Court halts SAA retrenchments as unions score big win

08 May 2020 - 17:12
By Nick Wilson
Unions representing SAA employees scored a big win in court on Friday. Stock photo.
Image: 123RF/ Jaromír Chalabala Unions representing SAA employees scored a big win in court on Friday. Stock photo.

The Labour Court has ordered the business rescue practitioners of SAA to stop planned retrenchments at the stricken state-owned airline, saying a business rescue plan had to first be presented before employees were invited to consult in such a process.

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, had taken the airline’s business rescue practitioners, Leslie Matuson and Siviwe Dongwana, to court in a bid to stop a retrenchment process involving the entire staff complement.

The case was heard on Thursday, with Judge Andre van Niekerk issuing his ruling on Friday afternoon via email.

In his summary, Van Niekerk said the “crisp issue” was whether Section 136(1)b of the Companies Act permitted a business rescue practitioner to retrench employees “only as part of a business rescue plan and on presentation of that plan or whether a retrenchment process may be initiated in the absence of a business rescue plan”.

Van Niekerk said the court decided that “on a proper interpretation of S136(1), a business rescue practitioner may initiate a retrenchment process only once a business rescue plan that contemplates retrenchments has at least been presented.”

“In the absence of a business rescue plan, the issuing of notices commencing a consultation process over proposed retrenchments is procedurally unfair," the judge said.

However, Van Niekerk  said nothing in the order precluded the business rescue practitioners from offering, or employees from accepting, a voluntary retrenchment offer.

Contacted for comment, the business rescue practitioners said: “We are considering the judgment."

Numsa and Sacca were not immediately available for comment.

This story will be updated.