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An Extract From A Leading Newspaper On The Issue Of Paycut

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  • An Extract From A Leading Newspaper On The Issue Of Paycut

    Following is an extract of article that appeared in today's ET: "Jet airways has informed its employees that they will have to take a salary cut of up to 25% as cost of operations for airline is increasing on the back of rising crude and falling rupee."
    Please share your views on how justified and legal is this paycut and under such a circumstance, what should be the approach of Jet Airways.

  • #2
    The challenges facing aviation industry are many. High wages to staff, intense competition and increasing oil prices.
    Legally the airlines has asked people to accept pay cut and once accepted, there is no illegality. The staff concerned have to understand that non cooperation may result in the airline becoming bankrupt.
    Indigo is also facing financial pressures. Strengthening Crude oil prices, strong dollar v/s declining rupee is adding to cost while severe competition is denting bottom line.
    Approach of the airline should be to increase revenue so as to overcome present crisis.


    • #3
      Dear Colleague,
      When things come to this pass of asking staff to accept pay cut, it has to be as a last resort after other ways of cost cutting are tried out first. Besides all staff should be taken in confidence and communicated in transparent manner the need to share misery in this difficult patch of company's life.
      Just as staff share prosperity of the company, so they do adversity. But the pay cut must apply to all employees and the CEO should set example by accepting it first .
      You can debate endlessly on legality or otherwise of this pay cut, but when the push comes to shove, such measures unfortunately have to be resorted to.


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