The National Union of Metalworkers South Africa (Numsa) has condemned SAA-owned catering company Air Chefs for preparing to retrench 118 workers despite the airline’s impending turnaround strategy.
The union said in a press statement it received a notice of retrenchment from Air Chefs, which is a state-owned company governed by the Public Finance Management Act.
The company, the union said, has requested that consultations on retrenchments take place on the June 15 at the Commission for Conciliation, Mediation and Arbitration.
Numsa called the retrenchment “opportunistic”, as SAA is in the process of implementing its turnaround strategy which affects all companies in the group, including the airline catering company.
The union also accused the Air Chefs board and management of not consulting the union when it made the decision to retrench workers and called the “drastic step of shedding jobs” strange in light of the turnaround strategy.
SAA spokesperson Tlali Tlali agreed, telling the Mail & Guardian that retrenchment is a “last resort when all other avenues have been fully explored”. But Tlali emphasised that the notice is part of SAA’s broader turnaround strategy, which requires the entity to examine ways to “optimise our efficiencies and contain or reduce our costs”.
In the statement, Numsa demanded that any discussions regarding retrenchments should take place within the SAA Group and that any restructuring take place at a group level, instead of being decentralised.
Tlali said, as per section 189 of the Labour Relations Act, the company had to provide pertinent information through the notice to unions, including an indication of the number of workers who may be retrenched.
“Properly understood, this does not mean that the company has made a decision to lay off a specific number of employees indicated by the company to the labour unions,” Tlali said. “If anything, the purpose of this consultation is to explore avenues that could make it possible for the employer to avert laying off staff.”
The union added that it is engaging with the group’s recently appointed chief executive, Vuyani Jarana, on the retrenchments.
Jarana said in Parliament last Thursday that the reorganisation of the state airline’s staff is a necessity and the board has been in talks with trade unions on this issue.
However, he said the decision on shed staff would depend on the finalisation of a clear operational structure that would determine the staff numbers required.“Unless we address the cost base we will not be successful,” Jarana emphasised during a briefing to Parliament’s finance committee.
Jarana also announced that a special oversight committee, chaired by Deputy Finance Minister Mondli Gungubele, will be established to address liquidity issues at SAA and to come up with a way to find a strategic equity partner for the national carrier.
He said the priority over the past six months was to ensure job preservation by outsourcing and contracting out some of SAA’s staff to other airlines. He said he has already met with a number of other airlines to seek possible accommodation of excess SAA workers.
On Friday, the M&G published an investigation into the airline’s “worrying” increased expenditure on executives and consulting firms. The report found that SAA, which recently received yet another R5‑billion bailout from the treasury, is paying R25-million to Deutsche Bank in a deal to analyse its financials and restructure its debt.
Some of the emergency cash which the government has sunk into the airline, according to the investigation, has gone towards seven expensive new executive appointments, upgrading some executive positions, and paying expensive foreign consultants for work that, according to pundits, could be done locally.
Responding to the article, Tlali told the M&G that the reasons for the airline’s failure to execute a successful turnaround strategy has been a “skills deficit where personnel with requisite technical aviation skills and organisational turnaround experience to implement strategies was minimal for any meaningful impact”.
When asked whether the airline is thus more interested in attaining this so-called “skilled” personnel than it is in retaining other members of its workforce, Tlali said the turnaround strategy – “intended to save not only SAA but thousands of other direct and indirect jobs” – entails hiring executives with specialist skills.