Victory for pilots as SAA ordered to cough up for 6 months' salaries and meals

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The proceedings took place in terms of stipulations contained in SAA's business rescue plan. (Supplied)
The proceedings took place in terms of stipulations contained in SAA's business rescue plan. (Supplied)
  • SAA pilots have a claim for domestic and international meal allowances that totals just less than R11 million.
  • They are also claiming for unpaid salaries. 
  • An arbitration process laid out in SAA's business rescue plan has found that the airline must prioritise payment of their claims.

South African Airways (SAA) is liable not only to pay the outstanding salaries of members of the SAA Pilots' Association (SAAPA) for the period of 1 June to 18 December 2020, but also claims in terms of meal allowances.

This is according to an arbitration ruling concluded on Friday and seen by Fin24. 

The outcome of the arbitration ruling implies that SAA is now legally obliged to prioritise the payment of SAAPA's claims.

The arbitration process was specified in SAA's business rescue plan, and outlines a dispute mechanism where a retired judge must be appointed as an expert to preside over and resolve the dispute. The plan also sets out that there will be no review or appeal application allowed on the outcome of the arbitration. SAA is also liable for the costs of the process.

The arbitrator states in the ruling that the rights of employees must be attended to first before the right of other creditors.

SAAPA members have a claim for domestic and international meal allowances from before the airline went into business rescue, which totals just under R11 million.

The arbitration ruling is in line with SAAPA's claim that the business rescue plan incorrectly characterises and treats its members' meal allowance claim as concurrent and that it ought to characterise and treat it as a preferent claim in terms of the Companies Act, which deals with the business rescue process.

SAA was in business rescue from December 2019 to April 2021. In the medium-term budget policy statement in October last year, R10.5 billion was allocated to SAA to implement its business rescue plan. Of this money, R2.7 billion is being channelled to SAA's subsidiaries Mango, SAA Technical and AirChefs.

SAA's rescue plan only provided for about R2 billion for a "new SAA" to get off the ground. The rescue practitioners have already had to dip into this over the past few months.

SAAPA members have been locked out by the company since 18 December 2020. They are also currently on strike in an attempt to prevent SAA from making use of "scab labour" for training purposes.

SAA has indicated that it is studying the ruling and will comment in due course.

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