Four unions sign up for SAA severance packages, but not largest ones

Four unions at SAA, plus a group of staff representatives, have agreed to sign the voluntary severance packages offered as part of the flag carrier’s business rescue process, the department of public enterprises (DPE) confirmed on Thursday.

The unions named in a statement are the National Transport Movement (NTM), the South African Transport and Allied Workers Union (Satawu), the Aviation Union of Southern Africa (Ausa), Solidarity, and representatives of SAA non-unionised managers and ground staff.

However, the National Metalworkers Union of South Africa (Numsa), the South African Cabin Crew Association (Sacca) and South African Airways Pilots’ Association (Saapa) have not signed or indictaed they will sign. Together, theses three unions form the majority of union representation at the embattled airline.

SAA went into business rescue in December last year following years of losses and repeated state bailouts. Seven months later, its business rescue plan has still not been voted on by creditors.

“The unions and staff representatives said they supported the VSPs [voluntary severance packages] which include one week calculated per year of completed service, one-month notice pay, accumulated leave paid out, a 13th cheque and a top-up of severance packages calculated on a back-dated 5.9% wage increase which was agreed to in November last year,” the DPE said in a statement on Thursday afternoon.

‘Unreasonable and greedy demands’

It added: “The DPE is not a position to accede to any further unreasonable and greedy demands from sections of union leadership for additional benefits.

“It is important to recognise that the creditors would be keeping a watchful eye on how much money was being spent by SAA as opposed to what they were trying to recover in the business rescue process.”

The practitioners are due to table a revised business plan on 7 July. This is expected to be voted on by creditors a week later. A vote in favour by a 75% majority of the voting interests and 50% of independent interests is required to carry the vote.

‘Long and painful ordeal’

If the plan is not adopted, the airline will face liquidation – which the DPE described as potentially “protracted and costly” and “something representatives of NTM, Satawu, AUSA, Solidarity, and SAA staff, said would be a long and painful ordeal”.

The new voting date was set after a majority of creditors voted at the end of June to postpone it. At the time, the BRPs argued this would have a detrimental impact on the airline, as the plan gave 15 July as a deadline for government to come up with funding to prevent its liquidation.

The DPE echoed this, slamming unions Numsa, Sacca and Saapa’s decision to back a motion by SA Airlink to postpone the creditors’ vote. The unions had argued an adjournment was necessary to propose a better plan and to discuss funding with government.

But according to the DPE, their actions amounted to “align[ing] themselves with a competitor who stands to benefit substantially should SAA be liquidated”.

“The postponement of the creditors’ vote puts the business rescue plan, severance benefits in the VSPs for employees and the retention of 1 000 jobs at risk. The postponement also creates uncertainty for creditors, SAA employees and potential investors,” the DPE said.

“Should the business rescue fail, the liquidation of SAA will mean that employees would receive up to a maximum amount of R32 000 per employee if there are funds available,” it added.

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