Labour Court hears urgent application to stop retrenchment at SAA
7 May 2020
The Labour Court in Johannesburg will be hearing an urgent application by the National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) today, to request an order from the court to interdict retrenchments at SAA. Our application is based on the fact that the Business Rescue Practitioners have failed to deliver on a Business Rescue Plan, and therefore the section 189 retrenchment process which was started in March is unlawful in the absence of a BR plan.
In our application we are seeking the following remedies:
1. That it be declared that BRP’s issuing of Section 189/189A notices on the 9th and 19th of March 2020, was unlawful, given that they have not presented a business rescue plan as contemplated in Section 150 of the Companies Act.
2. Alternatively declaring the BRP’s issuing of section 189/A to workers and their continuation with the consultative process in the absence of a BR plan as unfair.
3. Directing the BRP’s to withdraw the relevant Section 189/189A notices, or alternatively, directing them to suspend the consultative process until the Applicants have been presented with a draft business rescue plan.
4. Assigned to the relief is that the BRP’s be directed that they may not issue retrenchment notices/letters of dismissal, because the processing of applications for severance packages were secured through an unlawful section 189 process.
5. We also seek the protection of the condition of services, in other words we seek the right to be considered on the government sponsored Training Lay Off scheme, instead of being retrenched in terms of the collective agreement.
It is common cause that NUMSA and SACCA have embarked on various legal processes to compel the SAA executive management and the board to implement the recommendations emanating from various independent forensic investigations into corruption. We’ve even gone as far as applying for SAA Technical board to be declared delinquent directors, (we are waiting for the South Gauteng High Court to allocate a date for the hearing). We’ve been forced to resort to such drastic measures because both the board and the executive management have never had an appetite for cleaning up the airline, because some of them may have been complicit in the corruption which collapsed the airline.
As NUMSA and SACCA we have consistently opposed the kneejerk and hopelessly inadequate response of the SAA management to the challenges faced by the airline, to secure savings by retrenching workers. Even after the BRP’s took over, they have consistently refused to tackle the glaring issue of the bloated procurement spend, consisting of questionable, corrupt, evergreen contracts. These continue to be an obstacle to turning SAA into a profitable and sustainable self-standing business. They have ignored labour and have deliberately turned a blind eye to the corruption that continues through these contracts, despite, having been given power in terms of the PFMA to deal decisively with these contracts.
From the time that the BRP’s took over at SAA they have never acted in the interests of workers. They never engaged us meaningfully in all our engagements, and it was clear from the onset that their agenda was the mass retrenchments of workers. In the section 189A notice one of the reasons given for the contemplated dismissals is that aircraft has been reduced from 48 to 19 with concomitant job losses. This of course is as a direct consequence of the senseless decision to cancel routes on the 4th of February! It was a decision which we vociferously opposed because we knew it would be disastrous, but the BRP’s ignored us and went ahead and acted anyway.
The substance of the collective retrenchment agreement which the BRP’s want employees to sign is that workers must agree to terminate their employment with effect from 30 April 2020 in exchange for a retrenchment packages. In the proposed agreement employees are required to indemnify the Company, its directors, the business rescue practitioners and their advisors against any claims, even though the practitioners already have protections available in section 140 of the Companies Act and despite the fact that the practitioners failed and/or refused to abide by the collective agreement reached in November 2019 to apply to the UIF for employees to be placed on the Training Layoff Scheme.
What is suspicious about the proposed collective agreement is that no asset lists let alone valuations of these assets are provided to support the promise to pay retrenchment packages out of the sale of unencumbered assets. Also, the payment of any retrenchment package is subject to substantial conditions and lengthy delays. According to the proposed collective agreement, the best case scenario if everything goes according to the BRPs’ plan, is that retrenched workers will be paid in 30 months’ time!
We have said in our court papers that what the BRPs are offering employees as a so-called “alternative” to liquidation is no better financially than what they would get anyway in a liquidation of SAA and may even be worse since their claims will be capped as at 30 April, and, payment of the package is subject to adoption of a specific business rescue plan, which may not even be published let alone adopted, and the retrenchment packages will take close to three years to pay out! The BRP’s are therefore intentionally misleading the employees. The proposal by the BRP’s of a winding down of SAA, without even producing a draft business rescue plan, is nothing more than an extended gravy train for the BRP’s and their advisors.
In return for vague promises under a non-existent business rescue plan which would be unlawful if it did exist, and against threats of an immediate liquidation at the snap of the BRPs’ fingers, workers are expected to give up all their rights now as affected persons in terms of the Companies Act. They are being coerced based upon misrepresentations of the facts and law. We are fighting to prevent workers from being placed in this unfair, unlawful and invidious position by the misconduct of BRP’s! The deadline for signing this sellout agreement is the 8th of May 2020.
NUMSA and SACCA will continue with engagements with the Department of Public enterprises on a turnaround strategy for a restructured SAA. If the BRP’s had good intentions they would have no problem supporting this initiative, because this is precisely the work which they failed to do from the time that they were appointed. We remain committed to fighting to preserve jobs at SAA and in turning around this strategic airline, for the sake of our members, and South Africa as a whole. SAA is a strategic entity which in a post-coronavirus era can play a strategic role in the growth of our economy.
This statement was issued by NUMSA and SACCA, 7 May 2020
