Unions 'reject with contempt' plans by SAA business rescue practitioners

24 April 2020 - 18:59
By nick wilson
Unions have rejected the latest move the the SAA business rescue practitioners. File photo.
Image: Gallo Images / The Times / Alon Skuy Unions have rejected the latest move the the SAA business rescue practitioners. File photo.

Two of the biggest unions at SAA are threatening legal action to remove the business rescue practitioners of the stricken state-owned airline, saying they plan to defend jobs.

A statement from the National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Sacca), which together represent about 60% of the 4,700 employees at SAA, said they also “reject with contempt both the threat of retrenchments and the ludicrous intimidation of workers by the business rescue practitioners”.

The two unions accuse the business rescue practitioners of having “taken dodgy decisions like the cancellation of flights, a move which was clearly designed to collapse and liquidate the airline” and say they have undermined “every structure of accountability including parliament, because they hide behind the Companies Act”.

Numsa and Sacca said they were left with “no option but to consider legal action to apply for an application to remove the BRPs [business rescue practitioners]”. They also called on the department of public enterprises, in particular, to join their action.

They rejected “attempts by these failed BRPs to coerce workers into signing for hollow empty retrenchment packages, when the BRPs have been unable to deliver on a turnaround plan to save our national carrier and save jobs”.

The statement, released late on Friday afternoon, comes in the wake of the rescue practitioners telling  employees, unions and creditors on Thursday there were only two options available to the crippled airline — either follow a winding-down procedure which would include retrenchments or enter into liquidation.

Rescue practitioners Leslie Matuson and Siviwe Dongwana warned in their “notice to all affected persons” on Thursday that SAA does not have enough funds to continue paying staff after April 30 and “bear the costs of the wind-down process”, saying employees had to quickly agree to a retrenchment process to ensure they received severance packages.

If the airline follows the liquidation scenario, the full severance pay of employees could be jeopardised because creditors would receive first preference.

The practitioners said these were the only two options left for the airline after they were told by the government on April 10 that no further funding “would be provided or available” to them to “develop and implement a business rescue plan”.

The first option flagged by the rescue practitioners is similar to the proposal that was sent to the unions and non-unionised staff last week Friday that recommended the retrenchment of all staff, whose severance packages would be conditional on the airline disposing of various assets over a six to 24-month period.

The practitioners say that “if an agreement can be reached with the employees, a business rescue plan can be developed and published”.

If agreement cannot be reached then the business rescue practitioners are compelled to apply for an urgent court order in the high court to liquidate the business.

Contacted for comment about the statement from Numsa and Sacca, a business rescue spokesperson said the “business rescue process continues” and that the retrenchment offer to all SAA employees remains on the table.

The BRPs have extended the deadline for employees to respond to the retrenchment offer to noon on Saturday. ​