Jet officers’ union challenges revival plan in NCLAT

Jet Airways aircraft are seen parked at the Chhatrapati Shivaji Maharaj International Airport in Mumbai. File

Jet Airways aircraft are seen parked at the Chhatrapati Shivaji Maharaj International Airport in Mumbai. File | Photo Credit: Reuters

The All India Jet Airways’ Officers and Staff Association has filed an appeal in the National Company Law Appellate Tribunal (NCLAT) challenging the resolution plan of the prospective new owners of the airline, the Jalan-Kalrock consortium, and demanded that proceeds from the liquidation of assets be used for payment of dues owed to the staff.

The challenge by the union, which represents almost 5,500 white-collared personnel of the defunct airline, comes at a time when the Jalan- Kalrock consortium (JKC) has sought a hearing from the NCLAT for a formal transfer of the airline’s ownership after it completed various preconditions for implementing its revival plan, including receipt of an air operator’s certificate from the DGCA. JKC aims to restart flights in the July- September quarter.

The association, which submitted its plea to the NCLAT on Wednesday, is demanding that the resolution professional assess the liquidation value of Jet’s assets, and ensure that this amount is used to clear dues owed to the employees as laid down under Section 53 of the Insolvency and Bankruptcy Code (IBC).

The union has demanded payment of gratuity, privilege leave and unpaid salary and bonus and said that the resolution plan submitted by JKC violates labour rights, according to Narayan Hariharan, a former senior vice president at Jet Airways.

Proceeds from the sale of liquidation of assets have to be distributed in a certain order of priority. Insolvency process costs have to be paid first, followed by workmen’s dues for the 24 months preceding the start of liquidation and then debts owed to creditors. Wages and any unpaid dues have to be also paid to employees other than workmen for the period of 12 months before the liquidation.

As per the resolution plan submitted by JKC and approved by NCLAT in June 2021, the new owners would pay a total sum of ₹52 crore to workmen and employees apart from a 0.5% stake in the airline out of the total investment of ₹1,345 crore. The amount of ₹52 crore would be spent to pay a token sum of ₹11,000 to each employee and workman and a future ticket worth ₹10,000. Workmen would also get ₹5,100 in cash for medical expenses, another ₹5,100 as school fee reimbursement for children, one-time mobile recharge of ₹500 and a phone or laptop out of the existing assets.

This proposal, however, lapsed after only 35.1% out of the 8,973 eligible employees voted in favour of the offer, while 61.6% abstained.

Other employee unions such as the Jet Airways Maintenance Engineers’ Association as well as the Bharatiya Kamgar Union have also moved the NCLAT opposing the resolution plan.

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Printable version | Jun 10, 2022 3:00:09 pm |