‘Employees shall also be entitled to gratuity that fell due up to insolvency commencement date’

‘Employees shall also be entitled to gratuity that fell due up to insolvency commencement date’

Insolvency appellate tribunal NCLAT on Friday directed Jet Airways’ new owner – Jalan-Kalrock consortium – to pay the provident fund and gratuity dues of employees of the carrier, which plans to restart its operations.

It has directed the former resolution professional to “compute the payments to be made to workmen and employees within one month from today” and communicate the same to the Jalan-Kalrock consortium to take steps for payment.

Allowing a batch of petitions filed by the associations of workmen, Aircraft Maintenance Engineers, Officers and Staff Association and others, a two-member NCLAT bench had asked the new owner to make payment of provident fund dues as admitted by the resolution professional.

“Successful Resolution Applicant is directed to make payment of unpaid provident fund to the workmen till the date of insolvency commencement, after deducting the amount already paid towards the provident fund in the Resolution Plan to the workmen,” the NCLAT said.

The tribunal also clarified that the workmen are also entitled to payment of their gratuity dues as on the insolvency commencement date, after adjusting any amount towards gratuity paid under the resolution plan.

“Employees shall also be entitled to the gratuity, which fell due up to insolvency commencement date,” said the National Company Law Appellate Tribunal (NCLAT).

However, it said, the entitlement of those employees and workmen who were demerged into AGSL (Airways subsidiary Airjet Ground Services Ltd), a subsidiary of Jet Airways shall not be there, since the demerger had not been treated as a termination of their services.

“The employees are also entitled to the payment of their full provident fund, unpaid up to the date of the insolvency commencement date,” according to the 143-page-long NCLAT order.

The tribunal also said, “It is made clear that full payment of provident fund would be of that unpaid part of provident fund, which has not been deposited by the Corporate Debtor in the EPFO”.

However, the appellate tribunal denied other prayers by the workmen and employees of Jet Airways.

The NCLAT order came over the petition challenging the orders of the Mumbai bench of the National Company Law Tribunal, which had on June 22, 2021, approved the bids of the Jalan-Kalrock consortium.

Five appeals have been filed by workmen and employees of Jet Airways (India) and three by operational creditors.

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By Dipak

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