Training Bond Story of Jet Airways and Jan Peter

CASE STUDY

Training Bond Story of Jet Airways and Jan Peter

1. Is Jan Peter’s resignation from Jet Airways a “breach of contract”? Justify with reasons.

No, Jan Peter’s resignation from Jet Airways is not a “breach of contract”. Under clause 9A of Industrial Disputes Act, 1947 it is stated that no employer, who proposes to effect any change in the conditions of service applicable to any workmen shall effect such a change without giving to the workmen likely to be affected by such a change, a notice in the prescribed manner of the nature of change proposed to be effected.

• Jet Airways decided to reduce the Flight Duty Allowance (FDA) from Rs 1500 to Rs500 per day which made Jan Peter incur the grave loss of Rs 2, 20,000.Although it revised the amount to the previous level, this incident had dented the psychological contract of Jan Peter with his employer creating trust issues.
• Jan Peter’s promotional opportunities got affected when Jet Airways brought a change in the seniority rule without giving any notice of change as required under clause 9A of Industrial Disputes Act.

This was a violation of rule by Jet Airways and is enforceable in court of law. Hence, Jan Peter’s resignation from Jet Airways is not a “breach of contract” but rather a consequence of violation of Industrial Disputes Act by Jet Airways. This should be treated by the court of law with utmost attention so that no employer changes the terms and condition of the employment contract and the employees feel alienated just because they have signed an employment bond of 7 years with the organization.

2. Should Jan Peter be allowed to fly 737 300/400/500 series aircrafts at competitor airlines such as Sahara Airlines? Give your recommendation.

In the employment contract of Jan Peter it was stated that if he were to resign from the services of Jet Airways, he would repay the entire cost of training which was estimated to be Rs 15 lakhs approximately. Over and above this amount, Jan Peter would also have to agree to serve Jet Airways for a period of 7 years from date of completion of training and execute an indemnity bond worth Rs.7.5 lakhs. Furthermore, the employment contract insisted that he would not accept any employment which is similar in nature, during the course of 7 years period. Taking the employment contract into consideration he should not be allowed to fly 737 300/400/500 series aircrafts at competitor airlines such as Sahara Airlines.

However, such a decision would put his career at stake. Moreover, it is a cause and effect situation. The cause being violation of Industrial Disputes Act by Jet Airways and the effect being Jan Peter’s resignation from Jet Airways. He was first employed with the Indian Navy, then with Span Air to fly Super King Air B 200 type aircrafts and finally trained by Jet Airways to fly 737 300/400 series aircrafts. Not allowing him to fly 737 300/400/500 series aircrafts would render him unable to extract the right amount of remuneration in the labour market for his existing skills for a long time. Hence, Jan Peter should be allowed to fly 737 300/400/500 series aircrafts at competitor airlines such as Sahara Airlines.