NEW DELHI: As expected, disgruntled ex-employees of Jet Airways are approaching higher authorities to challenge the revival plan of Kalrock-Jalan consortium.
Bharatiya Kamgar Sena (BKS) and Jet Airways Cabin Crew Association have filed an appeal in the National Company Law Appellate Tribunal (NCLAT) against the National Company Law Tribunal’s June 22 order approving the consortium's Rs 1375 crore resolution plan. The unions claim that the consortium fails to protect workers’ interests and violates labour laws.
They added that the core principle of the Insolvency and Bankruptcy Code is to protect the interests of all stakeholders but the resolution plan does not protect workers’ interest and instead jeopardizes them. It said that if the approved resolution plan is implemented then the core principles of Industrial Disputes Act 1947 as well as other labour laws will be violated.
It was a much expected move by former employees as many experts believed that they are compensated poorly in the resolution plan. Employee claims worth Rs 1,265 crore were admitted by the resolution professional but the consortium proposed payment of only Rs 52 crore. This roughly translated to Rs 23,000 each for eligible employee as against their dues that stands anywhere between Rs 3 lakh and Rs 85 lakh.
However, at present it seems the employees won't be receiving any benefits. The management needed at least 95% of employees consent to pass the benefits it had mentioned in its. The consortium informed on Thursday that the proposal has lapsed as only 35.1% out of 8,973 eligible employees voted in favour of the offer while 61.6% abstained from voting.
Jet Airways ceased operations in April 2019 due to lack of funds and insolvency proceedings against it began in June. After many rounds of bidding, the consortium of Kalrock Capital and Murari Lal Jalan’s was selected as the successful bidder for the airline by its lenders in October 2020.
The Mumbai bench of NCLT then approved its resolution plan, giving hopes of a revival- a first in the aviation industry. The consortium had then said that would infuse about Rs 900 crore towards capital expenditure and working capital requirements to bring back Jet into the skies, expectedly by end of this year.
However, the consortium faced its first major obstacle when NCLT said that Jet could not have historical right over its slots at major airports. Now that the ex-employees are reaching out to NCLAT, it could possibly delay the Airlines' second take-off.