PIA will begin disbursement of Rs9.6 billion to employees who opted for VSS from next week
The development comes after two employees allegedly expired due to a shortage of funds on non-payment of VSS dues
Last year in December, PIA announced VSS with a two-week deadline to employees for a decision.
KARACHI: Pakistan International Airlines (PIA) will begin disbursement of Rs9.6 billion to employees who opted for Voluntary Separation Scheme (VSS) from next week, The News reported Friday.
According to a PIA spokesperson, Minister for Aviation Ghulam Sarwar presided over a meeting, which decided to commence the payment to VSS-approved applicants from next week in collaboration with PIA, ministry of aviation, and Accountant General of Pakistan (AGP).
The meeting was also attended by PIA CEO Arshad Malik and Secretary Aviation. It was decided that the PIA would operate a special bank account with the National Bank of Pakistan.
Read more: Govt to shell out Rs5 billion to 2,000 PIA employees taking Voluntary Separation Scheme
This account will be controlled by the zonal office of AGP. The funds have been transferred to the said account, the spokesperson said, adding that nearly 2,000 employees availed the VSS that was introduced after the approval of the government last year to restructure the loss-making airline.
The PIA’s spokesperson said the VSS payments were subject to an audit of the Accountant General of Pakistan (AGP) and PIA management showed resentment on this.
Earlier, the PIA employees appealed to the Supreme Court to take action against delay in clearance of VSS funds as the national flag carrier couldn’t meet its commitment to clear dues by January 31.
They said the two VSS applicants died because of financial constraints and uncertainty related to payments of retirement funds. The airline has discontinued the medical facilities of all employees who opted for VSS from December 31.
PIA announced VSS system last year
Last year in December, the PIA announced the VSS with a two-week deadline to employees for a decision as the loss-making state-run airline continued to be a burden on the national exchequer.
Read more: PIA launches Voluntary Separation Scheme for its employees
There were 10,500 regular employees on the payroll. If contractual workers and daily wagers are included the total workforce was somewhere around 13,000.
With over Rs56 billion losses alone in 2019 and that was a continuation of its subpar performance for over a decade, the national flag carrier witnesses attrition of 1,000 employees every year.
The VSS package
The VSS package has been made for employees in two categories: over 18 years of service and below 18 years of service.
The package compensation includes accumulated leaves, gratuity, provident fund, lump-sum medical, and pension up to the age of 65 years.
The previous government decided to privatise PIA and set April 2018 as the last date of its privatisation as its losses swelled to more than Rs400 billion since 2008. Under the law, the management control of the PIA continues to remain in the hands of the federal government and majority shares could not be transferred to any private party.