ECC approves laying off one-third PIA employees

ECC approves laying off one-third PIA employees


The Economic Coordination Committee (ECC) has approved, in principle, a voluntary separation scheme (VSS) to lay off a maximum of 7,500 Pakistan International Airlines (PIA) employees to keep the airline afloat.

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Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Sheikh chaired the meeting at the Cabinet Division on Monday. Minister for Industries and Production Hammad Azhar, SAPM on Revenue Dr. Waqar Masood, SAPM on Petroleum Nadeem Babar and Adviser to the PM for Institutional Reforms and Austerity Dr. Ishrat Hussain attended the meeting. Governor State Bank of Pakistan Dr. Reza Baqir also participated through video links.

The ECC Meeting

The ECC approved Rs12.87 billion as the cost of VSS to be paid in two-and-a-half years.

“After thorough discussion, it was decided to approve, in principle, the voluntary separation from service scheme for PIA,” the Ministry of Finance announced after the meeting of the ECC.

After finalizing a self-retirement scheme for its staff, Pakistan International Airlines Corporation Limited (PIA) and the Aviation Division had forwarded it to ECC for approval.

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PIA had sought allocation of Rs. 12.871 billion to award golden handshake to at least 3,500 employees and at most 7,500 employees through the VSS.

The laying off of 3,500 employees would result in an annual saving of Rs4.2 billion and the government will recover the Rs12.9 billion VSS cost within two-and-a-half years, the Aviation Division stated.

After thorough deliberation, the committee approved the summary in principle but did not ratify the amount. The committee has instructed the Aviation Division to make an offer to PIA staff to determine how many of them are willing to avail of the offer. The allocation will be made accordingly.

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Other Decisions

The ECC also approved four separate Technical Supplementary Grants (TSGs) for the Ministry of Defence and Interior Ministry for various projects.

As per sources, the ECC approved Rs. 26.9 billion for the second phase of fencing along the Pakistan-Iran border on the Defense Ministry’s request.

The PTI government has already approved a plan to lay off 9,350 employees of the Pakistan Steel Mills.

The decision to offer VSS to about 3,861 regular and contractual employees and restrict the PIA’s own workforce to around 7,500 employees to manage 30 aircraft. All suggest that Prime Minister Imran Khan does not have a plan to expand the PIA operations.

In addition to 3,861 positions that have been declared surplus there are another 644 positions. Outsourcing is the most viable option to fill these positions, but this will not require under the operational plan.

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