Airline gets another chance as rescue practitioners and Gordhan agree to work on a rescue plan by the end of June
(Delwyn Verasamy/M&G)
SAA workers in Durban have been told that they should not return to work on March 1. This is after the airline’s business-rescue practitioners announced earlier this month that the coastal town would be one of the 11 routes that would be closed at the end of this month.
In a recording, one of the airline’s managers at its Durban branch can be heard telling SAA workers that they will be joining the unemployment queue next month because of the decision by the rescue practitioners to close the route. The meeting was held on February 7, a day after the business-rescue practitioners released a statement detailing their intentions to restructure the ailing airline in a bid to “conserve cash, and create a viable platform for a successful future”.
The manager at the Durban branch, whose name is known to the Mail & Guardian, tells workers that “in this day and age, where the economy of our country is shrinking and companies are closing, it is a sad day indeed for all of us”.
She also tells the staff that the rescue practitioners have rejected proposals to move workers to SAA subsidiary Mango Airlines, or any other companies.
“They [the business-rescue practitioners] will be cutting Johannesburg as well. Staff members in Johannesburg will be removed in Johannesburg because the staff in Jo’burg will be too much for the current schedule that they will be having,” she says.
“In Cape Town, they will only be having four flights per day. There [are] going to be retrenchments in Cape Town as well … [SAA is] not ceasing operations but there will be drastic reductions of staff members.”
Listen to full recording here:
Unions challenge airline in court
The recording was referred to in the labour court on Tuesday as part of the applicants’ evidence. Two trade unions — the National Union of Metalworkers (Numsa) and the South African Cabin Crew Association (Sacca) — have taken the SAA business-rescue practitioners, Les Matuson and Sizwe Dongwana, to court in a bid to have their plans to terminate the services of workers interdicted.
Arguing for the unions, advocate Tembeka Ngcukaitobi said that SAA plans to retrench close to 1 000 workers. He said these retrenchments will occur without proper consultations with workers.
Numsa and Sacca argue that the rescue practitioners have not complied with section 136 of the Companies Act, which states that during a company’s business-rescue process, the rescue practitioners are still subject to the provision set out in section 189 and 189a of the Labour Relations Act.
Under the Companies Act, the rescue practitioners are required to consult with labour regarding possible retrenchments, even though a company is undergoing a business-rescue process.
SAA was placed under business rescue in early December last year. In January the cash-strapped airline received a R3.5-billion life-line from the Development Bank of South Africa. This was after the R2-billion that the airline received from private creditors in December as part of the conditions for business rescue.
Last week, following criticisms from the department of public enterprises and President Cyril Ramaphosa regarding their plans to cut 11 domestic routes, the business-rescue practitioners said that they decided to accelerate the “necessary” job cuts to maintain the airline’s cash reserves. The practitioners said that the life-line given by the Development Bank and private creditors will likely be used up by the end of March if the airline does not reduce its head count.
Ngcukaitobi said that SAA’s reasons for job cuts should be rejected on the basis that the practitioners have not complied with the law. “This is not a mere restructuring: it is a restructuring that will ultimately result in the reduction in headcount.”