Labour law experts have warned that the bid by SAA workers’ unions to stop looming retrenchments at the cash-strapped flag carrier was likely to fail. Photo: Henk Kruger/African News Agency (ANA)
Labour law experts have warned that the bid by SAA workers’ unions to stop looming retrenchments at the cash-strapped flag carrier was likely to fail. Photo: Henk Kruger/African News Agency (ANA)

SAA workers' unions unlikely to stop looming retrenchments, experts argue

By Siphelele Dludla Time of article published Feb 13, 2020

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JOHANNESBURG – Labour law experts have warned that the bid by SAA workers’ unions to stop looming retrenchments at the cash-strapped flag carrier was likely to fail.

Labour law specialist Michael Bagraim of Bagraim Attorneys said yesterday that the unions should acknowledge that it was “absolutely necessary” to retrench workers to save the troubled airline.

Bagraim also said it was clear that business rescue took precedence over previous agreements the unions might have struck with the airline in terms of the Labour Relations Act (LRA).

“The business rescue (process) gives the practitioners a lot of leeway as opposed to following protocols in the LRA.

"It’s almost like an insolvency,” Bagraim said.

“I think the court is going to say the business rescue practitioners need to do whatever they can do in order to save the business.”

The National Union of Metalworkers of South Africa and the South African Cabin Crew Association will today square off with SAA’s business rescue practitioners at the Labour Court.

The unions, which together represent about 3000 SAA workers, are opposed to job losses that would come as a result of the airline terminating domestic routes.

They also want the rescuers to comply with the provisions of the LRA in terms of consulting them about retrenchments.

Alan Jacobs, the founding partner and attorney at corporate and labour law firm Mendelow Jacobs, said taking to court a company under business rescue would not be a walk in the park for the unions.

Jacobs said the unions would still have to jump over certain legal obstacles such as section 113(i)(b) of the Companies Act 71 of 2008.

The clause states that: “During business rescue proceedings, no legal proceeding, including enforcement action, against the company may be commenced or proceeded with in any forum, except with the leave of the court and in accordance with any terms the court considers suitable.”

“Accordingly, the unions will first have to overcome the above section that no legal proceedings can be pursued against a company under business rescue,” Jacobs said.

“The business rescue practitioner is entitled to proceed with a retrenchment exercise provided he complies with section 189 and 189A of the Labour Relations Act 66 of 1995 as amended.

"The matter is clearly complicated and I anticipate that new law will be made.”

SAA’s joint rescuers, Les Matuson and Siviwe Dongwana, last week announced the closure of domestic routes - except for Joburg-Cape Town - by the end of the month and said job losses could not be avoided.

They said these initiatives, among others, would support the airline's transformation into a sustainable and profitable business.

SAA was placed under business rescue in December after suffering serious liquidity challenges.

The unions are also seeking an order from the court that the rescuers must be directed to comply with the terms of the wage agreement signed in November 2019.

The agreement stipulated that workers facing retrenchment must be placed on the training lay-off scheme.

Bagraim said the unions’ training lay-off scheme argument can be a good one.

But he said it would mean that the Department of Employment and Labour should step in and pay some of the salaries while employees were being trained to do alternative jobs.

“The unions have been very reluctant to use that training lay-off scheme in the past, because people actually want to access their severance packages and they don't want to work for less money in the training lay-off scheme,” Bagraim said.

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