Voluntary redundancy scheme by Air Malta

Air Malta yesterday launched a voluntary redundancy scheme for its employees.

The scheme follows extensive consultations 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.

The redundancy scheme will run for four months and is open to employees having a minimum of seven years permanent employment with the airline. Eligible employees can choose between two schemes.

Under 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 scheme, whichever is the lower. This calculation will be made on the basic wage applicable on September 15.

Scheme B is applicable to employees who would be 58 and over on September 15. They will be paid the following, according to their length of service:

¤ Minimum seven years but less than 10 years paid employment - a sum equivalent to one year basic wage or the basic wage up to retirement age applicable on the closing date for the receipt of applications for the scheme whichever is the lower.

¤ More than 10 years but under 20 years paid employment - a sum equivalent to 1.5 years basic wage or one's basic wage up to retirement age applicable on the closing date for the receipt of applications for the scheme, whichever is the lower.

¤ Over 20 years paid employment - a sum equivalent to two years basic wage or the basic wage up to retirement age applicable to them on the closing date for the receipt of applications for the scheme, whichever is the lower.

The airline has set up a help desk for employees needing further information on the scheme.

The voluntary redundancy scheme will be the only one the company will be launching and no subsequent schemes will be offered, Air Malta said, adding that the scheme is yet another step in the Rescue Plan agreement signed in May 2004 with all the unions representing its employees and is aimed at returning the airline to profitability.

The company said that soon after the signing of the agreement Air Malta had 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 a works council, and initiated a moratorium on wages for the duration of the agreement, among other initiatives. The airline also started a divestment process of non-core operations to concentrate on the airline business.