Home / Companies / News /  Jet Airways’ pilots union to move NCLT over salary payments

The pilots union of Jet Airways (India) Ltd will file a plea against the grounded airline at the National Company Law Tribunal (NCLT) for non-payment of salaries and not providing a provision for gratuity payment to its staff, two senior members of the union said.

The union, the National Aviators Guild (NAG), counted about 1,100 of the airline’s 1,600 pilots as its members before the grounding of the carrier. “We (NAG) will file a plea at Mumbai’s NCLT early next week," said one of the two people, requesting anonymity.

“The airline hasn’t paid us salaries since January. Also, they haven’t made any provisions for gratuity, which needs to be addressed by the court."

Jet Airways, which stopped its operations in April after running out of cash, has not paid salaries to its senior employees, including pilots, engineers and senior management, since January. The debt-ridden carrier has also not paid other employees since March. Jet Airways spent 781.19 crore as remuneration for its employees during the October-December 2018 quarter.

“While some pilots have landed themselves jobs at other airlines, there are several pilots, especially junior pilots, who have found it difficult to get jobs," said the second person cited above, adding that National Company Law Tribunal may well be a last-ditch effort to recover dues.

Two operational creditors of Jet Airways, Shaman Wheels Pvt. Ltd and Gaggar Enterprises Pvt. Ltd, had on 10 June filed separate insolvency pleas against Jet Airways at the National Company Law Tribunal, Mumbai, for recovery of their dues.

The pilots union will jump the queue ahead of secured creditors if Jet Airways heads to liquidation, said Ravi Kini, managing partner of law firm MV Kini and Associates.

“Under IBC (insolvency and bankruptcy code), once a case heads for liquidation the waterfall mechanism comes into effect. Under waterfall mechanism the dues of workmen are settled first before the secured creditors," Ravi Kini said, adding that unionized pilots of Jet Airways have good chances of recovering their dues and will need to approach the court as pilot workmen.

The National Aviators Guild’s plans to approach National Company Law Tribunal could further impact lenders’ recoveries from Jet Airways. In case Jet does not end up being liquidated and insolvency is resolved then the new investor who bails out Jet would need to take on the liability of Jet, including salaries, Kini added.

In any case, if Jet Airways is admitted to the National Company Law Tribunal, under bankruptcy resolution lenders may recover only a fraction of the 8,400 crore the airline owes them.

The total liabilities of the airline, including unpaid salaries and vendor dues, are nearly 15,000 crore.

Mint reported on Tuesday that the Hinduja Group and Etihad Airways PJSC may not proceed with plans to resurrect the airline, dealing a severe blow to rescue efforts.

Shares of Jet Airways on Tuesday slumped as much as 14.8% to an all-time low of 106.3, Reuters reported.

The company has shed nearly 69% in one year as of Monday’s close. On Tuesday, Jet Airways’ shares fell 10.6% to 111.95 on BSE, underperforming the benchmark Sensex’s 0.42% gain.

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