The case is about the retrenchment drama that unfolded in one of India’s leading aviation companies, Jet Airways (India) Limited (Jet), in late 2008. After showing the door to more than 1000 employees in a bid to streamline its operations, Jet was faced with immense criticism and opposition by various organizations and political parties.
Jet’s chairman Naresh Goyal (Goyal) reinstated the employees a day later saying that he was not aware of these sackings. The Indian aviation industry was going through a tough phase and experts felt that it was in the interest of the company to retrench employees to remain competitive. Experts largely felt that Goyal had capitulated under pressure from external parties while others felt that all may not be well with the organizational communication mechanisms at Jet.
We have created high morale for our people. Our employees believe in the company. They believe it’s their company. There’s a feeling among employees that if the company makes money, it’s their money and if the company loses money, that’s their loss." Naresh Goyal, Chairman, Jet Airways (India) Limited, in July 2007.
"While the mishandling of the Jet Airways sacking and reinstatement of 1,900 employees was an HR and PR disaster, the larger implications of what happened are also worth considering. It is not just that the chairman of India’s most successful airline became the butt of jokes, it is also a question of what he knew, when he knew it, and who did the bungling." - Anjuli Bargava, Columnist, Business Standard, October, 2008.
"The sackings were completely illegal. There was no notice nor was government’s permission taken to sack 800 employees. Perhaps they realized their folly and decided to take these employees back. The matter would have landed in the court otherwise." - Anand Pujari, Labour lawyer, SI Joshi & Co., in October 2008
» Analyze the HR problems faced by Jet Airways in 2008.
» Discuss various concepts related to hiring, firing, and compensation management.
» Understand the rationale behind Jet’s decision to lay-off employees and the reason’s behind its later decision to take back the sacked employees.
» Understand the importance of communication in an organization and analyze whether there were any loopholes in Jet’s organizational communication network.
» Understand the rationale behind the pay cuts initiated at the company.
» Understand how environmental variables could affect a company’s HR policies.
In October 2008, Jet Airways (India) Limited (Jet), one of India’s leading domestic airlines, decided to lay off more than 1,000 employees to streamline its operations.5 The retrenchment was the second phase of its trimming operations.
The first phase, which took place a day earlier, saw the airline showing the door to 850 cabin crew members6. The second phase of retrenchment included employees from all operations - cabin crew, pilots, ground staff, airport services staff, and employees from management departments. The sudden decision not only took the employees by surprise but also caused alarm in the Indian aviation sector. Amidst great furor and opposition by various organizations and political parties, Naresh Goyal (Goyal), chairman of Jet, reinstated the employees a day later amidst great emotional drama. He was quoted as saying he had been appalled by the retrenchments of his employees, which he claimed, he had come to know only through media reports.
He added that he would "not be able to live as long as he lives" with the tough decision his management had taken and clarified that he was taking back the employees as they were "family to him and as head of the family he would take care of them. A month later - in November 2008, Jet...