95% Jet employees must okay resolution plan, or lose perks
At least 95 per cent of Jet Airways’ employees will have to give their consent to the Kalrock-jalan consortium’s proposal or lose benefits offered to them under the revival plan.
Voting on the consortium’s offer for employees and workmen began on Monday and will be on till August 4.
The National Company Law Tribunal (NCLT) cleared the consortium’s proposal to revive the airline on June 22. While Jet Airways had admitted claims of around ~15,000 crore, the consortium has offered to settle claims of ~475 crore of financial and non-financial creditors. Employee claims worth ~1,265 crore were admitted and the consortium has proposed ~52 crore to settle all their claims.
Additionally, for the employees and workmen, the consortium has offered cash and non-cash benefits, including 0.5 per cent equity stake in the airline to those who were on the rolls of Jet Airways when it went into insolvency in June 2019.
A welfare trust will be formed by the staff and it will hold 0.5 per cent stake in the airline and 76 per cent stake in its ground-handling subsidiary. Employees and workmen would be paid ~11,000 and ~22,800, respectively. Each of the workmen would be given a phone, laptop or an ipad through a lottery basis and ticket vouchers worth ~10,000.
There were around 9,000 employees with the airline in June 2019 and that figure has dwindled to around 3,600.
Of them only around 175 employees who were part of asset preservation team were being paid salaries. The resolution professional did not account for salaries of the remainder (estimated at ~715 crore) as insolvency
resolution cost. The Kalrock-jalan consortium made this voluntary proposal for employees and workmen which if acceptable will be made available after the approval.
In case 95 per cent of staff do not vote in favour of the proposal, it will automatically lapse. The 0.5 per cent stake reserved for the staff and ~8 crore allocated for making cash payments to them will be given to the financial creditors. Only 50 of the existing staff will be absorbed in the airline and the rest will be transferred to the ground handling subsidiary as a part of the resolution plan.
An employee said that the ~11,000 or ~22,800 cash offer is a small consolation for the staff who have been waiting for the revival.
“There is no assurance of a job in the new entity. Moreover, if we get selected, it will be at a lower pay than what we earned in 2019,” said another staffer.