SAA Technical starting retrenchment process that could cut more than half its staff

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Unlike its parent company SAA, SAA Technical is not in business rescue.
Unlike its parent company SAA, SAA Technical is not in business rescue.
  • SAA Technical is set to enter a retrenchment process.
  • SAAT is a subsidiary of SAA, but unlike its parent company, it is not in business rescue.
  • The Department of Public Enterprises is hoping to get a special appropriation from Parliament to channel R2.7 billion of SAA's rescue money to its subsidiaries.

South African Airways Technical is set to begin a Section 189 retrenchment process in terms of the Labour Relations Act, Derek Mans, union Solidarity's union official for the aviation and defence sector, said on Wednesday afternoon.

SAAT currently has 2 019 employees, and this number is anticipated to be reduced by 1 203 employees.

He said organised labour met with SAAT earlier during the day and all labour unions have been served with notices. The aim is to start implementing the retrenchment process from the end of June this year.

SAAT's management has applied to the CCMA to appoint a facilitator to assist the parties engaged in the consultations, he said.

"We are currently studying the notice," said Mans. Solidarity is currently running a food scheme for its members at SAAT.

Unlike SAA, SAAT and other subsidiaries like low-cost airline Mango and AirChefs are not on business rescue.

Strategic entity

SAAT confirmed on Wednesday evening that it is "with the greatest of regret" that it had to serve a formal notice of intended restructuring of its business to its employees.

"This contemplated restructuring of the business, may lead to the possible retrenchment of employees, unfortunately. The company has given this matter serious consideration and the proposal to consider a restructuring of its business has not been taken lightly," stated interim CEO Terrence Naidoo. 

In view of the ongoing business challenges faced by the company worsened by the impact of Covid-19 on the global aviation industry, it has most regrettably now become necessary to restructure the organisation in line with a reduced customer demand."

The SAAT restructuring process also caters for a "social plan" aimed at providing practical solutions for employees who are likely to be displaced.

"As part of SAAT's business plan, the organisation's restructuring seeks to position SAAT as a viable business entity capable of growing within the current and future market outlook. SAAT remains a strategic entity in the country's aviation strategy, as well as in enhancing economic recovery through air travel," concluded Naidoo.

Fin24 reported earlier that managers at SAAT had drafted a petition questioning the competence of executives running the company. Among other things, they wanted all outstanding salaries paid up. 

The managers further said they wanted exco to collect monies owing on all invoiced work, and for consequence management to be enforced where there is wasteful expenditure or where invoicing has been improperly handled. 

They additionally took issue with what they called a "bloated top management structure" as well as what they said was the appointment of foreign staff without following "proper recruitment processes". 

Last month, attempts by SAAT to make full salary payments were ultimately unsuccessful. SAAT said it paid 50% of salaries for April to all employees and the balance will be paid if funding is allocated for this purpose.

SAAT interim CEO Terrance Naidoo indicated earlier that a business plan prepared by exco had been approved by government and roll-out is imminent. The business plan aims to secure SAAT's future sustainability.

SAAT is also attempting to recover monies owed for work done. Current customer activity and revenue streams remain depressed, employees were informed last month. 

The Department of Public Enterprises hopes to get a special allocation from Parliament, which is currently in recess, in order for R2.7 billion of the R10.5 billion provided for SAA in the mini-budget in October last year, to go to the airline's subsidiaries SAAT, Mango and AirChefs.

* This article was updated with official comment received from SAAT.

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