Home South African Four unions to sign SAA severance package deal

Four unions to sign SAA severance package deal

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This is part of the SAA business rescue and restructuring process, the Department of Public Enterprises said.

File image.

FOUR unions and staff representatives were ready to sign the voluntary severance packages (VSPs) offered as part of the South African Airways (SAA) business rescue and restructuring process, the Department of Public Enterprises (DPE) said on Thursday.

“(This is) a precursor to the formation of a viable, sustainable, competitive airline that provides integrated domestic, regional and international flight services.”

The department said it had received a commitment to sign the VSPs from The National Transport Movement (NTM), South African Transport and Allied Workers Union (Satawu), the Aviation Union of Southern Africa (Ausa), Solidarity, and representatives of the SAA non-unionised managers and ground staff, when the unions met with DPE representatives on Wednesday.

Pressure from labour unions contributed to the decision to delay a creditors’ vote on the proposal tabled by Les Matuson and Siphiwe Dongwana, who were appointed as business rescue practitioners in December.

The VSPs comprise one week calculated per year of completed service, one-month notice pay, accumulated leave paid out, a 13th cheque and a top-up of severance packages calculated on a back-dated 5.9% wage increase, which was agreed to in November last year.

The department said it would inform Matuson and Dongwana of the readiness of the particular unions to accept the packages.

The VSPs have been rejected by the National Union of Metalworkers of South Africa (Numsa), the SA Cabin Crew Association (Sacca) and the SAA Pilots’ Association (Saapa).

Should the plan not be adopted, the national carrier will be forced into liquidation.

“A vote against the plan would result in protracted and costly liquidation of the airline, something representatives of NTM, Satawu, Ausa, Solidarity, and SAA staff said would be a long and painful ordeal,” said the DPE.

The department said it was not in a position to accede to any “further unreasonable demands from sections of union leadership for additional and greedy demands”.

“It is important to recognise that the creditors would be keeping a watchful eye on how much money was being spent by SAA, as opposed to what they were trying to recover in the business rescue process.”

At the previous creditors meeting on June 25, where a vote was expected on the rescue plan, the unions supported a motion by SA Airlink to postpone the creditors vote. By doing so, said the DPE, they had effectively aligned themselves with a competitor that stood to benefit substantially should SAA be liquidated.

The postponement of the creditors’ vote placed the business rescue plan, severance benefits in the VSPs and the retention of 1 000 jobs at risk. The postponement also created uncertainty for creditors, SAA employees and potential investors, said the department.

“Should the business rescue fail, the liquidation of SAA will mean that employees would receive up to a maximum amount of R32 000 per employee if there are funds available.

“These payments will only be disbursed once the final liquidation and distribution account has been approved, which can take up to 24 months.”

The department said earlier it was convinced that the R2.2 billion budgeted for the VSPs was “the best available option at a time when government is faced with massive financial demands and fiscal constraints”.

The BRPs are expected to table the revised business plan on Tuesday.

The VSPs could be offered to employees immediately after creditors voted on the plan on July 14.

A vote in favour of the plan, by 75% of the voting interests, would be required to carry the vote.

– African News Agency (ANA)