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SAA business rescue practitioners win leave to appeal

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The Labour Court has granted South African Airways’s business rescue practitioners leave to appeal this month’s court ruling halting the retrenchment process at the airline.

CAPE TOWN – The Labour Court has granted South African Airways’s business rescue practitioners leave to appeal this month’s court ruling halting the retrenchment process at the airline, their spokeswoman said.

“The SAA BPRs (business rescue practitioners) are pleased to note that Judge Andre van Niekerk has granted leave to appeal against the whole of the Labour Court’s judgment delivered on 8 May to the Labour Appeal Court,” Louise Brugman said.

She said the Labour Court maintained that it had ruled in accordance with the proper interpretation of the Companies Act but accepted that the judgment raised constitutional issues relating to fair labour practice.

In its ruling, the Court found found that the retrenchment notices sent to almost 5,000 staff were procedurally unfair under section 136 of the Companies Act because they had been served without being informed what the future held for SAA.

Judge Van Niekerk held that business rescue practitioners could only begin a retrenchment process once a business rescue plan had been presented to affected parties.

This meant SAA staff and their representative trade unions, as well as creditors and other interested parties.

“Section 136 (1) (b) requires that any need to retrench must necessarily be rooted in the business rescue plan.”

Once the plan envisions the possibility, the provisions of the Labour Relations Act pertaining to retrenchment then came into play.

The department of public enterprises is embroiled in a standoff with the business rescue practitioners, Les Matuson and Siviwe Dongwana, about the direction of their five-month-old intervention in SAA and the failure to devise a plan that will allow the resuscitation of the stricken national carrier as a sustainable business.

Public enterprises Minister Pravin Gordhan has said emphatically that the government will not release any further funding to them in the absence of a credible plan. They have countered that a lack of funding has hampered their work and that the global health crisis has forced further delays in completing it.