Members of Parliament on Wednesday heard a plea from the troubled state airline, South African Airways (SAA), for an injection of R744,4-million to pay for one-off labour restructuring costs. The cash, they were told, is needed before the last day of November.
Parliament’s finance portfolio committee heard an appeal from the airline to support Finance Minister Trevor Manuel’s Adjustments Appropriation Bill which will allow the money to be paid over, even though it was not mentioned in his budget speech in February.
SAA acting chief financial officer, Clive Else, told the committee that to restore the company to profitability — to a bottom-line profit of 7,5% which he said is its peer group standard — will take a minimum of a R2,7-billion improvement in its finances.
Departmental initiatives, which include labour restructuring, will amount to R1,01-billion of this.
He said that the job cuts started at management level with 30% of managers losing their jobs. “Two hundred and twenty managers were eliminated as a first step,” Else said.
“This now needs to filter all the way down.”
He told the MPs that there had been extensive negotiations with the three main unions in the company, which were still going on.
He said that all the airline’s staff had been served with a “section 189” letter to begin a consultation process, and that the 60 day negotiating period technically expired at midnight on November 5.
“The maximum number of employees to be forcibly retrenched, if no savings are made from conditions of employment, will be 2 232,” Else said.
He said that voluntary severance packages, which were granted to management, had now been taken by other employee groups.
He said the 2 232 retrenchments represented the worst-case scenario. The exact number was now being finalised. The precise total of retrenchment and severance pay could only be determined at the end of the negotiations. ‒ I-Net Bridge