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Union Fears Air India Employees Will Suffer Hardship, Loss After Disinvestment

Ronak Chhabra |
Madras HC has issued notices to the major stakeholders in the Air India disinvestment process after Air Corporation Employees Union filed a writ petition to restrain the Centre from proceeding further.
Union Fears Air India Employees Will Suffer Hardship, Loss After Disinvestment

Image Courtesy: Business Standard

New Delhi: The Madras High Court (HC) has issued notices to the civil aviation ministry, Air India Limited (AIL) and Talace Private Limited (TPL), a company set up by the Tata Group to acquire Air India, demanding a counter-affidavit following the filing of a writ petition by the Air Corporation Employees Union (ACEU) requesting the court to restrain the Centre from proceeding further with the disinvestment of the carrier on Friday.

According to the petition, the ACEU—which claims to represent more than 4,500 Air India employees—believes that the Centre is “rushing” to disinvest in the airline “without taking into consideration,” the rights and interests of its employees.

The necessary measures to “ensure job security” of the current workforce have not been factored in, the petition stated requesting the HC to restrain the Centre from proceeding further with the disinvestment, at least, until the issues raised by the union are addressed. If the disinvestment is “completed”, the airline employees will “suffer grave and irreparable hardship and loss”, the ACEU argued.

The disinvestment of the debt-laden carrier was approved in October with TPL emerging as the successful bidder to acquire 100% shares of Air India along with its shareholding in two Air India Express Limited and Air India SATS Airport Services Private Limited. The transaction is expected to be completed by year-end.

As per the press statement issued by the Union finance ministry at the time of the approval, the interests of the employees and the retired staff were “taken care of” during the sale deal of the carrier, whose combined debt—including that of its affiliate companies—has crossed Rs 61,000 crore.

During the court hearing on Friday, the ACEU sought to challenge the Centre’s claim by alleging that the civil aviation ministry and the Air India management are only “acting unilaterally” thereby, “keeping the employees in the dark”.

According to the union, whose members include the cabin crew, aircraft equipment operators, drivers, instructors, supervisors, assistants, security staff, among others, the measures announced by the Centre ostensibly to benefit the employees post the disinvestment would not suffice to “protect” their interests.

During the approval of the sale deal between the Centre and the Tata Sons on October 8, civil aviation secretary Rajiv Bansal in a press conference had said that the carrier’s new owners will retain all the employees for, at least, one year post which they can be offered a voluntary retirement scheme (VRS). The gratuity, pension fund and post-retirement medical benefits of the existing and the past employees too would be honoured by the new owners, he had said. Air India has more than 12,000 employees with more than 9,000 permanent and the rest on a contractual or casual basis.

Uday Shankar, president, ACEU, told Newsclick that based on the service regulations of Air India and the erstwhile Indian Airlines under which the employees were appointed, the Centre should ensure that the new owner retains all the employees till they attain the age of superannuation, 58 years. Air India and Indian Airlines were merged in 2007.

Post-Air India disinvestment, we apprehend that the employees will lose their jobs in the near future in the name of cost optimisation. There are around 1,600 cabin crew members who have more than 30-35 years of service left. Their interests need to be considered,” Shankar said, adding, that for these employees to secure suitable alternative employment is “remote” given the current global aviation scene.

Moreover, Shankar argued, the measures announced by Bansal are also against what was agreed upon in 2020 between the union and the Air India management. In February 2020, a joint committee consisting of Air India general managers and its unions’ representatives had recommended that job security should be provided to all the employees till they reach the superannuation age, Shankar claimed. Newsclick couldn’t independently verify this claim.

Despite “repeated representations” regarding job security, Shankar said, neither the Centre nor the management has “disclosed” the contents of the share purchase agreement, which “must include clauses in respect of employees’ welfare”. “We also demand that, in case, the new owner refuses to retain the employees for more than one year, a VRS should be framed prior to handing over the company to the buyer,” Shankar added.

While issuing the notices, returnable by January 7, Justice V. Parthiban also granted two interim injunctions, as requested by the ACEU, restraining Centre and the buyer from evicting the employees from the residential accommodation provided to them by the management and also from discontinuing the medical benefits of the employees and the retirees. Earlier this year, the management had asked the employees to vacate the houses within six months of the disinvestment of the airline, regarding which they were asked to hand over an undertaking failing which they would be evicted.

If evicted, the employees and their families will be deprived of decent housing as the HRA paid to them is not sufficient,” Shankar said. “This is also because a fresh wage agreement signed between the union and the management is pending since 2007.”

To ensure that the disinvestment is completed smoothly, the Centre had given an in-principle approval to the continuance of medical benefits for the employees and the retirees post-disinvestment under the Central Government Health Scheme (CGHS) in August. Under CGHS, a contributory scheme, deduction is made from the salary depending on the pay grade.

However, the ACEU argued in the petition that the low basic pay has given rise to the “apprehension” that the employees will not be entitled to “similar medical facilities” after being brought under CGHS.

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