Labour Court dismisses SAA unions' back pay application

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SAA argued that the money made available to the rescue practitioners by the DPE in November 2020 came with strict conditions. (Supplied)
SAA argued that the money made available to the rescue practitioners by the DPE in November 2020 came with strict conditions. (Supplied)
  • The urgent application by the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) in the Labour Court was dismissed.
  • Numsa's and Sacca's claims relate both to the conduct of the business rescue practitioners in their capacity as such, and the conduct of SAA as an employer.
  • The judge found that the Labour Court has no jurisdiction to consider the lawfulness of the actions of the rescue practitioners in this case.


The urgent application by the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) in the Labour Court was dismissed on Monday because the judge was "not persuaded that the court has jurisdiction over significant elements of the two unions' claims".

The claims relate both to the conduct of the business rescue practitioners in their capacity as such, and the conduct of SAA as an employer. The unions wanted to force the state-owned airline's business rescue practitioners to pay those of their members who have not yet accepted a three-month back pay offer by the Department of Public Enterprises (DPE) within seven days of a court order in this regard.

Numsa and Sacca argued that their members who did not sign the three-month settlement agreement should also get paid what other SAA employees - who did sign the agreement - received in December 2020 when the DPE made money available for that purpose. The unions further argued that they at least want their members to also get the three months' back pay paid to the others, but without waiving their rights to the rest of the back pay.

SAA and its rescue practitioners argued that the money made available to the rescue practitioners by the DPE in November 2020 came with strict conditions, which required employees to agree to a compromise regarding the settlement of the back pay issue. There was an engagement with unions representing employees to try to get such a settlement and it was made clear that there was no general funding available outside of what was offered in terms of the three-month full and final settlement proposal.

Outside Labour Court's jurisdiction

SAA further argued that the issue of whether the rescue practitioners did or did not comply with the rescue plan in this regard, lies outside the jurisdiction of the Labour Court as it relates to compliance or not with the terms of the Companies Act, which deals with the business rescue process. Furthermore, SAA argued that Numsa and Sacca members who did not sign the settlement agreement did not lose their legal right to the full back pay.

In Judge André van Niekerk's view, those Numsa and Sacca members should receive the three-month back pay as a matter of fairness, but without waiving their statutory rights to the rest of the accumulated back pay - unlike those who signed the settlement agreement.

Van Niekerk found that the Labour Court has no jurisdiction to consider the lawfulness of the actions of the rescue practitioners, only because they have not taken these actions as an employer. He found that the Companies Act regulates the entitlement of employees to remuneration during business rescue and establishes a clear ranking in the form of first, the payment of the rescue practitioners' expenses and the cost of the business rescue, then repayment to a lender who provided finance to the company and the business rescue and thirdly, employees' claims for remuneration.

"The DPE is such a lender. It provided such post-business rescue commencement financing with the proviso that it is used only to pay those employees who compromise their claims to payment of their remuneration in full," stated Van Niekerk.

"Whether by making the settlement proposal the business rescue practitioners have breached the requirement of [the act] by failing to treat all claims equally, or whether they have abused their positions and seek to 'extort' a compromise from the unions and the members (as the applicants allege), is not a matter that falls to be regulated by the Labour Relations Act, the Basic Conditions of Employment Act or any other employment-related legislation."

Therefore, in the judge's view, any claim that the business rescue practitioners have acted unlawfully, either by failing to follow the business rescue plan, or by failing to comply with the Companies Act, is not for the Labour Court to determine.

SAA seemingly did not act unlawfully

In any event, said Van Niekerk, even if the Labour Court did have such jurisdiction, it does not seem to him that SAA, in its capacity as employer, has acted unlawfully.

"The offer to settle a claim for some seven months' remuneration by accepting payment of three months in full and final settlement was an offer made to all affected employees. I fail to appreciate how in these circumstances it can be said that there is any discrimination against those employees who had refused to compromise their claims," said Van Niekerk.

"They remain in a position to enforce their claims in due course to the full amount of the arrear salaries [owed] to them, subject of course to the provisions of the Companies Act."

He added that the Companies Act specifically contemplates that an employer and employee may conclude an agreement to settle the dispute over remuneration.

In a ruling delivered to the parties on Monday, Van Niekerk ruled that the two unions must also pay the costs of Public Enterprises Minister Pravin Gordhan's application to be added as a respondent to the application. Van Niekerk found that Gordhan should have been joined to the application from the start. The unions opposed this application.

On behalf of Gordhan, it was argued that government was not only involved in SAA's rescue process by manner of being its shareholder, but also from a practical standpoint in terms of financing the rescue proceedings and its involvement in negotiations.

Numsa and Sacca indicated that they are studying the judgment and, therefore, are not commenting at the moment.

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