KUALA LUMPUR: With the outgoing Aer Lingus Group plc chief executive officer (CEO) Christoph R Mueller due to start on March 1 as CEO-designate of Malaysia Airlines NewCo, Malaysia Airlines Bhd (MAB), it is understood that plans are afoot to finalise termination letters to employees of the beleaguered Malaysian Airline System Bhd (MAS), said sources.
“The termination letters will be out soon. Everyone will be getting a minimum of one letter (termination); two letters [even] if they are re-employed by the new company,” one source told The Edge Financial Daily.
It could be done at the 11th hour to prevent any operational hiccups for the airline so that the transition to the new company would be smoother, the source added.
Khazanah Nasional Bhd, the largest shareholder of MAS, in August last year unveiled a restructuring plan for the national airline that would see its assets being moved to a new company by July 1 this year. The plan which is underway will see job cuts of 6,000 from the existing workforce of 20,000.
Another source close to the matter said the terms and conditions of the termination of the employees have yet to be finalised, perhaps everything will be much clearer once Mueller takes office.
Although the restructuring efforts have started gaining traction, employees and union representative of MAS are sceptical if the new Corporate Reskilling Centre (CRC) set up to retrain the thousands of MAS employees — who will be laid-off as part of the restructuring plan — will be able to do the job. The CRC is to be chaired by former Malaysia Airports Holdings Bhd managing director Tan Sri Bashir Ahmad Abdul Majid.
“We hope that MAS employees will be given the option to be retrained for positions that will be commensurate with their skills and experience and not be forced to take a big pay cut due to the restructuring efforts,” said another source.
According to the current collective agreement (CA) signed with the MAS management, those who have served 10 years and below should get a minimum of one month salary for every year of service, while those serving 10 years and above should be paid one-and-a-half-month salary for every year of service.
It is learnt that MAS management is due to call for a meeting with the respective unions as early as this week.
However, it has yet to be ascertained if the unions will be engaged to discuss the issues with regard to the termination packages for those affected apart from the progress of the restructuring efforts.
Khazanah is due to give the second update on its progress report on the 12 areas of MAS Recovery Plan by the end of this month. The first progress report was in November last year.
When contacted, Malaysia Airlines System Employees Union (Maseu) secretary-general Abdul Malek Ariff told The Edge Financial Daily that the union had yet to be notified or consulted on the termination benefits for MAS staff.
Maseu has been the body taking care of the interests of the airline’s cabin crew, negotiating the CA with MAS management and by far, the most powerful union in the country as seen when it lobbied to unbundle the share swap between MAS and AirAsia Bhd in 2012.
Abdul Malek cautioned that with the new MAS Act, the livelihood of the crew is at stake as it will take away their hard-earned retirement and termination benefits.
“It (MAS Act) will end the existing CA that was agreed upon between the [various] unions and MAS,” he said.
Under the MAS Act, the new entity MAB will not be responsible for any monies due to employees including termination benefits, Abdul Malek added.
The MAS Act has been criticised by employees and even by the Malaysian Trades Union Congress.
The National Union of Flight Attendants Malaysia had also condemned the proposed MAS Act, after it was swiftly passed in Parliament in November last year.
This article first appeared in The Edge Financial Daily, on February 23, 2015.