SAA res­cue in labour court’s spot­light

• Unions want the court to com­pel business res­cue prac­ti­tion­ers to com­ply with sec­tion 189 of the Labour Re­la­tions Act if there are to be any re­trench­ments

Business Day - - FRONT PAGE - Luy­olo Mken­tane Po­lit­i­cal Writer mken­[email protected]­

The labour court has no ju­ris­dic­tion to hear an ap­pli­ca­tion op­pos­ing the loom­ing re­trench­ments at SAA, the business res­cue prac­ti­tion­ers of the loss-mak­ing state-owned air­line ar­gued on Thurs­day.

The labour court has no ju­ris­dic­tion to hear an ap­pli­ca­tion op­pos­ing the loom­ing re­trench­ments at SAA, the business res­cue prac­ti­tion­ers of the loss­mak­ing state-owned air­line ar­gued on Thurs­day.

Unions or­gan­is­ing at the air­line, the Na­tional Union of Me­tal­work­ers SA (Numsa) and SA Cabin Crew As­so­ci­a­tion (Sacca), are op­posed to the re­trench­ments.

In an af­fi­davit, business res­cue prac­ti­tion­ers Siviwe Dong­wana and Les Ma­tu­son ar­gue that SAA is cur­rently in business res­cue and that, ac­cord­ing to the Com­pa­nies Act, no le­gal pro­ceed­ings should pro­ceed with­out their con­sent or with­out the leave of the court.

A business res­cue process is aimed at re­ha­bil­i­tat­ing a fi­nan­cially dis­tressed com­pany by re­struc­tur­ing its af­fairs, in­clud­ing its debt, among other things.

“The ap­pli­cants have nei­ther sought nor ob­tained the con­sent of ei­ther or both of the [business res­cue prac­ti­tion­ers] of SAA. The leave of the court has not been ob­tained,” they said.

Numsa and Sacca had ap­proached the courts af­ter the prac­ti­tion­ers had an­nounced that the air­line would can­cel all do­mes­tic flights, ex­cept for a re­duced ser­vice to Cape Town, as well as some in­ter­na­tional and regional flights, at the end of February in a bid to cut costs.

The de­ci­sion has been crit­i­cised by the unions, while Pres­i­dent Cyril Ramaphosa, Eastern Cape premier Os­car Mabuyane and his KwaZulu-Natal coun­ter­part Sihle Zikalala have also ex­pressed their dis­sat­is­fac­tion with the de­ci­sion. The prac­ti­tion­ers have in­sisted that the de­ci­sion to cut flights was taken in the best in­ter­ests of SAA.

In a meet­ing with em­ployee rep­re­sen­ta­tives last week, the prac­ti­tion­ers said re­trench­ments are now un­der con­sid­er­a­tion and the com­pany can­not af­ford the manda­tory 60-day con­sul­ta­tion process pre­scribed by the Labour Re­la­tions Act.

They are said to have asked for an ex­pe­dited process, ar­gu­ing that the funds they have left could be ex­hausted by the end of March.

SAA re­cently re­ceived a R3.5bn loan from the De­vel­op­ment Bank of South­ern Africa (DBSA), which en­abled it to con­tinue fly­ing while the prac­ti­tion­ers pre­pare to re­struc­ture the air­line into what is hoped will be a sus­tain­able business.

The unions want the court to com­pel the prac­ti­tion­ers to com­ply with sec­tion 189 of the Labour Re­la­tions Act if there are to be re­trench­ments, which they ar­gue is a fore­gone con­clu­sion. They are against ex­pe­dit­ing the process.

They also want SAA not to go against an agree­ment reached dur­ing wage ne­go­ti­a­tions in 2019, in which the com­pany would make use of the gov­ern­ment training lay­off scheme.

At the labour court on Thurs­day, ad­vo­cate Tem­beka Ngcukaitob­i, rep­re­sent­ing Numsa and Sacca, ac­cused SAA of ef­fec­tively em­bark­ing on a re­trench­ment process with­out fol­low­ing the let­ter of the law.

He said the can­cel­la­tion of SAA ser­vices was not a mere re-or­gan­i­sa­tion: “It’s ter­mi­na­tion of em­ploy­ment. Re­trench­ments are con­tem­plated, if not, why would [the prac­ti­tion­ers] waste ev­ery­one’s time and say they want an ac­cel­er­ated process [in deal­ing with this mat­ter].”

“SAA is con­tem­plat­ing re­trench­ments and the rea­son it wants to do it quicker is be­cause the [R3.5bn] bailout is run­ning out. It’s clear SAA has em­barked on a process of ter­mi­nat­ing em­ploy­ment con­tracts: ev­ery­one in­clud­ing the pi­lots are going to be job­less. What we are say­ing is that they must follow the Labour Re­la­tions Act,” Ngcukaitob­i said.

Ad­vo­cate Andrew Red­ding, rep­re­sent­ing the business res­cue prac­ti­tion­ers, said the unions could not bring pro­ceed­ings against a com­pany in business res­cue un­less they con­sent. SAA was placed in business res­cue in De­cem­ber in an ef­fort to try to re­struc­ture the com­pany that has re­ceived more than R20.5bn of fis­cal sup­port over the last three years.

Red­ding painted the unions as jump­ing the gun on the re­trench­ment process, say­ing there is no ev­i­dence any­one has had their ap­point­ment ter­mi­nated. He de­scribed the move to cut flights as a man­age­ment de­ci­sion, say­ing it was made to save cap­i­tal and was not a re­struc­tur­ing de­ci­sion, as such.

“SAA is in dire fi­nan­cial straits ... what is re­quired ef­fec­tively is that the prac­ti­tion­ers be given op­por­tu­nity to de­velop a plan. They say re­trench­ments are en­vis­aged, not con­tem­plated,” said Red­ding.

Judge Gra­ham Moshoana said he will “pos­si­bly” de­liver a judg­ment or order on Fri­day.

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