Air Malta yesterday introduced a Voluntary Redundancy Scheme (VRS) for its employees. The launch of the scheme, reported in The Malta Independent yesterday, followed extensive consultation and negotiations with the four unions representing Air Malta’s employees; the Airline Pilots’ Association (Malta), the Association of Airline Engineers, the General Workers’ Union and the Union of Cabin Crew.
VRS will remain open for four months and is open for employees having a minimum of seven years permanent employment with the airline, an airline statement said yesterday. Eligible employees can choose between two schemes:
Scheme A - Employees will be paid the equivalent of one month basic wage per year of paid employment up to a maximum of Lm25,000 or 65 per cent of their remaining basic wage up to the retirement age applicable to them at the closing date for the receipt of applications for the VRS, whichever is the lower. This calculation will be made on the basic wage applicable on 15 September.
Scheme B - Employees who would be 58 years of age and over on 15 September and with the length of service as shown hereunder will be paid the following:
Minimum seven years but less than 10 years paid employment – a sum equivalent to one year basic wage or their basic wage up to the retirement age applicable to them on the closing date for the receipt of applications for the VRS whichever is the lower.
More than 10 years but less than 20 years paid employment – a sum equivalent to 1.5 years basic wage or their basic wage up to the retirement age applicable to them on the closing date for the receipt of applications for the VRS, whichever is the lower.
Over 20 years paid employment – a sum equivalent to two years basic wage or their basic wage up to the retirement age applicable to them on the closing date for the receipt of applications for the VRS, whichever is the lower.
The airline has set up a help desk for employees needing further information on the scheme.
This scheme will be the only one that the company will be launching and no subsequent schemes will be offered.
This scheme is yet another step in the Rescue Plan agreement. The agreement was signed in May 2004 with all the Unions representing all Air Malta’s employees and is aimed at returning the airline to profitability. The scheme continues to show the mutual intention and willingness of all the Parties to cooperate in order to solve the difficult financial position of Air Malta and to provide the basis for the airline to continue playing a major role in the Maltese economy.
The three-year agreement has paved the way for a restructuring exercise without the airline engaging itself in forced redundancies.
Soon after the signing of this agreement Air Malta started a restructuring exercise both in terms of its organisation and its operations aimed primarily to tackle restrictive work practices, commenced a far reaching cost-cutting exercise, set up of a Works Council, and initiated a moratorium on wages for the duration of the agreement amongst other initiatives.
The airline also started a divestment process of non-core operations to concentrate on the airline business.