SAA: Gordhan reaches ‘compact’ with unions

It is understood that Public Enterprises Minister Pravin Gordhan met with the SAA unions’ representatives on Saturday. Picture: Getty Images
It is understood that Public Enterprises Minister Pravin Gordhan met with the SAA unions’ representatives on Saturday. Picture: Getty Images

SAA unions believe the airline can be salvaged and jobs saved, but Minister Gordhan and business rescue practitioners are at loggerheads 

City Press has learnt that Public Enterprises Minister Pravin Gordhan on Saturday met with the SAA unions’ representatives and “a compact” was reached.

The unions believed that the airline could still be salvaged and jobs saved, albeit in the absence of a bloated structure and some astronomical operational costs.

The meeting on Saturday agreed on “a moratorium on retrenchments for the next seven days”, according to a source.

Unions also expressed “deep frustrations” with the business rescue practitioners, including the slow pace they were moving regarding the outlining a business rescue plan.

In a letter to SAA unions late on Saturday, Gordhan said: “We advise that the department agreed with the business rescue practitioners on a moratorium on the signing of the retrenchment agreements until Friday 1 May.

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

The business rescue practitioners, Les Matuson and Siviwe Dongwana, offered severance packages to all SAA employees last week.

Unions also expressed “deep frustrations” with the business rescue practitioners, including the slow pace they were moving regarding the outlining a business rescue plan

According to the package, this month’s salary would be the last they’d receive before the airline closed its doors.

It would, however, be possible to pay the packages only after the sale of SAA’s assets, providing that there was sufficient return.

A business rescue plan, which had been expected as far back as February, could be published at the end of next month.

However, “the May salary cannot be guaranteed in the event of liquidation before the business rescue plan is published in May”, said the rescue practitioners.

According to a memo sent to workers, the assets to be sold could include buildings such as Airways Park and SAA Cargo offices, as well as those owned by the company in Cape Town, Port Elizabeth and East London.

The airline could also sell aircraft parts or components, including landing gear, engines, electronic centralised aircraft monitors, digital flight data recorders and auxiliary power units.

In terms of estimated timelines, it was proposed properties could be sold in six to 12 months and components in 12 to 24 months.

“In the event that the sale of assets is not sufficient, employees will receive a pro-rated portion of the proposed retrenchment package, proportionate to the value of the assets that might be realised, and/or employees will be entitled to lodge a claim for any payments owing,” the rescue practitioners said.

“We believe we can realise a better value for the assets in the case of a structured wind down rather than through liquidation. The sale of assets will take time, given the current Covid-19 lockdowns.”

The offer came after Gordhan informed the business rescuers that government could not afford to offer any further financial assistance to the rescue attempt.

Read: Staff face axe as SAA has less than two weeks’ worth of money left

On Tuesday, Gordhan, as chairperson of the interministerial committee on SAA, organised his own meeting with SAA’s unions.

The business rescue practitioners were not present.

The purpose of the meeting was supposedly to ensure that a “new, financially sustainable and competitive airline comes out of the business rescue process”, and to establish a consultative forum to advance dialogue and exchange ideas to protect the welfare of employees without any help from Treasury.

A draft agreement about the future of SAA was presented.

It contemplated the business rescue practitioners throwing their weight behind the agreement and concurring to suspend the restructuring process.

In a letter sent on Thursday, Solidarity asked Kgathatso Tlhakudi, the acting director-general of public enterprises, whether the forum would now replace the business rescue process.

Dirk Hermann, the union’s CEO, pointed out that stakeholders had been able to give their inputs from the beginning of the business rescue process through the creditors’ committee and labour committee for which the Companies Act provided.

Hermann asked if the intention was for the business rescuers to recognise the forum as a separate group of interest holders.

He said this would undermine the business rescue process.

He warned that the route Gordhan wanted to follow with the forum could extend the business rescue process, something the airline could ill afford.

On Thursday, Matuson and Dongwana sent a notice to affected parties, which said the lack of financing had left them with only two options – the orderly closure of the airline or immediate liquidation.

We are left with no choice but to approach the court, not only to remove them, but also to demand a full breakdown of exactly how they have spent our hard-earned tax money.
Numsa and Sacca

The employees had until Friday to indicate whether they accepted the offer, and the business rescue practitioners would hold a meeting with the creditors and labour committees on Tuesday to clarify any uncertainties.

In an apparent sideswipe at the forum, the rescuers said the committees were the appropriate forums for engaging with interested parties.

Meanwhile, the National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Sacca) had threatened to take the business rescue practitioners to court to have them removed.

In a joint statement, Numsa and Sacca said: “We reject with contempt both the threat of retrenchments and the ludicrous intimidation of workers by the business rescue practitioners at SAA.

"We reject attempts by these failed business rescue practitioners to coerce workers into signing hollow, empty retrenchment packages when the business rescue practitioners have been unable to deliver on a turnaround plan to save our national carrier and jobs.

“We are left with no choice but to approach the court, not only to remove them, but also to demand a full breakdown of exactly how they have spent our hard-earned tax money.”

Workers had until noon on Friday to provide written feedback and inputs to the proposed severance agreement, after which the company committed to respond by no later than 3pm the same day, and the offer would be concluded by the close of business.


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