Public Enterprises Department not ready to deal with SAA’s pilots packages

The Public Enterprises Department says it is not prepared to deal with additional demands from the South African Airways Pilots’ Association (SAAPA)’s regarding Voluntary Severance Packages. Earlier this week various unions except SAAPA endorsed the severance packages at South African Airways (SAA).

The department says it is concerned that the pilots are seeking benefits which are far more financially rewarding than any other group of employees at the airline.

The department says about 600 SAA pilots make up 13% of SAA staff, and take up 45% of the wage bill. The lowest of SAA’s 170 senior pilots earn R3,6 million a year, without benefits.

Out of the R2,2 billion proposed budget for the retrenchments, pilots will get more than R1 billion.

The SAA’s Pilots Association says it has advised its members wishing to take up the VSP’s to go ahead and apply for it. SAAPA has proposed the retrenchment of 1 548 employees and the retaining of 3000 employees.

The DPE says this proposal is not in the best interest of the airline, as it retains a much larger number of employees than the airline can afford. The DPE has further informed SAAPA their proposals cannot be accepted and will not accede to further unreasonable and greedy demands from the union’s leadership for additional benefits.

Meanwhile, the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) have welcomed the decision by the Labour Appeal Court to dismiss the appeal launched by the SAA Business Rescue Practitioners (BRPs). 

The practitioners wanted the court to set aside the Labour Court’s decision, barring them from proceeding with retrenchments at SAA without a Business Rescue Plan.

In May, the court found that the proposed retrenchment at the airline was procedurally unfair. It then instructed SAA and BRPs Siviwe Dongwana and Les Matuson to withdraw the retrenchment notice. 

The Labour Appeal Court has upheld that decision, which found that Section 136(1) or Chapter 6 of the Companies Act does not empower a business rescue practitioner to lay off employees without a business rescue plan. 

 “How do you consult on retrenchment when there is no plan? How do you know where to cut costs? That is senseless. It must be guided by the plan. The business rescue plan is the central vehicle for deciding this,” says the unions’ legal representative, Advocate Tembeka Ngcukaitobi SC. 

Importance of the judgment 

Numsa and Sacca say the case is important for setting down clear guidelines for the BRPs.

“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 BRPs 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 BR plan.”

They have urged business practitioners to adhere to the law.

“We are pleased that the LAC found in our favour. It was important for us as unions to defend the decision of the Labour Court because BRPs are not a law unto themselves. They cannot be given unfettered power to simply cut jobs as they wish, without adhering to the law which governs their existence. Numsa and Sacca continue to drive an agenda for the working class, by putting the interests of workers and their families’ first. This court victory is another example of our commitment to defending workers and protecting their rights. 

Severance packages 

On Tuesday, six major labour unions and the government reached an agreement with regard to severance packages for SAA employees. Unions say the airline will retain 1 000 employees and a further 1 000 will go on a training and layoff scheme.

Training will take place through SETAS.

In the video below, Numsa’s Phakamile Hlubi–Majola says they are pleased that more jobs will be retained: