Former Bahrain Air employees, who were laid off when the airline went into liquidation, received the first instalments of their severance packages yesterday. The remaining 60 per cent is due to be paid once the company sells off its assets.

The Bahrain Air Trade Union had been holding out for full payment of end-of-term packages, but said it reluctantly agreed to the deal because ex-employees were facing massive difficulties and needed cash urgently, reported the Gulf Daily News, our sister publication.

"We had no other option but to sign," said union chairman Abdull Raoof.

"I had a meeting with the employees and almost all of them - mostly the expatriates - said that they needed the money. They (Bahrain Air shareholders) used our plight against us and prolonged payment until we had no other option," he added.

"Personally, I didn't want to do it (accept severance packages in instalments), but the majority said that they would rather have something in their hand instead of nothing," said Raoof.

Former staff of the carrier, which went into voluntary liquidation on February 12 after running up debts of more than BD17 million ($44.8 million), have since had their private bank accounts frozen and credit cards suspended until they pay off outstanding debts.

This has left those affected unable to access cash, despite having to pay rent and other outgoings.

A deal paving the way for the part-payment of settlements was signed by Raoof on behalf of the union, Mahmood Mourad representing the liquidator Mourad Consultancy and Labour Ministry Under-Secretary Sabah Al Dossary.

However, Raoof said former employees would have to visit their banks to access the funds - adding that he feared banks would retain a significant portion to offset outstanding loans and credit card bills.

The GDN had reported last Thursday that 34 former Bahrain Air staff had taken legal action against the airline, demanding compensation for losing their jobs.

A case was lodged in the High Civil Court by a group including pilots, cabin crew, administrative employees, sales staff and management.

It has since emerged that another 31 ex-employees were planning to file a similar case.

Raoof said those with cases pending would not get the 40 per cent initial payment until they dropped their legal claim.

However, he added that Batu only agreed to the deal after ensuring there was no clause preventing employees taking legal action, if payment of the remaining 60 per cent was delayed.

"Now I have to push them to sell off their assets as fast as possible so that we can get the remaining 60 per cent," he added.

"They have some spare parts and some outstanding debts owed to them," said Raoof.

"I am not sure what else they have to sell as the planes were leased. "We expect it won't take too long for that to come in and that anything sold will be going to the employees," he added.-TradeArabia News Service