Removal of Employees.

A couple of days back, Jet Airways removed 1900 employees, some of whom were on probation and some yet to be confirmed. All of them were in their early twenties. This came as a rude shock to them as they were handed over pink slips without any formal notice. Most of them were seen crying, and did not have words to explain. It was a pathetic scene.

Mustering courage a while later, they staged demonstration at Mumbai and Kolkata airports demanding their re-instatement. Some of them prevented transactions at the counters. Political leaders were quick to support them and threatened the Management that they would not permit the airlines to take off. The Civil Aviation Minister was taken by surprise and assured the employees that he would speak to the Management.

A report in THE HINDU dated October 16th, writes that according to the airlines Executive Director “These measures are to ensure that the airline remains economically viable in the future. The 1900 employees have to go to ensure the jobs of the remaining 11,000 jobs at jet.” Its CEO Wolfgang Prock-Schauer further states “The aviation Industry in India, a $6 billion turnover industry, is expected to lose $2 billion in 2008-2009. Its economic viability has been severely affected by the record high fuel prices and most recently due to the crisis of the financial markets globally and the downturn in traffic”.

This chunk removal came after Jet Airways forged an alliance with Kingfisher Airlines, its competitor. This added further fuel to the minds of the employees.

With pressure building all around for their reinstatement, Mr.Naresh Goyal, Chairman of the Jet Airways, withdrew the order saying they are “my family and can join work”. He said he is unaware of his management’s decision! If the Chairman is unaware of this decision, Its Management Information Systems are not in proper shape, and its decision making process appears defective. To hear this, is all funny and reveals how these Corporates work and take decisions.

In the wake of this Air India, the public sector airline and once the pride of India, offered a voluntary scheme to about 15,000 employees to go on leave for three to five years without pay. Where will they go? It is not only impetuous, but an insensitive decision.

It is a fact that the aviation Industry in India is passing through a crisis. Are the employees responsible for this?

It is shocking to learn that airline industry in India has approached the Civil Aviation Ministry for a staggering amount of Rs.5000 crores as relief to come out of the rut. It is reported that Jet airways and Kingfisher owe the oil companies Rs.2000 crores, and “all the airlines together owe Rs. 1000 crores to Airports Authority of India”. That is their credit worthiness!! They certainly need to look into themselves and their entire operations. There would be many areas where costs could be certainly pruned. Businesses could be run without indulging in extravaganzas, yet remain in competition with quality products and services. I was a Cost Accountant, and I say this out of experience.

A vast majority of urban middle class in India think twice before taking a flight on personal grounds. The air fare structure is still prohibitive, though of late passenger traffic is increasing steadily. The government and the airline industry need to sit together to revise the fare structure if they wish to make it competitive and affordable.

It is often observed that these Corporates, no matter to which industry they belong, they sack the employees first whenever they are faced with a financial crisis. Their salaries do not constitute a major part of the expenses. The middle management and the lower staff become victims to reckless business strategies of the top management, whose salaries are astronomical and NOT commensurate either with their intellectual abilities or decision making prowess.

The evidence is very much visible about the Chief Executives of top companies involved in the Finance melt down in America. They do not get sacked, and instead rewarded with “bail out package” out of tax payer’s money.

Many economic issues emanate from employees within the company, and as citizens outside the company. Many management gurus have stressed the importance of human resource as being the strength of a company. If it is true, then why fire the employees? Does not the top management have moral responsibility towards its employees who have contributed to the profits of the company? Where are the ethical practices?

In my opinion, the foreclosures to housing mortgage loans, which triggered the financial crisis in USA, could be attributed to the job cuts, job losses and employee removals. If their jobs are secured, the repayment could have been steady, and perhaps the crisis could not have taken place. A similar situation seems to be on the anvil in India.

The hire and fire policy en masse sometimes followed in the private sector needs to be reviewed. It is a different issue altogether if the company declares bankruptcy and close its business. Even then, the compensation package to the employees should be reasonable, just and adequate.