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Jobs bloodbath looms at SAA

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Proposal to retrench 4700 workers at SAA.

Johannesburg – A  jobs bloodbath is looming at SAA after business rescue practitioners proposed the retrenchment of 4700 workers by the end of the month due to the airline’s cash crunch.

After the government rejected a bailout request of R10 billion, the business rescue practitioners have moved to cut off all staff at the airline.

Spokesperson for the business rescue practitioners, Louise Brugman confirmed on Saturday that a proposal to retrench the staff had been sent to unions.

“A proposal was given to the staff and unions. It has yet to be agreed upon,” said Brugman.

According to the proposal , employees would see their employment terminated by mutual agreement on April 30. They would be entitled to one week’s pay for every year of service, one month’s pay in lieu of notice pay and pay for outstanding annual leave.

The proposal said it seemed “unlikely that the company will be successfully rescued as a result of the business rescue process”.

The business rescue practitioners propose to sell off the assets of SAA and make payments over a period of time.

In the proposal, the business rescue practitioners stated that SAA would have to pay severance packages to staff members in an amount conditional upon on the sale of the airline’s assets.

“In order to make payment of the severance packages set out in clause 4.1… the company is required to sell and dispose of its assets,” reads the proposal.

“The company has the following assets, which will be realised at varying times: property, which may be realised within six to 12 months; rotables, which may be realised within 12 to 24 months; and trade debts, which may be collected between six to 12 months, depending on the financial position of the debtors.

“The payment of the severance packages as set out in clause 4.1.1 is conditional upon the assets set out in clause 5.2… being realised at the value capable to cover the severance packages.

“In the event that the condition precedent set out in clause 5.3… is met, the company will make payment of the severance packages to employees on a monthly basis, over a period of six months, once the sale of assets has been concluded.”

In the event of SAA being unable to sell the assets at the value that was expected, employees would receive severance packages equal to the amount received from the sale of assets.

However, if the workers were unhappy with that, they could file a claim against any liquidators for outstanding amounts.

Talks with unions will resume on Monday.

SAA has been facing a crisis for several months, and the Covid-19 pandemic has worsened its financial position. It has been unable to make a profit over the past nine years and has been relying on the government for bailouts.

The Department of Public Enterprises, which oversees the airline, said no agreements have been concluded about potential mass retrenchments as talks with creditors and unions continue.

“There are discussion with the unions on alternatives to the current SAA business model, the success of the business rescue process and the best possible outcome for the airline’s employees,” the department said in a statement.

Political Bureau