Jaipuria institute of management

Industrial relations assignment work

Topic: Jet Airways -disputes B/W employer and

employees and their resolution

Submitted to:
Submitted By:
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Pro. Athar Mahmood Pavitra kumar
(JIML-09-103)
 Jet airways: Disputes between employer
and employee and their resolution.
September 2009
When the owner of a private airline calls his pilots "terrorists," something is serious. But
that is exactly what Jet Airways chief Naresh Goyal did at that point of time. On the third
day of a mass sick leave by his pilots, Goyal lost his cool. "They are behaving like
terrorists," he said. "They cannot hold the country, passengers and the airline hostage. We
won't tolerate such blackmail."

In trying to control the damage, Goyal brought back his public relations agency, which
earlier had been shunted to the sidelines, to handle the media. He was advised to start
talking about the "Jet family" and how each and every employee was dear to him.
"'Terrorist' was poor PR," says Jitender Bhargava, executive director at national carrier
Air India.

Jet's tug-of-war with its pilots is just the latest among several difficult situations it has
faced in recent months, and is symptomatic of pains being felt across India's civil aviation
industry.

Trouble had been brewing at Jet Airways for some time . In October 2008, huge
protests ensued when 800 cabin crew and ground staff were fired overnight. (An
additional 1,000 were told they would be next to go.) Employees got to know of their
dismissal when their morning pickup didn't arrive at their homes. With politicians
breathing down his neck, Goyal made a PR event out of it. In a late-evening news
conference, he announced that all terminated employees would be taken back. "They are
like my family. I cannot see them unhappy," he said. "I could not see tears in the eyes of
my employees. I could not sleep when I saw what had happened."

Complaints in 'Epidemic' Proportions

Jet had fired for an unspecified breach of discipline two pilots who had
joined the union; management said it did not have to provide a reason for their
termination. More dismissals followed.

On September 8, 420 pilots called in sick. Over the next four days the
number grew daily, to 539, about half of Jet's approximately 1,000 pilots. The protest
took its toll: From September 8 to September 12, Jet had to cancel 71% of its flights,
including 85% of its domestic flights and 40% of its international flights.

On September 13, an accord was reached, though little seems to have

been achieved. "It's time to get back to work," Goyal told his staff. "It is now time to look
to do what we know best -- fly." The agreement between Jet Airways management,
the pilots' union, and representatives of pilots who weren't union members, called
for "sick" pilots to report to work immediately, for dismissed pilots to be taken
back, for no action to be taken against any pilot for the protest, and for a
consultative mechanism to be set up to discuss similar problems in the future.

Yet several issues remain unresolved, and many pilots were still fuming. Among
the issues was management's ability to terminate them without assigning a reason.
"Don't I even have the right to be given a simple explanation as to why I lost my
job?" Sam Thomas, one of the first pilots to be dismissed, asked Jet executive director
Saroj Datta on business channel CNBC TV-18. Datta's response: "We are fully and
legally permitted under contracts for anyone's services to be terminated [without
explanation]." The pilots denied that they went on strike. (Thomas claimed that an
epidemic struck.) Management denies that the union's formation had anything to do
with pilots' dismissals.

"These pilots had made no demands apart from their basic right to form a union,"
says International Transport Workers Federation civil aviation secretary Gabriel
Mocho. "Jet Airways had sacked pilots for trying to form a union, in direct contravention
of not only international freedom of association conventions, but also Indian national law.
If anyone was holding the country to ransom, it is Jet's management. What has made
several airlines disappear is mismanagement and excessive greed, not their workers'
actions."

"One cannot say that their demand for a union is not justified, because in a
democratic country unions are allowed, But creating a forum where all
representatives come together and participate in addressing the issues is a far better
way of resolving the problems." ---------------------(positive form of forming a union)

A Business Standard editorial provided another viewpoint. "Naresh Goyal has asked
how pilots earning $8,000 a month can be equated with shop-floor workers who are
entitled under the law to launch industrial action, like striking work. His argument is that
pilots get paid very well, and are in charge of the planes they fly -- that is, they perform a
vital supervisory/management role in that they command a plane and its crew. No one,
for instance, has heard of a ship's captain going on strike on a wage issue. So how are
airline pilots different?... To say that a manager has the right to strike is surely an
oxymoron."

What started as firing of 3 pilots of Jet Airways for starting a trade Union had
catapulted into a huge storm for whole of Indian Aviation Industry.
Airlines were going to suffer and suffer badly due to this! The events in continuation
seem to have bought aviation employees together. According to the report in ET – 50,000
airline employees in India were coming together to form a nation-wide trade union that
will represent pilots, engineers, maintenance staff, cabin crew and ground handling staff.

Jet Airways Pilot strike as well as Air-India strike were successful to say the least. Jet
Airways lost at least Rs 400 crore due to the five-day strike in the first week of
September, while Air India lost Rs 100 crore from the four-day strike later in the month.

In view of this, pressured Airline companies had to cut losses, by reducing staff,
bringing down employee perks as well as their salaries.

However, with this development, they were further restricted in taking any severe
actions to bring down their costs, related to their employees, as they will be looking
at Industry-wide shutdown which would be disastrous (in case of a complete strike by
this potential all Indian trade Union).

An Industry in 'Survival Mode'

Consider Jet's finances. According to a report by Enam Securities, in the April-June

quarter, the first of the fiscal year, Jet had operating revenue of US$470 million, down
19% from the same period last year. (These do not include the numbers for its low-cost
subsidiary, JetLite.) In the international segment, the company has given nine aircraft on
wet lease (providing the aircraft and crew) to foreign airlines. The US$47 million lease
figure "was the key driver for cash profits." The overall outlook, however, is bleak. Enam
projects a consolidated loss after tax of US$176 million in 2009-10 and US$78 million in
2010-11 (including JetLite, which has turned profitable). In 2008-09, Jet lost US$456
million.