SA AIRWAYS’ business rescuers have proposed that the government inject R26.7 billion to settle SAA’s current liabilities and for further funding of the restructured airline.     Reuters
SA AIRWAYS’ business rescuers have proposed that the government inject R26.7 billion to settle SAA’s current liabilities and for further funding of the restructured airline. Reuters

SAA negotiation platform with unions crashes

By Siphelele Dludla Time of article published Jun 29, 2020

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CAPE TOWN - The impasse between the government and labour unions over the restructuring of South African Airways (SAA) took another turn yesterday when the negotiating platform collapsed.

The Department of Public Enterprises (DPE) withdrew its participation from the Leadership Consultative Forum (LCF) after fictitious consultation between the parties.

The LFC is a mechanism formed to facilitate employee engagement towards the development of an operating model for a restructured SAA.

The DPE said the forum was not serving its intended purpose after workers’ unions and privately owned SA Airlink pushed for the adjournment of the creditors’ meeting to vote on SAA’s business rescue plan.

It said the actions of the unions had contradicted the letter and spirit of the leadership compact they signed with the department.

“These actions put severance benefits for employees and the retention of 1 000 jobs now, and 2 900 jobs as flights ramp up, at risk by supporting the postponement of voting on the business rescue plan,” the DPE said.

“This postponement also creates uncertainty for creditors and potential investors.”

SAA’s creditors will have to wait until July 14 before they can vote on the airline’s business rescue plan after the meeting was adjourned on Thursday to amend certain elements of the plan.

SAA’s business rescuers have proposed that the government inject R26.7billion to settle SAA’s current liabilities and for further funding of the restructured airline.

The rescue plan says R2.8bn is needed to get SAA flying again immediately after months of inactivity amid the Covid-19 pandemic, alongside R2.2bn to reduce the headcount to 1000 employees from about 4800.

At least R3bn is required for SAA’s unflown ticket liability, R1.7bn for lessors, as well as R600million for general concurrent creditors dividend.

The unions - the National Union of Metalworkers of SA, the SA Cabin Crew Association and the SAA Pilots Association - yesterday remained mum about this unexpected development.

The DPE last week recommended final voluntary severance packages (VSPs) of R32000 for the affected employees supported by a social plan and a skills development programme.

It said the VSPs included one week calculated per year of completed service, one month notice pay, accumulated leave paid out, a 13th cheque and a top-up of severance packages.

“The DPE believes the VSPs are fair, generous and reasonable, considering our current economic environment.

“The DPE has urged union leaders and employees to accept the VSPs on offer and focus on the social plan that is aimed at equipping individuals to re-enter the job market.”

It is envisaged that employees who take up the VSPs will be entitled to re-apply for positions in the new restructured company as it grows.

BUSINESS REPORT 

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