PIA Voluntary Separation Scheme (VSS) for Airline's Employees

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Abbas Ali
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PIA Voluntary Separation Scheme (VSS) for Airline's Employees

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Pakistan International Airlines (PIA) has sought cash support from the federal government to pay lenders, for Voluntary Separation Scheme (VSS), sources close to Aviation Minister told Business Recorder. Giving the background, the sources said that Strategic Business Plan of PIACL was submitted to the Prime Minister on April 4, 2019. The Prime Minister approved in principle the liquidity requirements for mark up and Voluntary Separation Scheme for PIACL as presented by PIACL and directed the Finance Division for further necessary action,

In a meeting held on December 30, 2017 under the chairmanship of the former Prime Minister, it was decided that mark up on the debt of PIACL would be picked up by GoP for five years and its payment would be made directly to the lenders. In pursuance of the decision of December 30, 2017 an amount of Rs 18 billion was allocated during the Financial Year 2018-19 paid directly to the lenders by the Finance Division.

PIACL has requested for GoP cash support for the following purposes: (i) owing to volatility in Monetary Policy rate and dollar rupee parity, the amount has increased from Rs 18 billion to Rs 19.628 billion. The difference of Rs 1.628 billion is required to pay mark up during FY 2018-19; (ii) budget estimates of Rs 24.524 billion for FY 2019-20 were also shared with Ministry of Finance, on the basis of these assumptions (Kibor 10.69 per cent and dollar to rupee 140). The demand for the year 2019-20 of Rs 24.524 billion has now been revised upward to Rs 30.071 billion due to recent drastic change in monetary policy and dollar to rupee parity; and (iii) GoP cash support of Rs 9.779 billion is required to meet expenditure on account of VSS. After this provision, the process of VSS can start which will result in saving of Rs 5.057 billion per annum.

Source: brecorder.com
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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

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Till end of Hajj operations: Voluntary Separation Scheme deferred in PIA by Cabinet

MUSHTAQ GHUMMAN

JUL 28TH, 2019

ISLAMABAD
The Economic Coordination Committee (ECC) of the Cabinet has deferred Voluntary Separation Scheme (VSS) in Pakistan International Airlines (PIA) till the completion of Hajj operations as any such decision can jeopardize current operations, sources close to Minister for Aviation told Business Recorder.

During discussion in the ECC on July 17, 2019, it was pointed out that Hajj operations 2019 had started and at this juncture implementation of VSS may jeopardize the operation due to retirement of PIA employees, who are involved in operation; therefore the forum deferred its decision in VSS till completion of Hajj operations 2019.

Source: brecorder.com
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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

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PIA to seek ten billion rupees financial assistance from the Government of Pakistan for Voluntary Separation Scheme (VSS) for airline's employees.

The scheme will help PIA in saving five billion rupees per year.

https://e.dunya.com.pk/detail.php?date= ... 4_79867758

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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

Post by Amaad Lone »

Very bad idea. Last time the government had a golden handshake scheme and a lot of useful employees left the airline leaving the airline with employees no one else would hire. VSS would only make competent employees go else where and PIA would once again be left with losers.

The airline should make a list of employees who are not needed and only offer them this scheme.
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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

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PIA decides to retire 3,500 employees thru VSS

June 21, 2020

ISLAMABAD:
Following in the footsteps of Pakistan Steel Mills (PSM), Pakistan International Airlines (PIA) has reportedly also decided to retrench 3500 employees, through Voluntary Separation Scheme (VSS), sources close to Minister for Aviation told Business Recorder.

The employees’ retrenchment plan, sources said, will be submitted to the Economic Coordination Committee(ECC) of the Cabinet. Briefing the ECC on PIACL, the Aviation Division referred to a meeting held on December 30, 2017 under the chairmanship of the then Prime Minister, wherein it was decided that the mark-up on the debt of PIACL would be picked up by GoP for five years and its payment would be made directly to the lenders. In pursuance of that decision GoP (Finance Division) had kept an allocation of Rs 24.5 billion in the budget of financial year 2019-20 for payment on mark-up on GoP guaranteed loans on the basis of assumption of Karachi Interbank Offered Rate (Kibor) 10.69 percent. Subsequently, the actual demand was enhanced due to the big changes in Kibor.

According to sources, Aviation Division has also said that a summary for the ECC of the Cabinet was initiated regarding GoP support required by PIACL for mark-up and VSS on July 9, 2019 which was considered on July 17, 2019. However, the ECC deferred its decision with the direction that proposal may be re-submitted to it after completion of Hajj operations, 2019.

The Aviation Division also said that PIA planned to offer VSS to 3500 employees, which will cost approximately Rs 9.7 billion. The detailed outline, procedure and cadres to be offered VSS are being formulated in consultation with an expert legal counsel on the subject which is likely to be completed by June 30, 2020. The plan would be presented to the ECC of the Cabinet for consideration accordingly.

The sources said Prime Minister Advisor on Institutional Reforms and Austerity, Dr Ishrat Husain is also working on reforms in PIA, Railways and Federal Board of Revenue (FBR).

