Tuesday, August 24, 2021

Air India divestment: Staff colonies to be vacated in 6 months; govt to make good any shortfall in PF of employees

New Delhi:Preparing for the impending privatisation of Air India (AI), the government has asked the airline management to ensure employees vacate company accommodation in AI residential colonies within six months of the Maharaja getting a new owner.

The management has also been directed to seek the nod from at least half the employee-members of the two provident fund (PF) trusts so that the investments from them can be liquidated and transferred to Employees Provident Fund Organisation (EPFO) before divestment.

The Union home minister Amit Shah-headed GoM on AI divestment has decided the government will make good any shortfall in liquidation values of investment of existing PF trusts, if needed through budgetary support.

The government expects privatisation of AI to be completed by the end of this fiscal, with the Tata Group widely seen as the frontrunner to get the airline founded by the venerable J R D Tata back.

The aviation ministry has sent a series of communication to AI chairman Rajiv Bansal on various issues. Among them are:

Modalities of vacating and handing over AI colonies post disinvestment: The group of minister for AI divestment has decided that “AI employees may continue to stay at residential colonies of the company post divestment for a period of six months or till the property is monetised, whichever is earlier. Appropriate binding legal and other arrangements including financial disincentives should be formulated to enable prompt vacation of properties by employees.”

The ministries told AI that employees will not be eligible for HRA or lease rent allowance till they occupy this accommodation and the government/AI will not be obliged for the major upkeep and renovation of these colonies.

AI management has been asked to prepare and submit a binding mechanism for vacating these homes by employees promptly post divestment.

Transfer of provident fund (PF) of AI from Provident Act 1925 to EPFO under EPF Act 1952: Communicating the GoM’s decision on this issue, the ministry has informed AI that, “Voluntary transfer of PF, presently operated through two separate trusts, to EPFO before divestment for PF benefits of employees. Investments in existing PF trusts will have to be liquidated prior to transfer to EPFO and it would be ensured that the best possible realisable value investments (is) achieved. It was also decided that in case of shortfall in liquidation values of investment of existing PF trusts, it would be made good by AI/government of India, if need be through budgetary support.”

The ministry has asked AI to prepare for the modalities of transfer of PF funds, including getting the consent of over 50% employees of each trust.

AI has been asked to complete the process at the earliest. AI also has been told to give the reason for any shortfall in liquidation values of investments in the two trusts on priority.

24/08/21 Saurabh Sinha/Times of India

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