NCLAT Affirms Jet Airways' Obligation to Settle Employee Dues

The NCLAT has reaffirmed that Jet Airways is required to pay its employees' provident fund and gratuity dues in full. This decision comes after rejecting appeals from SBI and other creditors who argued for the inclusion of these dues in the liquidation estate. The ruling emphasizes the importance of protecting employee rights under the Insolvency and Bankruptcy Code, ensuring that workers maintain their priority status for payments. The effective date for calculating these dues has been set as May 20, 2020, safeguarding employee interests amidst the ongoing financial turmoil of the airline.

By Narendra Chaudhary Jul 1, 2026, 18:08 IST

NCLAT Ruling on Jet Airways Employee Payments

The National Company Law Appellate Tribunal (NCLAT) has confirmed a previous ruling mandating Jet Airways to fully settle its employees' provident fund (PF) and gratuity payments. Additionally, the tribunal has rejected appeals from the State Bank of India (SBI) along with seven other financial creditors. During the proceedings, the lenders argued that the dues related to provident fund, gratuity, and pension should be included in the liquidation estate and shared among all creditors as per the Insolvency and Bankruptcy Code (IBC). They claimed that such payments could only be excluded if specific provident fund and gratuity accounts were established at the start of the liquidation process. The banks also requested that the time spent in legal disputes be counted when determining the 24-month period for workmen's dues. If this request had been granted, employees would have lost their priority status for payments under the IBC. The NCLAT upheld a ruling from February 4 by the National Company Law Tribunal (NCLT), which stated that May 20, 2020, should be recognized as the effective date for calculating the 24 months of workmen's dues that are entitled to priority under the IBC.