GULF Air staff are set to lose one per cent of their monthly salaries, as the company seeks to cut its running costs.
The airline has announced it will no longer pay the amount, which is deducted from all public and private sector workers and goes into a government fund to help jobseekers.
“The one per cent employment allowance is a tax required to be paid for by all employees in the Kingdom of Bahrain, both local and expatriate,” it said in a statement.
“This tax is paid by the employees, however, a number of companies in Bahrain are reimbursing this cost.
“Gulf Air has been absorbing this cost in the past; since then times have changed.
“As the direct result of a series of unprecedented regional and economic factors affecting the airline, we have been forced to implement aggressive cost-saving measures.
“This includes payment of the 1pc employment allowance by our employees as a temporary measure until the airline reaches commercial sustainability.
“We have had overwhelming understanding and support from employees regarding this decision.”
Gulf Air Trade Union (GATU) president Habib Al Nabbool said the company had footed the bill on behalf of staff since the scheme was introduced in 2007 and should continue to do so.
“However, we have communicated to the management that the money should be returned to the workers after the company’s finances improve,” he said.
“For the last five years, the money was being deducted from our salaries but was paid back at the same time.
“We are happy to give out the contribution, but we need a written undertaking from the management that the money will be refunded with retrospective effect once the company has better days.”
Mr Al Nabbool said it was the duty of every employee to support the company in its time of need.
“We know the financial position is not good and we want to help,” he said.
However, the union leader said staff would have the right to approach the Labour Ministry if management refused to sign a written agreement, agreeing to pay back the money once the airline’s financial situation improved.
“We will try and sort it out in other ways but will approach the authorities if that fails,” said Mr Al Nabbool.
His comments came after the GDN obtained a copy of the memo about the one per cent deduction that was sent out to all Gulf Air staff.
“As part of our ongoing efforts to achieve cost-savings throughout the company, we regret to inform you the 1pc unemployment contribution will now be deducted from all our staff salaries,” it said.
“Although this tax was introduced in 2007 as an employee contribution, Gulf Air has always paid the contribution for its employees.
“However, with the critical financial situation and the need to cut costs, this will now be paid by employees, with the first deduction being taken from July’s salary.
“We are intending this measure will be a temporary one and will occur only till our financial situation improves. “We appreciate your co-operation and understanding in these difficult times – we believe together we can help ease the troubled financial situation and put the company on the road to recovery.”