PIA director Hussain Lawai rejects Rs 5 billion pay raise for employees
Islamabad (Daily TheNews / Tuesday, February 26, 2013) – Top director of PIA, who is close to the PPP leaders, has practically expressed no confidence in the present PIA management and has challenged its decision to give a Rs5 billion salary package to the unions and pilots when the airlines was making an annual Rs30 billion loss.
Hussain Lawai, a prominent banker of the country and director of PIA, in a letter to the PIA chairman has raised several objections to the management’s decisions. The Economic Coordination Council (ECC) is expected to consider a huge bailout package for PIA on Tuesday and this letter by Mr Lawai will create a serious problem for the PIA management, PIA officials said.
Many other directors and officials of the airlines are also challenging the package to PIA pilots who have a direct clash and conflict of interest with the top management, as a top executive himself is a pilot and his three sons are all PIA pilots flying different aircraft.
A PIA official confirmed that the three sons are PIA employees and fly 777, Airbus and ATR aircraft. Important parts of the February 16 letter written by Lawai to the chairman, board of directors of the PIA, reads as: “I received the notice for meeting of board of directors from the company secretary scheduled to be held on 18th Feb 2013 to consider and approve certain agenda items including MOU signed by MD of the company approving increase in salaries of employees.
As I have committed to attend board meeting of GSK on the same day and on the same time, I conveyed my regret to the company secretary to attend PIA board meeting of 18th Feb, 2013. From electronic media, I came to know that PIA management has approved an increase of salaries of the employees by 35% per annum in addition to 5% increase granted to them in Dec 12. Such announcement came as a rude shock to me as I was not aware about any negotiations with CBA, PALPA, Officers Associations and other staff bodies.
Even during last board meeting, MD or for that matter not even any management executive referred to the ongoing negotiations with the employees. However, this subject was briefly touched at the time of approving the budget for 2013 and the board agreed to include an amount for increase in the salaries in the budget 2013 in line with the recommendations of management and of course subject to approval of the board.
“I contacted Malik Nazir, chairman HR board committee, to check with him if his HR committee might have recommended the increase in salaries to the employees. To my surprise, he confided with me that he is as ignorant as I am. No HR board committee was convened to consider such matter. However, he did inform me that he spoke to MD about this and he was informed that the agreements for increase in salaries were signed with the unions and associations subject to approval of board of directors.
“In view of what has been stated above, I strongly object to the attitude adopted by the management of PIA by ignoring the board of directors on a vital financial issue which will adversely impact the already precarious financial condition of the company. PIA does not have the funds for purchasing fuel to operate its aircraft, which can generate cash revenues to pay for its fuel, which is the basic raw material of the airline. Moreover, it is incurring loss of around Rs30 billion a year for the last two years.
“In light of the above, I do not support any increase in the salaries of the employees as announced and reported in the electronic and print media and request you to please order an inquiry to determine:
1. Reasons for bypassing HR board committee and the board of directors on such financially critical matter;
2. Signing of the agreement with the union and associations granting unprecedented increase in the salaries of employees and putting uncalled for and unnecessary burden and pressure on the board by inserting the words “subject to board approval” in the agreements without the knowledge of board or its HR committee.
3. Not seeking guidance and direction from either HR board committee or board of directors before commencing negotiations with unions and associations.
4. Names of executives who conducted the negotiations with the unions and associations and who authorised them to accept hefty increase in the salaries and sign the agreements with the clause — subject to approval of the board — giving false impression of board’s assumed blessings for the whole exercise.
5. Verify the media information about 5% increase given to all the employees in December 2012.
“If the management wishes to improve the salary structure or employment conditions of the employees, it should make out the proposal in the light of budgeted salary increase first before HR board committee and then board of directors giving full details of financial impact on monthly salary bills including all allowances, medical facilities, pre and post-retirement benefits, etc., and how it proposes to meet the additional financial burden.
The proposal should also include salary increase granted to the company’s employees during the last 6 years with the inflation rate and salary increase given to government employees.
Copy to all board members”