Gordhan: SAA employees don’t have to sign retrenchment offer … yet

Minister of Public Enterprises, Pravin Gordhan during the release of a Special Paper on Eskom, GCIS, Pretoria, 29 October 2019. Picture: Jacques Nelles

Severance packages will be funded from the sale of select assets which will take six or 24 months. 

The Department of Public Enterprises and South African Airway’s (SAA’s) business rescue practitioners (BRPs) have agreed to give labour an extension to accepting severance packages until May 1.

Creditors and unions were told by the BRPs Les Matuson and Siviwe Dongwana that a structured winding down of the business was dependent on the conclusion of retrenchments by April 24, failing which, the company would go into liquidation.

Unions and non-unionised employees where presented with a termination-of-employment agreement on April 17, after the state refused to extend further funding or provide guarantees against foreign lending in order to sustain the rescue process.

With no revenue from flights due to the lockdown, the BRPs said the company did not have enough money to cover a significant portion of due salaries beyond April. Matuson and Dongwana said the only way to salvage parts of the business and develop and publish a new business plan was dependent on retrenchments being concluded.

Severance packages would be funded from the sale of select assets which would take six or 24 months.

The BRPs and employees moved the initial deadline to 12pm on Saturday.

A letter sent to organised labour by Public Enterprises Minister Pravin Gordhan on April 25 states that a moratorium has been placed on the retrenchment of employees and employees are no longer obliged to sign the collective agreement.

This document explains how employee claims would be treated under a structured wind-down process or liquidation.

SAA 2.0

The letter made no mention of funding but the idea of a new revitalised airline coming out of the rescue process is gaining momentum.

Government’s commitment to this was first mentioned after an inter-ministerial committee on SAA made up of chair Pravin Gordhan, Labour Minister Thulas Nxesi and Tourism Minister Mmamoloko Kubayi-Ngubane met with labour to talk about the mass retrenchments proposed at SAA.

On Friday the idea resurfaced during Finance Minister Tito Mboweni’s briefing on government’s R500 billion support package for an economy ravaged by Covid-19.

Speaking on what the future of the economy will look like Mboweni supported this notion of “starting a new airline altogether from the ashes of [SAA]”.

Also read: SAA’s business rescuers issue notice that most staff will need to be retrenched

Leadership compact

Following a meeting with organised labour and senior government officials on Saturday morning, Minister Gordhan said that parties had agreed to finalise a “leadership compact”.

This compact commits the department and unions to work together towards a “national asset which is internationally competitive, viable sustainable and profitable,” said Gordhan in a statement.

“The leadership recognises the enormity of the challenge but are unequivocally committed to saving SAA and shining the torch to a new world post Covid-19 in which SAA is a key catalyst for investment and job creation.”

In a statement, the National Transport Movement (NTM) said the BRPs would be meeting the minister on Sunday to speak about the risks that come with delaying the rescue process without any funding.

The DPE will also meet with individual labour representatives to hear their submissions for possible incorporation in the final business rescue plan over the coming week. This will be followed by the BRPs with a rescue plan framework which will inform the final plan.

“It must be noted that the minister reiterated that SAA is bloated, and that job losses were inevitable but it is upon the entire leadership of SAA in their respective levels and formations to mitigate and minimise job losses,” said NTM president Mashudu Rapheta said.

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