Air India announced launch of voluntary retirement programme for employees

Air India has announced the launch of a new voluntary retirement scheme. The plan is for some long-term employees, including cabin crew. Contractual employees are not covered under the plan. The new scheme is for staff who are either over 55 years old or have completed 20 years of service, according to the Tata Group airline.  In addition, the management has established monetary incentives for individuals who choose VRS.

Voluntary Retirement Scheme is available to both private and public sector businesses in the following circumstances:

• Recession in the business world
• Competition is fierce.
• Foreign collaborations in joint ventures
• Mergers and acquisitions
• Product/technology obsolescence

Aim of the Voluntary Retired Scheme:

The company’s aim is to persuade a major portion of its workforce to voluntarily retire. After successfully winning the auction for Air India on October 8, last year, the Tata Group seized ownership of the airline from the Government of India on January 27 this year.

Eligibility criteria for Voluntary Retire Scheme:

• Employees who are over 55 years old or have completed 20 years of service are eligible for the new program.
• The VRS eligibility age for certain cabin crew workers and other sections of employees has also been lowered from 55 to 40.
• In addition, the management has established monetary incentives for individuals who choose VRS.

Employees who choose VRS are entitled to the following benefits:

• Employees who file for voluntary retirement between June 1 and July 31, 2022, will receive an ex-gratia payment under the new plan.
• Aside from this one-time payment, those who apply for voluntary retirement between June 1 and June 30 will receive an additional incentive in addition to the ex-gratia amount.
• In addition, the carrier is reducing the age requirement for cabin crew workers from 55 to 40 years.
• 45 days’ compensation for each year of service completed, or monthly emoluments at the time of retirement multiplied by the months of service remaining before the regular date of service, whichever is smaller.
• Provident fund (PF) and gratuity dues are paid to the employee.
• Compensation earned during VRS is tax-free up to a certain amount if certain conditions are met.
• Employees that choose VRS are also offered benefits packages by their employers. For example, the system may include a future planning session for the employee; assistance in managing funds received under the VRS; and firms may provide rehabilitative services to employees, among other things.

Air India employs 12,085 personnel, of which 8,084 are permanent and 4,001 are temporary, according to company figures issued in October of last year. Air India Express employs 1,534 people. All staff must be retained for a year, according to AI’s previous CMD Rajiv Bansal. If someone is fired or retrenched in the second year, VRS will be paid by the firm.

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