Government may restrict employee benefits for Air India workforce until privatisation

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With Air India’s privatisation right around the corner, the government may limit employee benefits till a private owner takes over. This means that the new owner who buys the company can draw up new terms for its employees and can tweak the compensation packages that would make it more beneficial and attractive.

Employees bat for benefits

Employees of the cash-guzzled airline are entitled to various benefits including free tickets for several segments. However, the number of free tickets issued were fixed in a year but was extended to the immediate family members of the employee, that includes spouse and dependant children.

In a petition to the civil aviation ministry last year, the Air India Employees Union had asked for the medical scheme, provident fund, and leave encashment for service and retired employees to remain the same even after privatisation, as it is critical for their well-being.

Delay in privatisation process

Though certain benefits are beyond the industry norms, some bidders have raised concerns over offering liberal packages prompting the government to deliberate internally. In fact, one major reason as to why the privatisation process has been delayed beyond the target date is due to the employee benefits and Covid-19 among others.

The airline is on course to become privatised during this financial year and would see a fresh Rs 1,900 crores from the government once the supplementary demand for grants is approved, said a person familiar with the matter.

The Centre will call for financial bids in September and all efforts are being done to make sure that the sale is completed in the current fiscal year.