Mixed messages from government as SAA shut down

By CLAUDI MAILOVICH and GENEVIEVE QUINTAL

Public enterprises minister Pravin Gordhan will brief the cabinet on the fate of SAA on Monday, while the national airline’s business rescue practitioners are due to meet unions.

SAA is insolvent and its liabilities outweigh its assets. The airline was put into business rescue in December 2019, a process that hands over management to practitioners who have a mandate to facilitate its rehabilitation.

But SAA was dealt a further blow with the outbreak of the coronavirus, which has grounded the global aviation industry.

The future of SAA hangs in the balance after the department of public enterprises last week turned off the money tap to the broke state-owned business.

The government’s mixed message over the airline has contributed to confusion, with the department on the one hand refusing to make more money available for the business rescue process and on the other hand saying no decision has been taken on restructuring the airline, which could see full-scale retrenchments.

A draft proposal made by the business rescue practitioners to trade unions on Friday delved into the process for termination of all employees at the end of the month with severance packages, but only if funds exist at the end of the winding down of the company.

In a proposal sent to unions and seen by Business Day, rescue practitioners Les Matuson and Siviwe Dongwana said that for SAA to pay severance packages the airline would have to sell and dispose of its assets.

n a joint statement released on Sunday evening the National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Sacca), who are both not part of the retrenchment negotiations as a result of not being consulted on the business rescue plan, said the two unions rejected the proposed agreement by the business rescue practitioners.

“Sacca and Numsa are currently engaged in talks with the shareholder and therefore are of the firm belief that SAA can be saved and will be saved. We therefore see no need to subject workers to these horrific offers that are being made by one of the BRPs [business rescue practitioners], in the absence of a business rescue plan,” the unions said.

Sacca and Numsa said they were considering their options in dealing with this “unacceptable state of affairs”, but advised their members in the interim to ignore the content of the collective agreement and allow “those who are serious about the future of SAA and the country time to further engage in constructive discussions”.

He said the process must be stopped and that it must start with the removal of SAA’s board. Kader said the current board should be dissolved and not be given more money, and that Sacca had no faith in the business rescue practitioners.

“We can’t continue with the process with the people in charge,” Kader said.

He said the union had written to SAA to halt the process, but the discussions between the business rescue practitioners and the unions had nevertheless continued.

However, Mashudu Raphetha, president of the National Transport Movement union, was emphatic that this will not be the end of SAA.

He said his union wanted alternatives to be factored into the agreement with the business rescue practitioners. These included granting early retirement to all employees over 55, offering voluntary severance packages to all other employees, facilitating placement of affected employees to other state-owned enterprises, and cancelling erroneous and illegal contracts.

Raphetha said the draft agreement did not propose to lay off all SAA employees but was presented as a way to conclude an agreement that would regulate voluntary severance packages.

Derek Mans, trade union Solidarity’s representative for aviation, said the unions would meet the business rescue practitioners on Monday at 11am, together with the Commission for Conciliation, Mediation and Arbitration (CCMA) to discuss the draft proposal.

Mans said he saw the proposal as one that was preparing for a worst-case scenario of SAA being winded down, which may be necessary “should there be no knight in shining armour”.

He said Solidarity was obtaining legal advice on the document.

Mans said the mixed messages from the government were worrying as they created expectation and resulted in organised labour not knowing where it stood.

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