PIA starts clearing VSS dues after months’ delay

KARACHI: Pakistan International Airlines (PIA) on Wednesday started disbursement of payments related to voluntary separation scheme (VSS) after more than three months since the VSS launch.

The release of full amount payable to individuals under the PIA VSS commenced and cheques were distributed to more than 100 applicants at the head office, the airline’s spokesperson said.

PIA Chief Financial Officer Khalil Ullah Sheikh, General Manager Accounting Zahid Karim, General Manager Funds Management Asif Zia and General Manager Industrial Relations Shoaib Dhari distributed cheques among five percent of VSS applicants. Nearly 2,000 individuals agreed to the VSS launched in December.

The finance ministry had transferred Rs9.6 billion to the ministry of aviation for clearance of VSS payments. The delay was attributed to auditing of VSS dues by Auditor General of Pakistan. Without giving a specific timeline, Sheikh said the payment to VSS-approved applicants will continue and is expected to be completed “in shortest possible time”. The long delay has already led to premature death of two VSS-approved applicants. Employees of PIA earlier appealed to the Supreme Court to take action against delay in clearance of VSS funds as the PIA 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. PIA discontinued the medical facilities of all employees who opted for VSS from December 31. PIA announced VSS with a two-week deadline to employees for a decision as lose-making state-run airline continued to be a drain on public funds for over a decade. The airline incurred over Rs56 billion losses alone in 2019.

There were 10,500 regular employees on the payroll. If contractual workers and daily wagers were included the total workforce was somewhere around 13,000. The airline sees exit of 1,000 employees every year. 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.