Jet Airways’ CoC vote against paying one month’s salary to remaining employees

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Jet Airways’ CoC vote against paying one month’s salary to remaining employees

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The Committee of Creditors (CoC) of Jet Airways has once again voted against paying one month’s salary to the airline’s remaining employees. The airline staff have not been paid for several months as the lenders have repeatedly refused to give any additional funds.

The airline is also in the midst of taking a few cost-cutting measures, for which the contract of over 30 people working in the Asset Preservation Team have been terminated.

Jet Airways was dragged to the National Company Law Tribunal (NCLT) over unpaid dues in June 2019. The tribunal had considered Jet Airways as a ‘going concern’, after which a few of Jet Airways’ assets including its aircraft, engines, and properties were being preserved. Some of those had been leased out to industry players in order to recover some costs.

Earlier too, the employees had approached the NCLT requesting them to at least pay a month’s salary. The NCLT had directed the Resolution Professional to raise this issue with the CoC.

According to a source, the issue of paying salaries too was raised during the meeting and the CoC was to vote for it. “Jet’s employees had demanded one month’s salary. The RP had pointed out the same to the CoC. The CoC was to vote on the same however, it did not manage to receive the minimum 60 per cent votes in favor of giving the salary.”

BusinessLine was also given to understand that the company is in the midst of undertaking cost-cutting measures. The source said, “The CoC had decided to reduce the number of people working in the Asset Preservation Team along with other measures.”

The Asset Preservation Team had over 200 people on it payroll of Jet and were drawing partial salaries for managing the aircraft, finance, strategy among other things. “Between the previous meeting last week of April and the meeting held on May 6, contracts of at least 30 people were terminated,” the person said.

Meanwhile, the RP of the grounded Jet Airways has also served a notice to SpiceJet seeking payment for engines from aircraft owned and flown by Jet Airways were mounted on the fleet of SpiceJet. SpiceJet was to pay a lease amount for the same.

Source- Business Line.