have been put on Leave Without Pay temporarily,” CNBC-TV18 quoted Jet Airways CEO Sanjiv Kapoor as saying.
Company sources told Moneycontrol that even Kapoor has taken a substantial pay cut while almost half the staff of the airlines have not been affected by either (pay cut and LWP).
Earlier in the day a report said that 60 per cent employees of the airlines including its senior managers have been sent on LWP. But Kapoor in a tweet rubbished news, stating that it was “100% false information,” and clarified that not a single soul will be sacked.
The news comes on a day the Jalan-Kalrock Consortium, the company which won the bid for restructuring the company, said that it might take difficult near-term decisions to manage cashflows.
The consortium’s resolution plan was approved by the National Company Law Tribunal (NCLT) in June last year but the airline, which also got its air operator certificate revalidated by aviation regulator DGCA in May this year, is yet to start operations.
The company has now told the National Company Law Appellate Tribunal (NCLAT) that it wouldn’t be able to pay additional money for the provident fund and gratuity dues of around ₹250 crore to employees.
“… 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 Jalan Kalrock Consortium (JKC) said in a statement.
It did not elaborate on the decisions that could be taken to manage the cashflows. “We have not breached any term of the resolution plan, and we remain committed to the revival of Jet Airways,” the consortium said, adding that it has made significant progress to relaunch the airline.
The statement also comes against the backdrop of the NCLAT last month, directing the consortium to pay the unpaid provident fund and gratuity dues of employees of the carrier.
“After the NCLTs approval, all conditions precedent, as outlined in the resolution plan, were completed by May 20, 2022, and the necessary filings in this regard were made before the NCLT on May 21, 2022. JKC has deposited ₹150 crore as required under the court approved resolution plan with the lenders, with the remaining amounts to be invested only after next steps of NCLT are fulfilled in terms of handover of the company to us,” the statement said.
(With inputs from agencies)