Ethics in Functional Areas of Business-HRM- A Case study from Jet Airways Ltd

 

Jet Airways said on Wednesday Oct 15, 2008  it would lay off 1,100 staff in the next few days, on top of the 800 flight attendants already retrenched, as part of efforts to cope with slowing demand, high fuel prices and the global creditcrunch.

The airlines are asking for the government to bail them out, but the government, already facing a fiscal squeeze, has so far done nothing to help.

Nevertheless, Petroleum Minister Murli Deora said it was the wrong time for Jet to be laying off employees, while Labour and Employment Minister Oscar Fernandes asked for a urgent report

Jet and Kingfisher, along with their acquired airlines, have a combined strength of 19,000 employees, a fleet of 189 aircraft serving 1,009 daily flights, of which 82 are on international routes. Jet Airways and Kingfisher Airlines, both of which account for 60 per cent market share in India had announced an alliance on Monday night (Oct 13, 2008) to share their resources and routes.



According to industry sources, this was the third time in recent months that Jet had cut its workforce. Some 1,200 employees were given the pink slip after the carrier acquired Air Sahara last year(2007) followed by a separation pact with another 700 a couple of months ago.
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A day after it had already laid off around 800 of its cabin crew members. Simultaneously announced second phase of lay-off of 1100 employees, mainly from departments like flight attendant, cockpit crew etc.

November 2008, Jet decided on a 20% cut in the salaries of its pilots, engineers, and some other staffs.

In his book, “A New Brand World“, Scott Bedbury, talks about the value of brand alignment inside a company.”Though it is important to demonstrate consistently to the outside world that you know what your brand is about, ultimately, it is even more important to first demonstrate this internally…” Jet Airways has ambitions of being the “Singapore Airlines of India”. They have made good progress in that direction too.

 

In the turmoil that followed, employees were FIRED with no PRIOR NOTICE; the entire force of unconfirmed staff was being laid off on a 30-day compensation package. Company took action only against lower staffs. The very existence of any company is because of its employees. Company vows that it keeps on focusing on customer satisfaction when its own people are so highly dissatisfied. Employees are more than just-a-resource.

 

 

•      Where would those 1900 employees go?

•      Why took action only against lower grade staffs?

•      Why Senior Management was very less affected?

•      What would be the future of those students currently taking courses in cabin crew etc?

These and other unanswered questions arose in the public mind.

Certain media sources claimed that private airlines, including Jet and Kingfisher, had already struck a deal with the government to get a Rs 4,700-core (Rs 47 billion) bailout package to help them stay afloat.

 Amidst great furor and opposition by various organizations and political parties, Naresh Goyal , Chairman of Jet, reinstated the employees a day later the great emotional drama.

 

Based on the above narrative, students are advised to answer the following questions?

1.      What are the common ethical issues that are to be resolved by HRM in an organization

2.      What are the specific ethical issues you have spotted in the given incident at Jet airways

3.      According to you, what prompted the promoter to take u turn in the lay off event, other than the tears of staff?

4.      Business pass through ups and downs. HRM function has to keep to basics and take forward the management strategy. In your opinion, state, whether Jet Airways was justified in their action of laying off 1900 staff, on the basis of the market system. Give reasons for your view.

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