Jet Airways retrenchment imbroglio

Because of the down trend in passenger travel due to economic meltdown, Jet Airways decided to retrench, as per law, hundred or odd in flight employees, mostly women / girls. They would get retrenchment compensation as per law or if the terms of employment provides for more liberal retrenchment compensation, then the latter would be applicable For consecutively two days major dailies in Delhi gave considerable coverage in the newspapers and that too in the front page with photos of weeping girls who have been retrenched. There was ample TV coverage with discussion programmes only on the subject. In short, a hoopla was made after the incident. The retrenched employees went to Raj Thackeray and the latter agreed to intervene. In the meanwhile the Union Civil Aviation Minister, Mr. Praful Patel, purported to have advised ( warned? ) Naresh Goel, Chairman of Jet to take the retrenched employees back. Though denying any pressure from the Minister, Mr. Goel said that on ‘ humanitarian grounds ‘ the retrenched employees would be taken back.

Now consider the following:

· Each day thousands of workers are being removed from work ( mostly without any retrenchment compensation ) in the unorganized and even organized sectors in Delhi alone. If we take the country as a whole the figure would go up to a much higher level. Then what is that so special about the Jet incident, to make it appear as a national calamity.
· The employees of Jet who were retrenched, mostly belong to middle class and upper middle class. Was that the reason for the hoopla in the media. In any case most of the retrenched would not starve ( and many would get alternative jobs ), which is not the case of many of the workers removed from service everyday in the unorganized sector.
· Raj Thackery’s agitations so far were confined to protecting the interests of Maharashtrians. In this instance not even 10% of those affected were Maharashtrains. But why should he lose an opportunity when it is the retrenched employees who sought his help. Now others would also seek his help, giving him legitimacy not due to him.
· The unfortunate intervention of the Civil Aviation Minister ( though denied by him ) would encourage workers in other industries to approach their own respective Ministers for similar intervention ( and managements would be in a dilemma ).

And then there are larger and long term issues, such as:

· Industrial establishments cannot retrench workers without the approval of the Government. And Governments have been chary of giving such approval ( Between 1947 and now only in 100 or a few more cases approval was given ). This led to managements of industrial enterprises engaging contract labour directly or through contractors, whose services could be dispensed with straightaway, i.e., without the approval of Government.
· With technology upgradation being a continuous process and newer and newer machines being developed requiring less and less workforce, many a company decided not to modernize since the surplus workers cannot be retrenched, a loss to the company and the country.
· It is the same case with small scale industries. Many of the benefits allowed by Government would not be available if the small scale units go beyond a size stipulated by Government. Hence instead of expanding, managements of such enterprises started setting up new units for manufacture of same products, thereby the country being deprived of economy of scale of operation of such units..
· Requirement level of work force of any enterprise would go on changing, depending on several factors, such as, recession or speedy growth in the economy, the demand for goods / services of each enterprise at any time, competition, both internal and external, newer products with better value for customer being introduced, newer technology making obsolete existing type of goods and services, etc.,
· The incident dealt with in this note cannot be considered in isolation. There is economic melt-down. Airlines are functioning with low occupancy. Demand for export is shrinking.

Summing up: The hype created by the media on the incident is uncalled for and unfortunate. The Minister had no business to interfere in the matter. It is a negative message to foreign investment. Employees of other units faced with such a situation would now think in terms of agitating. Employers of units which want to retrench employees may plan innovative methods to achieve their objective.