Home South African Dept tells SAA unions there is no money for better severance pay

Dept tells SAA unions there is no money for better severance pay

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The Department of Public Enterprises has stressed that it is not able "to accede to any further demands from sections of union leadership for additional benefits", given the financial constraints on government

File picture: Rogan Ward / Reuters

THE DEPARTMENT of Public Enterprises (DPE) said on Tuesday it would not be able to entertain further demands from labour unions regarding the retrenchment process at South African Airways which forms part of a proposed business rescue plan for the national carrier.

It said it had addressed unions’ concerns over the number of people to be retrenched during a meeting last Friday with the National Union of Metal Workers of South Africa (Numsa), the South African Cabin Crew Association (Sacca) and the South African Airways Pilots Association (Saapa). 

“The concerns that they have were addressed. The concerns centred on the number of people to be retrenched and the value per employee of the proposed VSP (voluntary severance package),” the department said.

“The department emphasised that the 1 000 people start-up number and the R2.2 billion budget for the VSP were arrived at with the view to ensuring restructuring results in the formation of a viable, sustainable, competitive airline that provides integrated domestic, regional and international flight services.”

The plan envisions retaining only 1 000 of the current staff complement of close to 5 000 employees.

The department stressed it was not able “to accede to any further demands from sections of union leadership for additional benefits”, given the financial constraints on government. 

“As a shareholder on behalf of government, the DPE has made it clear to all the unions that the R2.2 billion budgeted for VSPs is the best that can be made available when government is faced with massive financial demands and constraints in the current financial crisis facing our economy,” it said.

The severance packages consist of one week’s pay per completed year of service, one month’s notice pay, a 13th cheque, payment of accumulated leave plus a top-up of a back-dated 5.9% wage increase agreed late last year as unions staged a crippling strike at the airline.

SAA was placed into business rescue a month later.

Public Enterprises Minister Pravin Gordhan has been a vocal proponent of salvaging the loss-making airline and turning it into a sustainable business, rather than letting it be liquidated.

“It is important that we ensure that we have an airline that emerges from the business rescue plan that will not be burdened by unsustainable agreements,” the DPE emphasised.

It called on the recalcitrant unions to hold talks among themselves about the proposal, which will be put to a creditors’ vote on July 14, after an earlier scheduled vote was delayed, partly at the urging of the unions.

– African News Agency