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| A-I unions oppose 50% cut in productivity pay |
| BS Reporter / New Delhi Aug 22, 2009, 01:00 IST |
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Say they won't go on strike so that govt does not 'make mileage' out of it.
A majority of the unions representing the 32,000 employees of state-owned Air India have rejected the management's decision to cut the productivity-linked incentive (PLI) scheme 50 per cent across the board till a new formula is fixed in three months.
The loss-making airline's board discussed the proposal with the unions on Thursday and another meeting is scheduled for Tuesday.
PLI accounts for around 40 per cent of Air India's Rs 3,000-crore annual wage bill, so halving it would save the airline Rs 1,200 crore, significantly more than the Rs 500 crore wage bill reduction that Chairman and Managing Director Arvind Jhadav and his team had initially planned.
Air India's PLI scheme is anomalous in that it accounts for 40 per cent of the salary for senior executives and 20 to 30 per cent at lower levels.
Cutting back on the wage bill is imperative for the airline, which runs both domestic and international services under the Indian Airlines and Air-India brandnames respectively. It made losses of Rs 5,000 crore last fiscal and is said to be losing Rs 200 crore a month this year.
But the biggest challenge would be to deal with the unions. “We have not agreed to any such scheme, neither are we ready to get any cut in our PLI,” said YV Raju, general secretary, All India Aircraft Engineers Association.
Added Dinakar Shetty, president of the ACEU, which claims to represent 70 per cent of the employees: "There is no question of us agreeing to this one-sided decision taken without any consultation."
“The airline board may decide anything but we have not accepted any of their proposals, as of now. We are meeting our union members and plan to meet with the board on Tuesday to convey our decision,” said a senior member of the Air India Officers Association, which represents the airline's officer cadre.
He added, however, that the unions were not planning to go on strike, since, “that is what the government wants so that it can make some mileage out of it”.
Employees say the PLI has become virtually a surrogate wage revision because the company has not increased in salaries since 1995. The company ignored the recommendations of the Mohan committee on salary revisions for public sector undertakings in 1999-2000. Also the two Pay Commission recommendations (1997 and 2008 ) were not implemented because the airline was making losses.
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