Court suggests paying part of Kingfisher staff salary

Why don’t you pay at least a portion of salary to your employees who are facing a difficult situation due to non-payment of monthly salary?

The Karnataka High Court posed this question orally to senior counsel representing UB Holding Ltd. (UBHL), which is the holding company of Kingfisher Airlines Limited (KAL), during hearing of petitions seeking winding up of both these companies.

“They [employees] have worked for you. Paying your employees is more important than making payments to the banks [which are seeking liquidation]. The banks can wait. These employees are finding it difficult to survive due to non-payment of salary. You can’t keep them hungry. Why don’t you pay at least a portion of the amount due to them…,” observed Justice Ram Mohan Reddy.

The court posed this question when counsel representing employees pointed out that the employees are facing a difficult situation as the Income Tax Department has issued notice to them for non-payment of Tax Deducted at Source (TDS) as KFL had failed to remit TDS deducted from their salaries.

Company stand

Meanwhile, Senior Counsel Uday Holla, appearing for the UBHL, submitted that the company would try to make some payment while pointing out that the company was contemplating paying some amount to its employees from the amount realised from the recent sale of United Spirits Limited shares to Diageo Plc, but it was difficult due to restrictions imposed on utilisation of sale consideration by the court.

Mr. Holla also pointed out that salary due for all categories of employees is about Rs. 27 crore per month.

The court postponed further hearing to August 27 while asking BNP Paribas and other creditors to file their responses to the statement of UBHL.