In an attempt to bring in efficiency in its functioning, Tata Group-owned Air India has announced a voluntary retirement scheme (VRS) for permanent employees, who have completed 55 years of age or 20 years of continuous service with the airline. This move will help the airline let go about 3,000 employees.
Additionally, for some cabin crew, clerical and unskilled staffers, the VRS eligibility age has been relaxed from 55 years to 40 years. “An ex-gratia amount will also be provided to the aforementioned employees, who apply for Voluntary Retirement from 1st June 2022 to 31st July 2022 as a one-time benefit,” according to an order signed by Air India chief human resources officer Suresh Dutt Tripathi dated June 1. However, there is no such provision for pilots, and as airlines expand, there is growing need for pilots. On Monday, Air India said it has invited applications from its employees up to age of 40 having current Airbus A320 endorsement for the post of senior trainee co-pilots.
🚨 Limited Time Offer | Express Premium with ad-lite for just Rs 2/ day 👉🏽 Click here to subscribe 🚨
“Further to above, employees who apply for Voluntary Retirement between 1st June and 30th June 2022, will also receive an additional incentive over and above the Ex-Gratia amount,” the order said.
Best of Express Premium
The order added that the VRS has been offered to permanent employees of Air India as per the “existing applicable service regulations/standing orders of Air India”. As per the disinvestment conditions, the Tata Group cannot layoff Air India employees for a period of one year from the date of transaction close, and can offer VRS in the second year. Air India has 12,085 employees — 8,084 permanent and 4,001 contractual. In addition, its low-cost arm, Air India Express has 1,434. As of October, government had said about 5,000 permanent employees were expected to retire over 5 years.
The airline, under government control, had been trying to offer VRS since over a decade, but with marginal-to-no success. In 2011, when its annual wage bill was roughly Rs 3,600 crore, a Group of Ministers led by the late Pranab Mukherjee had asked to offer an attractive VRS, which would be in part funded by the government. Though the plan never saw the light of day, it had aimed at taking off at least 4,000 staff off company rolls, with cost of up to Rs 400 crore.
In 2009, when the airline tried to cut its staff wage bill, it had to face a week-long strike from its pilots, ground staff and other workers. The 2011 plan was finally approved in July 2012, as part of which all permanent staff who had till then served for 15 years or had attained 40 years of age were to be given the VRS option. However, it was shelved by the government in January 2014, citing high attrition rate and its disinclination to provide committed funds to Air India.
Three years later, in 2017, reports of Air India drawing up another VRS being planned to offer voluntary buyouts to just over a third of its 40,000 employees resurfaced.