New Delhi: The government has said that the new owner of the disinvested airline, Air India, will not be able to retrench employees for a period of one year from the closing date and that employees will be eligible to maximum benefits under the Voluntary Retirement Scheme (VRS) if retrenched in the second year from closing. In response to a question raised in the Lower House of Parliament on disinvestment of Air India, Minister of State (MoS) for Finance Dr Bhagwat Kishanrao Karad said, "The sale is on a 'going concern' basis and the employees shall continue to be employees in terms of the agreed SPA (share purchase agreement) signed on 25th October, 2021."
"Employees cannot be retrenched for a period of one year from the closing date and will be eligible for voluntary retirement scheme with maximum benefits in case of retrenchment in the second year from closing," said Dr Karad.
The employees will also be eligible for other benefits like gratuity, provident fund benefits, passage rights, in accordance with applicable law/ industry practice, said the minister. Employees have been allowed to stay in the residential colonies for a six-month period from closing.
There is a provision post-closing for ESOP scheme for employees. Medical benefits will be provided to the existing employees by the strategic buyer as per the industry practice. The government has the obligation to provide medical facilities to all retired employees (as on closing date) and eligible existing employees (who have attained 55 years of age or above or have completed 20 years of service) and their spouses, post retirement, the minister told the Lok Sabha.
"As per the terms and conditions of the transaction, the buyer shall ensure that Air India and its subsidiary (AIXL) continue their business of providing air transport services on a going-concern basis for a period of three years at the least from the closing date. No specific stipulation regarding equity infusion by the buyer, post transfer, has been made in the SPA," said Dr Karad.
Earlier in October this year, the government named Tata Sons as the highest bidder for the privatisation of Air India. M/s Talace Pvt Ltd, a wholly owned subsidiary of M/s Tata Sons Pvt Ltd which won the bid, quoted an enterprise value of Rs 18,000 crore, of which the cash component is Rs 2,700 crore and the balance is the debt component.
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