CAPE TOWN – The Labour Court on Thursday dismissed an application by the South African Airways (SAA) business rescue team to appeal against a ruling that they could not initiate a retrenchment process at the national carrier without tabling a business rescue plan.
The business rescue practitioners, Les Matuson and Siviwe Dongwane, argued in their application that it was in the public interest to obtain clarity on the matter in principle.
This came after the court granted an urgent interdict in favour of the National Union of Metalworkers of South Africa (NUMSA) and the South African Airways Cabin Crew Association to halt retrenchments at the airline.
The court found that the proposed retrenchments at the airline were procedurally unfair and ordered the company and the business rescue team to withdraw the section 189 notices they had issued to this end. At issue was whether a company could consult employees about retrenchments in the absence of a plan informing the need for the retrenchments.
Thursday's ruling will have little practical import for the process as the plan has since been tabled and creditors are set to vote on it next week.
And labour unions, with the exception of the South African Airways Pilots Association, have in the interim accepted the severage package proposal put forward by the company. NUMSA and SACCA were the last unions to agree but did so this week.
However, the unions on Thursday evening welcomed the ruling as confirming an important principle in labour law, particularly as many companies companies are expected to lay off workers because of the damage the Covid-19 pandemic has inflicted on the economy.
"Although the appeal was heard after the business rescue practitioners at SAA finally published a plan, it was important for us to defend the decision of the Labour Court, because it had far reaching implications for workers and the case is important for setting down clear guidelines for business rescue practitioners as a whole," NUMSA and SACCA said in a joint statement.
"There are many companies which have filed for business rescue in South Africa, citing the Covid-19 pandemic as the reason. This judgment effectively means that business rescue practitioners may not be used by employers to prune the business by cutting jobs, and the fundamental challenges threatening the company’s survival must be addressed in the business rescue plan."
The retrenchment package comes with a price tag of R2.2 billion and the department of public enterprises has made plain that the government does not have the funding to offer better terms.
It will see only 1 000 members of the loss-making carrier's staff complement of around 5,000 retain their posts.