SAA on the skids — on Friday, staff face two stark choices

23 April 2020 - 18:27 By Naledi Shange and Nick Wilson
There is not enough money to pay staff beyond April 30. File photo.
There is not enough money to pay staff beyond April 30. File photo.

SAA employees have until the end of Friday to reach an agreement with the airline's business rescue practitioners, who say the airline does not have enough money to honour their obligations to staff beyond April 30.

Joint rescue practitioners Leslie Matuson and Siviwe Dongwana said on Thursday that there were “only two options available”.

Employees, through their unions, now have to choose after the business rescue practitioners failed to secure a further bailout from government and a previously secured bailout of R5.5bn had run dry.

One option is winding down the business, terminating employees' contracts and paying out agreed severance packages.

A sales process would have to be undertaken to ultimately result in the distribution of proceeds to affected parties. “If an agreement can be reached with the employees a business rescue plan can be developed and published,” they said.

The second option would kick in should employees not agree on the first.

“If the practitioners cannot reach an agreement with employees, then the practitioners are unable to continue with the business rescue process and the practitioners will have to make an urgent application for an order discontinuing the business rescue proceedings and placing SAA into liquidation.”

They highlighted that the halt of operations due to the coronavirus lockdown had further strained the business and, therefore, there were no funds to pay employees after April 30.

SAA has been in business rescue for the past five months. Last month, the business practitioners served employees with section 189 notices, alerting them of retrenchments.

They believed they had provided the best options to employees.

“It is the practitioners’ view that the proposed actions outlined above provide the most responsible way for a managed cessation of operations of the airline and managing the risks of all affected parties,” they said.

Feroze Kader, chief negotiator and PR for the SA Cabin Crew Association (Sacca), said Sacca and the National Union of Metal Workers of SA (Numsa) met the department of public enterprises on Monday and believed that they had held “fruitful talks” and yet the airline had come out with a “completely different message”.

Kader said it seemed the “government is playing labour against the business rescue practitioners and public perception”.

“There’s promise from the department of public enterprises and there’s negative action from SAA.

“What this is doing is creating an unhealthy environment for employees. They are now suffering from anxiety, depression and stress.”

Kader said  the only parties that will benefit will be the business rescue practitioners and attorneys as per their agreements that they be paid in full in the event of a liquidation.

He also questioned what had happened to the R5.5bn that was given by the government to the airline “from December to now through guarantees and cash”.

 “We want to know what the breakdown of that money is. What are the business rescue practitioners doing with the monies that came to SAA.”

Kader said the government still owed every SAA employee an average of R10,000 in back pay from 2019, which was signed and agreed on by SAA’s management, the board and the shareholder just after the strike of November 2019.

Kader said if the government decides to “continue with SAA” they need to “get rid of the board and the executives at SAA”.

“These people have cost the taxpayers R25bn. When will the minister of the department of public enterprises (Pravin Gordhan) realise that this board and executive team is not capable of running SAA at all, even with the assistance of the business rescue practitioners.”  ​