Jet Airways Pilots Union Likely To File Plea With The National Company Law Tribunal Over Unpaid Salary, Gratuity Payments

The National Aviators’ Guild (NAG), which is the pilots union of Jet Airways (India) Ltd, plans to file a plea with the National Company Law Tribunal (NCLT) early next week.

The plea will be filed at the NCLT for non-payment of dues as well as not providing a provision for gratuity payment to its staff.

The grounded airline which stopped operations in April has not paid salaries to its senior employees including its pilots, engineers as well as senior management since January 2019, while other Jet Airways employees have not received their salaries since March this year.

Jet Airways’ total liabilities, including unpaid salaries as well as vendor dues, are nearly Rs 15,000 crore.

Earlier, two operational creditors of Jet Airways, Shaman Wheels Pvt Ltd and Gaggar Enterprises Pvt Ltd had filed separate insolvency pleas on June 10 against Jet Airways at the Mumbai bench of the National Company Law Tribunal, Mumbai, for recovery of their dues.

If Jet Airways heads to liquidation, then the pilots union is expected to jump the queue ahead of secured creditors, since under insolvency and bankruptcy code, once a case heads for liquidation, what is known as the ‘waterfall mechanism’ comes into effect.

Under such a mechanism, the dues of workmen are settled first before all secured creditors and the Jet Airways pilots union stands a good chance of recovering their dues, especially if they approach the court as pilot workmen.

However, in case Jet does not end up being liquidated, then the new investor who bails out the airline would have to take on Jet’s liabilities.

If the Jet Airways case is admitted to the NCLT, under bankruptcy resolution lenders may recover only a fraction of the Rs 8,400 crore the airline owes them.