Trade unions have accepted SAA retrenchment conditions

Most unions at the South African Airways (SAA) have agreed to retrenchments where approximately 2 700 staff members will be retrenched, while the Department of Public Enterprises seeks to have a business rescue plan adopted for the airline.

The department said metalworkers union Numsa and the South African Cabin Crew Association (Sacca) eventually agreed to a severance package, although the South African Airlines (Saapa) Pilots Association still opposes it.

“The parties have agreed that ‘they have no objection to the offer of a voluntary severance package to individual employees as proposed by the Department of Public Enterprises’,” the department said, adding the agreement gives momentum to the adoption of a business rescue plan by the creditors.

The agreement of the two key unions follows after the business rescue team published a schedule of amendments to the airline rescue plan. This confirms that the cost of retrenchments and benefits will not exceed R2.2 billion.

However, the position of the Pilots Association is still unclear. The union intends to consult directly with the business rescue practitioners.

The unions were instrumental in postponing a scheduled vote on the plan, submitted by business rescue practitioners Les Matuson and Siviwe Dongwana, after July 14.

The department said staff, who have accepted voluntary severance packages, will receive the payouts as soon as the creditors approve the plan. At least 75% of creditors must vote in favor of the plan before it will be accepted.

As for the business rescue proposal, 1,000 of the airline’s staff will be retained and 1,000 staff members will be placed on a retrenchment training scheme for a year. If they are not offered a post after the end of the period, they will be offered a severance package.

With regard to the amendments, all existing contracts for SAA staff will be terminated, including collective agreements and new terms and conditions will be negotiated, in line with current market conditions.

The amendments commit SAA to supporting any “more equitable and feasible restructuring plan”, which the leadership compact forum may propose, provided it does not place a greater financial burden on the airline.

Public Enterprises Minister Pravin Gordhan has openly supported the plan to overturn SAA after losing billions of rand over the past two decades, rather than liquidating it.