Air India Privatization: No Employee Will Be Fired For 1 Year; Job Guarantee Like PSU Banks?

The employees of Air India, similar to the employees of Government Bank, will also be given job security for one whole year after privatization.

Recently, NITI Aayog, the public policy think tank of the Government of India, suggested that the employees of Government Banks that will be divested should be given a one year only job protection.

Air India Employees To Be Granted One Year Job Protection

The government has drafted a request for proposal (RFP) that was also shared with shortlisted bidders. In this RFP, the government has recommended that the existing employees of Air India should be retained for one year after privatization.

Through this, the government is setting a precedent for all public sector undertakings (PSU), including banks, on the block for selloff.

In 2020, there was news that the Govt has allowed the new owners to not only sell their assets such as airplanes but also fire employees, in order to reduce losses and make profits.

When the new owners of Air India take over the state carrier, they can have the liberty to sell off these grounded aircrafts, and thus, fire employees who are no longer needed.

This has been confirmed by an unnamed Govt official, who said, “Looking at the prevailing conditions acting as an overhang on the aviation sector, the new entity acquiring AI will be allowed to sell a few aircraft or return them to the lessor. They are anyway grounded due to lack of demand. With some aircraft sold, the manpower requirement, too, will drop. Proportionately, there can be some layoffs..”

However, as per the current disinvestment rules, the new owners of Air India cannot fire any employee till the first year ends. 

No Flexibility Or Negotiations For Cutting Retention Period Any More

The draft RFP asks for the existing employees to be retained for a year. However, this does not align with the previous stance of the government, which stated that employee retention should be negotiated for at least two years. 

Additionally, the government might not dilute it any further. An official has revealed, “The government is clear there won’t be any flexibility or negotiations for further cutting the employee-retention period.”

The airline’s preliminary information memorandum (PIM) that was shared in January 2020 stated that the airline had 14,032 employees. Of these, 9426 were permanent employees and also included 948 on deputation to other firms as of November 1, 2019.