In an effort to bring efficiency in its operations, Tata Group-owned Air India has announced a Voluntary Retirement Scheme (VRS) for permanent employees who have completed 55 years or 20 years of continuous service with the airline. The move will help the airline to lay off around 3,000 employees.
Additionally, for certain cabin crew, clerks and unskilled employees, the VRS eligibility age has been reduced from 55 years to 40 years. According to an order signed by Suresh Dutt, Chief Human Resource Officer, Air India, “An ex-gratia will also be provided to the above employees, who apply for voluntary retirement in the form of lump sum benefit from 1st June 2022 to 31st July 2022. ” Tripathi dated June 1. However, there is no such provision for pilots, and as airlines expand, the need for pilots is increasing. On Monday, Air India said it has invited applications for the post of Senior Trainee Co-Pilot to support Airbus A320 from its employees up to the age of 40 years.
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“Above the above, employees who apply for voluntary retirement between June 1 and June 30, 2022, will also get additional incentives apart from ex-gratia,” the order said.
The order said that the permanent employees of Air India have been offered VRS as per the “extant in force service rules/Standing orders of Air India”. As per the terms of the disinvestment, the Tata group cannot lay off Air India employees for a period of one year from the date of the transaction, 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 branch, Air India Express, has 1,434. As of October, the government had said that around 5,000 permanent employees are expected to retire in 5 years.
Under government control, the airline had been trying to offer VRS for over a decade, but with little to no success. In 2011, when its annual salary bill was around Rs 3,600 crore, a group of ministers led by the late Pranab Mukherjee called for a lucrative VRS offer, which would be funded by the government. Though the plan never saw the light of day, it aimed to remove at least 4,000 employees from the company’s rolls, costing up to Rs 400 crore.
In 2009, when the airline tried to cut its employees’ pay bills, it faced a week-long strike from its pilots, ground staff and other employees. The 2011 plan was finally approved in July 2012, as part of which all permanent employees who had by then served for 15 years or had attained the age of 40 years were to be given the VRS option. However, the government postponed it in January 2014, citing high attrition rates and its reluctance to provide committed funds to Air India.
Three years later, in 2017, reports surfaced again of Air India preparing another VRS to offer voluntary purchases to just over a third of its 40,000 employees.