VRS, ESOPs on the cards for Air India staff: Jayant Sinha
The government will take a host of steps to protect the interests of Air India (AI) employees after the sale of a 76% stake in the national carrier, the details of which are being worked out in talks with staff unions, minister of state for civil aviation Jayant Sinha said in an interview.
The minister also said that the divestment, expected to be consummated by September, is designed to ensure integrity and confidentiality at every stage of the sale. The employee protection plans under consideration include a voluntary retirement scheme (VRS), an employee stock option (Esop) scheme, a government-funded scheme to meet the medical expenses of retired employees and settlement of past dues from the merger of Air India and Indian Airlines.
“Now that the disinvestment process has kicked off, we have started formal negotiations with various worker unions including multiple pilot unions, cabin crew unions and engineers’ union. In consultation, we will determine the right level of protection and who should bear the cost. It is possible some employee protection cost may be provided by the government,”
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the minister said, adding that one example is the medical expense of retired employees.
The period of protection for employees from the date of consummation of the transaction as well as the terms of VRS will be given in the request for proposal.
“There are two parts to a VRS. One, how long the employee will be protected after the transaction closes legally. We are still a year away for the transaction to close. The second issue is the terms of the VRS. Those are some of the things we are looking at right now.” said Sinha.
Employees will be offered stock options from the government’s residual stake of 24%. “The principle is that every employee should feel she has a significant material stake in the company’s future prospects,” the minister said.