Gordhan wants to 'change playing field' in SAA's rescue process, court hears

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On behalf of Gordhan, Advocate Themba Skosana SC argued that government was not only involved in SAA's rescue process by manner of being its shareholder, but also on a practical level.
On behalf of Gordhan, Advocate Themba Skosana SC argued that government was not only involved in SAA's rescue process by manner of being its shareholder, but also on a practical level.
  • Numsa and Sacca have accused Public Enterprises Minister Pravin Gordhan of wanting to change the playing field of SAA's rescue process.
  • Gordhan wants to be joined in an application the two unions brought against SAA and its joint rescue practitioners.
  • The unions want to force the rescue practitioners to pay their members who have not accepted a three-month back pay offer by the Department of Public Enterprises.


Public Enterprises Minister Pravin Gordhan is trying "change the playing field" by attempting to get the Labour Court to sanction deviating from SAA's approved business rescue plan and to get an unfair advantage in terms of the collective bargaining process.

This was claimed by attorney Minnaar Niehaus on behalf of the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) in their urgent application in the Labour Court on Monday.

Gordhan wants to be joined to the application - which the two unions brought against SAA and the joint rescue practitioners - in his capacity as minister. Gordhan, as well as the airline and rescue practitioners, are opposing the application.

The unions want 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.

"By wanting to be joined to an urgent application for back pay brought by Numsa and Sacca in the Labour Court, the minister is trying to not only oppose the application, but to gain an advantage he would not otherwise have... At this point... the business rescue practitioners are responsible for SAA. There has been an approved rescue plan. That plan must be implemented by the rescue practitioners," argued Niehaus.

"The shareholder [the DPE] that committed to that plan and to the funding cannot unilaterally come [in] after the event and without taking the matter to the creditors' committee. That is unlawful in terms of the Companies Act. We do not agree that SAA and the rescue process will fail if the court grants the application. A creditors' meeting can decide if the rescue process should continue or if SAA should be liquidated. It is inappropriate the way [the minister] wants to intervene here."

Full and final settlement of back pay

The settlement agreement stipulates that it is a full and final settlement of all back pay that had accumulated since the airline was effectively "mothballed" in May last year.

Niehaus argued that Numsa and Sacca 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.

In his 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.  

"What is at stake are fundamental rights in terms of the Constitution, like human dignity and not merely commercial rights," argued Niehaus, adding that the financial hardships of those on behalf of whom the urgent application is brought, are deteriorating on a daily basis.

He added that the urgent application was brought now since funding had just become available.

"This belated demand that employees must waive the right to remuneration was never part of the rescue plan. The employees have a legitimate claim," said Niehaus.

Numsa and Sacca argue 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.

Money came with strict conditions

Advocate Andrew Redding, SC, on behalf of SAA and the rescue practitioners, said 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.

Redding 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.

Redding pointed out that Numsa and Sacca members who did not sign the settlement agreement did not lose their legal right to the full back pay.

"Our submission is that the Basic Conditions of Employment Act wants to prevent an employer from using power to victimise an employee by compelling the employee to accept a term of employment contrary to the Act."
- Adv. Andrew Redding

"In this case, SAA employees were offered a three-month full and final settlement of back pay, but if they did not accept it, they would still have their claim. They were not forced to accept the offer so there was no victimisation," said Redding.

'A case about money'

"We say pure economic hardship is not a basis for urgency. The difficulty here is, if one opens the door here and says economic hardship is an issue, then it becomes an issue of the grading of economic hardship. In essence, this is a case about money. Our submission is [that] it is not urgent. We say the urgency is self-created. The money became available in November and negotiations took place in December and an agreement with those parties who accepted it was reached prior to Christmas. Why are these unions bringing the matter to court only now?"

He argued that Numsa and Sacca have alternative remedies available due to their claim in terms of all their wages due.

"What they want, however, is parity with those who accepted the agreement, but without compromising their rights under the agreement," concluded Redding.

Advocate Themba Skosana, SC - on behalf of Gordhan - 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. Skosana also concurred with the arguments made by Redding on behalf of the airline and the rescue practitioners. 

Judge André van Niekerk reserved judgment and indicated that he would try to make a ruling this week. 

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