Unions threaten legal action to have SAA business rescue practitioners removed

The National Union of Metalworkers of South Africa and the SA Cabin Crew Association are considering taking legal action against the business rescue practitioners of South African Airways, they said in a joint statement late on Friday afternoon.

The two unions, which together form a majority of union representation at the embattled state-owned airline, say they are eyeing a court application to have the BRPs removed.

A week ago the Department of Public Enterprises (DPE) rejected a request for further funding of about R10 billion from the BRPs in order to complete the business rescue process.

The BRPs had also earlier started a Section 189 process with employees on restructuring the company. About a week ago the BRPs offered all SAA employees (excluding Mango and SAA Technical staff, subsidiaries which are not in business rescue) severance packages at the end of April to all staff.

Employees have been given until next week to accept the agreement, which has since been adjusted.

Up to April, all employees have received their full salaries.

‘Defend the airline’

“We are calling on government, and in particular the Department of Public Enterprises in the interest of saving SAA, to join our application to defend the airline, and work with us in developing a turnaround plan that will secure the future of the airline and save jobs,” Numsa and Sacca state.

Earlier on Friday, in a public address about Covid-19 funding, Minister of Finance Tito Mboweni spoke of a “new economy” that could emerge after the lockdown ends. He said there will be new opportunities for companies to grow. Referenciing Gordhan, Mboweni said a new airline could arise from “the ashes of SAA”.

Numsa and Sacca accuse the BRPS of having “an agenda to strip the assets of the airline” and to liquidate it.

“We are left with no choice but to approach the court, not only to remove them but also to demand a full breakdown of exactly how they have spent our hard earned tax money…This is a battle for the very survival of the airline and for all the working class families who will be affected ” say the two unions.

Repeated bailouts 

On Tuesday the DPE informed the unions at a meeting, which excluded the BRPs, that SAA can no longer depend on financial support from government. This comes after government has repeatedly bailed out the airline over the years, often at the very last minute.

Representatives of the SA Transport and Allied Workers Union, National Union of Metalworkers of SA, the SAA Pilots’ Association, the National Transport Movement, the Aviation Union of Southern Africa and the Southern Africa Cabin Crew Association were among those in attendance.

The DPE said all parties need to commit to a creative solution to avoid the business rescue process, which started in December last year, from failing. According to the DPE, a consultative forum would be established for talks on how best to ensure the well-being of employees.

The BRPs said in response to Numsa and Sacca’s threat of legal action, that the Section 189 process continues and the offer of termination of employment is still on the table.

In the view of the BRPs a winding down process would obtain a better option for employees and creditors than a mere liquidation.

On Thursday the BRPs said the airline cannot survive beyond month end, and the choices left are either a forced liquidation or a winding down process. The practitioners said they do not have sufficient funds available to continue honouring the obligations of SAA to its employees beyond 30 April 2020.

The DPE referred Fin24 to the BRPs for comment.