IndiGo Rolls Back Pay Cut, will others follow suit

As per information available in public domain, India’s largest airline by market share, IndiGo, communicated their decision to roll back their earlier announced pay cut in employee salaries for the month of April. The airlines imputed their decision to roll back their pay cut to the ‘government’s wishes’. However, since the Executive Committee members and Senior Vice Presidents volunteered to take pay cuts, the communication clarified that the roll back would not be applicable to them.

Earlier the airline had announced that it will cut salaries for all employees, excluding Bands A and B, starting from 1st of April, 2020. Employees of bands C and D were to take five percent cut and employees of band D along with cabin crew were supposed to get a ten percent cute.

The airline, in its email communication addressed to all employees, stated

“In deference to our government’s wishes of not reducing pay during the lockdown, we have decided not to implement the previously announced pay cuts during the month of April”

The airline stated that in the given circumstances, they have little control over their revenues but a lot of control over our costs and therefore, they are focusing all their energy on managing their costs.

Earlier, the Ministry of Labour and Employment had vide an advisory dated 20th March 2020, directed all employers of public/ private establishment not to terminate their employees or reduce their wages.

It is also pertinent to note that majority of Indian airlines have announced measures to cut salaries: GoAir has asked majority of the employees to go on leave without pay; Vistara has instituted a compulsory leave without pay provision for up to 6 days in April for senior employees; AirAsia India cut the salaries of senior employees by up to 20%; Air India has also cut the salaries of employees by 10% and SpiceJet has cut the salaries of mid and senior level employees by 10 to 30%. What remains to be seen is whether the other airlines will also follow suit with IndiGo’s course of action.

What is also conspicuous is the absence of any action by the respective State Governments, who have passed Orders under the Disaster Management Act, 2005 directing private employers to not to reduce salaries or terminate employees, in pursuance of the order of the Central Government dt. 29.03.2020.