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Unions slam proposal to terminate entire SAA workforce

18 April 2020 - 18:29 By Nick Wilson
This latest development comes just days after the government said it was unable to provide further funding to the state-owned airline.
This latest development comes just days after the government said it was unable to provide further funding to the state-owned airline. 

* This story has been updated

One of the biggest unions at SAA has slammed a proposal to terminate the entire workforce of the crippled national carrier, saying a document from the business rescue practitioners  outlining this process is “illegal”.

Feroze Kader, chief negotiator and PR for the South African Cabin Crew Association (SACCA), which together with the National Union of Metal Workers of South Africa, represent about 60 percent of the 4,700 employees at SAA, said on Saturday Sacca “believes it is an illegal document” pointing out that in the document the names of all the various unions including SACCA are listed even though they hadn’t been consulted.

The leaked unsigned document seen by the Business Times lists the names of all the unions at SAA. This latest development comes just days after the government said it was unable to provide further funding to the state-owned airline. 

“We only received this document late on Friday afternoon (April 17 2020) . SAA’s business rescue practitioners requested a virtual meeting this morning. However, we couldn’t meet because we only received the documents late yesterday and we needed to consult with our legal teams and couldn’t continue under the auspice of Section 189 because we have already said we can’t continue with this process during lockdown,” said Kader.

“Our attorneys will respond to the company by the close of business on Monday. “

Kader said SACCA had distanced itself from the retrenchment process underway at SAA during the lockdown because “we believe it’s too difficult to continue negotiations via (Microsoft) Teams or via Skype”.

“We can’t negotiate all aspects of information given to us by the company because we can’t verify the information with our subject matter experts. We asked SAA and the CCMA on our first official sitting around 24 March under Section 189A that we reserve our rights and that this process should not continue during lockdown. “

Kader added the CCMA and SAA  said the majority of parties in the process had agreed to continue but without SACCA and Numsa.

“We are not saying that we don’t want to be part of Section 189 process. The first requirement is to produce a plan, and secondly if plan is produced then we want to continue with process but under normal circumstances not during lockdown.”

Contacted for reaction to the leaked document, Numsa spokesperson Phakamile Hlubi-Majola declined to comment.

According to the document, which has been leaked to the media, non-unionised staff who wish to participate in this process have to “individually confirm in writing that they are bound by this agreement by no later than 24 April 2020”. In terms of the proposal, retrenchment packages would be conditional on the airline disposing of various assets over a six to 24 month period.

It states that if assets are sold for a value that can cover severance packages, the company “will make payment of the severance packages to employees on a monthly basis over a period of six months, once the sale of assets have been concluded”.

 Kader said  Sacca “ believes the business rescue practitioners  have been dishonest”.

“They have been saying there is a plan to rescue SAA but according to this document there was no plan in place.”

“When a company is under business rescue the business rescue practitioners, before they initiate a Section 189 must produce a plan. Up to date there has been no plan produced and the business rescue practitioners are working backwards. They are producing structural changes  like reducing the number of employees but without a plan.”

Kader says what is also concerning is that if SAA is liquidated and assets are sold even before retrenchment packages are paid “everyone is going to want to have a share of the sale of the assets”.

He said the airline had entered into other agreements with staff that had not been “fulfilled yet” but was promising “one week for every year worked severance pay”.

“It’s a false promise.”

The business rescue practitioners were unavailable for comment.

The Department of Public Enterprises meanwhile, said in a statement on Saturday evening that it had “noted media reports” that suggested SAA was about to make “full-scale retrenchments” and that it wished to place it on record that “no such agreements have been concluded”

“The airline is under the stewardship of Business Rescue Practitioners who have in the past four months been engaged in attempts to rescue and restructure the airline. Part of this process is to consult with creditors, unions and the shareholder as the process unfolds,” the statement said.

“As a result, there are discussions with the unions on alternatives to the current SAA business model, the success of the business rescue process, and the best possible outcome for the airline’s employees.”

The department also said the government was “committed to a dynamic and viable aviation sector that will serve as a contributor to a number of sectors of the economy” and the public would be “informed of any significant developments in this process”. ​