SAA offers employees termination contracts, union puts forth counter offer

The business rescue practitioners of South African Airways on Friday offered severance packages at the end of this month to all staff at the troubled airline after failing to get additional support from government earlier this week. The airline wanted a R10 billion bailout from the Department of Public Enterprises, which was rejected.

In the draft agreement seen by Fin24, the practitioners say it’s unlikely the airline will be successfully be turned around as a result of the business rescue process.

The proposal is that more than 4,700 employees will get as part of their severance package one week’s remuneration per completed year of service; payment of one month’s remuneration in lieu of notice pay, irrespective of any other contractual provisions; payment for accrued, untaken annual leave; and a pro-rated 13th cheque where applicable.

In order to meet these obligations, SAA will have to dispose of assets.

The National Transport Movement (NTM) has countered the offer, proposing that the services of all fixed-term contractors and consultants be terminated on 30 April; it also wants employees older than 55 years old to be granted early retirement with an added incentive like a 6-month salary.

The union wants voluntary severance packages offered to all its other members of at least three weeks’ salary for each year employed. This also applies to early retirement.

SAA Pilots Association said it would still need to canvas its members regarding the offer, while the National Union of Metalworkers of SA (Numsa) and its coalition partner the SA Cabin Crew Association (Sacca) – which together form the majority union representation at SAA – said it cannot comment at the moment.