Last month, PIA announced its financial results for the year 2019 and recorded an increase of Rs 43 per cent in its annual revenue. The national air carrier’s revenue surged to Rs 147.5 billion for the year 2019 as compared to Rs 103.5 billion in 2018.—MUSHTAQ GHUMMAN

Source: brecorder.com
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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

Post by Abbas Ali »

According to news sources:

Under a plan to reform/restructure PIA, reduction of airline's workforce by fifty percent through golden handshake/Voluntary Separation Scheme (VSS) is being considered.

Further reduction in the number of airline's employees due to reduced flight operations caused by COVID-19 also under consideration.

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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

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According to news sources, PIA Strategic Business Plan will be submitted to Economic Coordination Committee (ECC) next month.

Reduction through Voluntary Separation Scheme (VSS) in number of PIA employees according to international standards is expected.

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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

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A Human Resource Rationalisation Plan will also be brought before the Economic Coordination Committee (ECC) for approval within the current month before offering voluntary separation scheme (VSS) to PIA employees.

Source: https://www.dawn.com/news/1572690/pia-e ... ion-scheme
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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

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On August 13, Senate Standing Committee on Aviation meeting agenda includes:

Reasons and briefing on Voluntary Separation Scheme (VSS) of PIA employees.

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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

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Today Senate Standing Committee on Aviation was informed that 3,500 PIA employees can benefit from airline's Voluntary Separation Scheme (VSS).

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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

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According to news sources:

12.87 billion rupees will be spent on Voluntary Separation Scheme (VSS) for 3,200 PIA employees. It will reduce 4.2 billion rupees in salary paid to employees per year by the airline.

Currently, PIA has 14,500 employees. The airline has accumulated loss of 450 billion rupees with 100 billion rupees liabilities.

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Re: PIA Seeks Government Cash Support for Voluntary Separation Scheme (VSS)

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PIA Voluntary Separation Scheme (VSS) for Airline's Employees

Eligibility


i) All regular PIACL employees under the age of 60 on announcement of VSS program.

ii) Employees on leave without pay.

iii) Employees on foreign posting (their last withdrawn salary from Pakistan will be considered for calculation of the VSS package).

Ineligibility

i) Employees who have already submitted resignation.

ii) Employees who have already opted for early retirement.

iii) Employees under any litigation against PIACL, until they undertake and withdraw the litigation.

iv) Employees under disciplinary action on or before announcement of VSS or date of release, whichever is earlier, are not eligible for applying under this scheme. In their cases, every attempt would be made to conclude disciplinary action at the earliest and for this purpose a separate cell has been set up. Decision regarding acceptance or otherwise of their option under VSS shall be made after conclusion of disciplinary action and decision thereon.

Benefits

VSS Compensation

More than 18 years service

One basic salary for served years OR 0.5 basic salary for remaining service in months, whichever is less.

Less than 18 years service
Two basic salaries for served years OR one basic salary for remaining service in months, whichever is less.

Medical

More than 18 years service

Present value of PKR 4,200/- for each remaining month for period till attainment of age 65 years.

Less than 18 years service
Pre-determined value of PKR 4,000/- for less than 18 years' service for each month up to maximum of 120 months.

Pension

More than 18 years service

Pension (present value) of pension payments up to 65 years of age.

Less than 18 years service
Pension (present value) for employees having more than 10 years of service from 60 up to 65 years of age.

Gratuity

More than 18 years service

As per rules.

Less than 18 years service
As per rules.

Commutation

More than 18 years service

As per rules.

Less than 18 years service
Not available.

Leave Encashment

More than 18 years service

Gross x privilege leave balance x 12/365

Less than 18 years service
Gross x privilege leave balance x 12/365

Provident Fund

More than 18 years service

Self + PIA contribution + profit (entire balance)

Less than 18 years service
Self + PIA contribution + profit (entire balance)

Special Allowance (only for aircraft engineers)

More than 18 years service

Special allowance shall be for the purpose of this clause, deemed part of basic salary.

Less than 18 years service
Special allowance shall be for the purpose of this clause, deemed part of basic salary.

Flying Allowance (only for pilots)

More than 18 years service

Guaranteed flying allowance @50% to be considered as part of basic salary.

Less than 18 years service
Guaranteed flying allowance @70% to be considered as part of basic salary.

Passage facility

More than 18 years service

Post VSS no passage facility.

Less than 18 years service
Post VSS no passage facility.

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Re: PIA Voluntary Separation Scheme (VSS) for Airline's Employees

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Introduction of Voluntary Separation Scheme (VSS) for PIA employees now expected in the month of November, according to news sources.

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Re: PIA Voluntary Separation Scheme (VSS) for Airline's Employees

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Economic Coordination Committee (ECC) meeting on November 11 to receive briefing on PIA Voluntary Separation Scheme (VSS) for airline's employees.

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Re: PIA Voluntary Separation Scheme (VSS) for Airline's Employees

Post by Abbas Ali »

On November 11, CEO PIA Air Marshal (retired) Arshad Malik announced introduction of Voluntary Separation Scheme (VSS) for airline's employees.

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