» Business » Employees reject Kingfisher offer; Shares fall 4.6%

Employees reject Kingfisher offer; Shares fall 4.6%

Source: PTI
Last updated on: October 23, 2012 17:49 IST
Get Rediff News in your Inbox:

KingfisherThere was no sign of an end to the 24-day-old impasse in Kingfisher Airlines with the striking employees on Tuesday rejecting a fresh offer of staggered payment of three months' salary dues and insisting on lumpsum amount.

"The management has been shooting such letters regularly, but they have failed to honour their commitments.

"We reject this offer and demand a lumpsum payment of a minimum of three months' salary, if not of four months," a protesting senior engineer told PTI in New Delhi.

After two rounds of talks in Mumbai on Monday, Kingfisher CEO Sanjay Aggarwal sent a letter to the staff on Tuesday saying the March 2012 salary will be paid on or before October 25.

"We have urged them to accept our offer and should they agree, they will receive the April 2012 salary on or before October 31 and the May 2012 salary before Diwali.

"In essence, the Company will pay three months of salary before Diwali to these employees," he said in the letter.

Not convinced by the mail which reiterated the offer made on Tuesday, the employees, who held meetings in Delhi, Bangalore, Chennai and Mumbai, rejected the offer.

The agitators alleged that the management, by posting such mails to individual employees, was 'trying to break our unity'.

Aggarwal held out the assurance that the remaining backlog of salaries from June to September 'will be paid once the company has been recapitalised upon equity infusion.'

Commencing December, salaries would be paid in 30-day arrears on a monthly basis.

That is, the airline would pay the October salary in December, the November salary in January and so

on, the CEO said.

"It is essential that we resume operations at the earliest post approval from the regulatory body," he said.

The employees, who have not been paid for the last seven months, have been on strike since September 29, which led the airline to declare a lockout that has now been extended indefinitely till normalcy is restored.

In the meantime, shares of Kingfisher Airlines tumbled by 4.6 per cent on the bourses in the morning trade after the employees rejected the airline's offer of payment of three months' salary.

The scrip of the debt-laden carrier fell by 4.59 to hit the lower circuit limit of Rs 10.40 in the opening trade on the Bombay Stock Exchange.

Similar movement was seen on the National Stock Exchange, where stock dropped by 4.61 per cent to touch its lowest permissible limit for the day of Rs 10.35.

Kingfisher on Monday offered its striking employees staggered payment of three months' salary dues before Diwali in mid-November in a bid to get them back to work but a section of employees rejected the offer prolonging the 23-day impasse.

Under the deal offered by the management, the salary dues of one month would be paid in 24 hours, another month's installment in seven days and the third installment before Diwali on November 13, sources had said, adding that efforts would be made to clear fourth installment by December.

The operations of Kingfisher remain disrupted since September 30, first due to a strike by its engineers and pilots, then the lockout declared by the management which was followed by suspension of its flying permit by Directorate General of Civil Aviation on Saturday.

Shares have dived more than 30 per cent since Kingfisher has been grounded.

Get Rediff News in your Inbox:
Source: PTI© Copyright 2020 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.

Moneywiz Live!