Will ‘new’ SAA fly as unions fight retrenchments?

The National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Sacca) approached the labour court to block the SAA business rescue practitioners from going ahead with the planned retrenchment of the national carrier’s nearly 5 000 workers.
The National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Sacca) approached the labour court to block the SAA business rescue practitioners from going ahead with the planned retrenchment of the national carrier’s nearly 5 000 workers.

Government and a section of the workers’ unions at SAA are optimistic that a new national carrier could be raised from the ashes of SAA.

But the courts may yet pronounce on the validity of the process to wind down or liquidate SAA in the absence of a business rescue plan, as the National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Sacca) approached the labour court to block the SAA business rescue practitioners from going ahead with the planned retrenchment of the national carrier’s nearly 5 000 workers in a process that could see the airline either wind down or be liquidated.

On Friday, the public enterprises department said it was looking at “a business model that deals with what a new national carrier of the future will be, but also how this can be achieved to ensure a competitive edge in safety, quality and costs in the sectors within which SAA competes”.

Public enterprises spokesperson Richard Mantu said that the agreed intention was to produce an airline that would be a catalyst for investment, job creation in key sectors and economic growth throughout all regions of the country, and would also be a mirror to the world, reflecting the splendour and beauty of our great nation.

Airlines around the world are failing, but with the correct vision, leadership, business and operating model, as well as funding and implementation, the new national carrier will be well positioned to take to the skies again and contribute to the South African and African economy
Public enterprises spokesperson Richard Mantu

“And to do so by designing an airline that will be funded through a variety of options such as strategic equity partners, funders and the sale of non-core assets, the parties are still of the view that the state must continue to play a role,” Mantu said.

He said the creation of a new, dynamic airline with the correct corporate structure, led by skilled, competent and experienced management and staffed at competitive and benchmarked rates, would allow for the new SAA to compete in the post-Covid-19 coronavirus world.

“Airlines around the world are failing, but with the correct vision, leadership, business and operating model, as well as funding and implementation, the new national carrier will be well positioned to take to the skies again and contribute to the South African and African economy,” he added.

He said government and union leaders recognised that there were going to be serious challenges to overcome.

Read: Has SAA reached the end of the runway?

However, he said that “it is essential to build a leadership coalition which is robust and strong enough to find solutions, and establish the foundations of a new airline, with a growth path in this uncertain environment, that are in the best interest of our nation and all its citizens”.

On Thursday, Numsa and Sacca said in court papers that the retrenchment plans were unlawful because the rescue practitioners, Les Matuson and Siviwe Dongwana, had not presented a business rescue plan as stipulated in the business rescue laws.

Alternatively, said the union, the court should declare that it was unfair for the rescue practitioners to continue a consultative process on retrenchments without presenting a plan.

Numsa and Sacca wanted the retrenchment notices withdrawn or the consultation process suspended until a business rescue plan was completed.

In the meantime, workers should be allowed to continue until the rescue practitioners comply with the law.

Any party that intended to oppose the application had until Tuesday to file an answering affidavit.

The rescue plan had been expected as far back as February, but, according to the practitioners, it could be published at the end of this month

It has been almost five months since the ailing national carrier was placed under business rescue, but the practitioners are yet to present a credible and financially viable plan to government, creditors and the public.

The rescue plan had been expected as far back as February, but, according to the practitioners, it could be published at the end of this month.

They had offered workers severance package options in the event that SAA was wound down or liquidated, but Numsa and Sacca refused to participate in the process.

“What the rescue practitioners are offering employees as a so-called alternative to liquidation is no better financially than what they would get anyway in the liquidation of SAA, and might even be worse since their claims will be capped as of April 30 and payment of the package is subject to the adoption of a specific business rescue plan, which might not even be published, let alone adopted,” Numsa and Sacca said.

Numsa general secretary Irvin Jim said “the implementation of retrenchments can’t be embarked on to inform and shape the content of a future business rescue plan.

"This is putting the cart before the horse, and is an unlawful pruning of the business to achieve a future outcome.”


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