Air India defends leave-without-pay scheme, says financial situation very challenging

Air India on Friday defended its leave-without-pay (LWP) scheme and said it was a “win-win” situation for the employees as well as the management as its financial situation is very challenging due to the coronavirus pandemic.

The national carrier in a press statement said the scheme primarily enables employees to proceed on LWP “on voluntary basis”. While the scheme is voluntary in nature, if it doesn’t get a good response from employees, the board has authorised Chairman and Managing Director Rajiv Bansal to forcibly send employees on leave.

Employees who opt for the scheme will have to notify their department heads by August 15.

The airline had issued an internal order on Tuesday asking its departmental heads and regional directors to identify employees, based on various factors like efficiency, health and redundancy, who will be sent on compulsory LWP for up to five years.

“Air India is in a very challenging financial situation and is taking recourse to several initiatives with a view to ensuring the continuance of its operations,” the airline said in the statement. “The LWP scheme is a win-win situation for both the management as well as employees as it provides flexibility to employees and simultaneously reduces the wage bill for the company,” it added.

Under this scheme, the airline said, the management can pass an order requiring the employees to compulsorily go on leave for a period of six months or two years (extendable up to five years). The airline’s board approved this scheme on July 7 and said that the management will make sure that the scheme is implemented with complete fairness and transparency as per prescribed procedure.

Employees will be chosen for the compulsory LWP provision taking into consideration suitability, efficiency, competence, quality of performance, health, non-availability and redundancy, it said.

A notice issued by the airlines human resources department earlier said, “during the period of leave without pay, employees will not be paid any basic, dearness allowance or other benefits like pension, gratuity, provident fund, increment. They shall also lose their seniority with reference to juniors.”

On Thursday, TMC MP Derek O Brien slammed Air India, saying its LWP scheme violates labour laws and is an “obvious ploy” to protect the top management and sacrifice other workers.

The airline has a debt of around ₹70,000 crore and the government started the process to sell it to a private entity in January this year. The national carrier’s net loss in 2018-19 was around ₹8,500 crore.

Civil Aviation Minister Hardeep Singh Puri on Thursday said equity infusion of ₹500-600 crore every year is not sustainable and cost-cutting in Air India is necessary.

He said that even if Air India wants financial assistance from the government, it may not be possible as the Centre has to meet other demands too such as providing relief to vulnerable sections of the society amid the coronavirus pandemic.

The aviation sector has been significantly impacted due to travel restrictions imposed in India and other countries in view of the coronavirus pandemic. All airlines in India have taken cost-cutting measures such as pay cuts, LWP and firings employees in order to conserve cash flow.