Retrenchments at embattled SAA put on hold

An agreement has been reached between the government and SAA’s business rescue practitioners to hold off on the signing of retrenchment agreements at the embattled airline until Friday.

An undated letter to organised labour signed by public enterprises minister Pravin Gordhan circulated to the media on Saturday said: “We advise that the department (Public Enterprises) agreed with the business rescue practitioners on a moratorium on the signing of the retrenchment agreements until Friday 1 May 2020.

“As a result the employees are not obliged to sign the collective agreement for the retrenchments for the period of the moratorium.”

The BRPs had extended the deadline for employees to respond to the retrenchment offer to noon on Saturday.

The rescue practitioners were not immediately available for comment.

The battle between two of the airline’s biggest unions and the rescue practitioners intensified on Friday with the National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Sacca), which represent 60% of the 4,700 employees at the airline, threatening legal action to remove the business rescue practitioners

They also called on the department of public enterprises, in particular, to join their action.

They also said on Friday they rejected  “attempts by these failed BRPs to coerce workers into signing for hollow empty retrenchment packages, when the BRPs have been unable to deliver on a turnaround plan to save our national carrier and save jobs”.

This followed the rescue practitioners telling  employees, unions and creditors on Thursday there were only two options available to the crippled airline — either follow a winding down procedure, which would include retrenchments, or enter into liquidation. ​

The practitioners said these were the only two options left for the airline after they were told by the government on April 10 that no further funding “would be provided or available” to them to “develop and implement a business rescue plan”.

The first option flagged by the rescue practitioners is similar to the proposal that was sent to the unions and non-unionised staff last week Friday that recommended the retrenchment of all staff, whose severance packages would be conditional on the airline disposing of various assets over a six to 24 month period. The practitioners say that “if an agreement can be reached with the employees, a business rescue plan can be developed and published”.

If agreement cannot be reached then the business rescue practitioners are compelled to apply for an urgent court order application in the high court to liquidate the business.