Pilots threaten SAA with lawsuit
UNION: RESCUE PRACTITIONERS USE ‘FAVOURITISM’
➤ Barred from premises, members have not been paid since last March.
As South African Airways (SAA) prepares to exit its business rescue proceedings, the SAA Pilots’ Association (Saapa) has threatened to take legal action against the airline’s business rescue practitioners (BRPs) for alleged “favouritism” and unfair labour practices.
Saapa has referred the rescue practitioners and the airline to the Commission for Conciliation, Mediation and Arbitration for allegedly contravening sections of the Labour Relations Act and “infringing [on the] freedom of association of Saapa members”.
Saapa members have been locked out of the airline since December, pending the cancellation of the contentious Regulatory Agreement. They’ve also not received a salary since last March when the SAA ceased operations.
The members have been barred from the airline’s premises due to the lockout and have been unable to access SAA simulator facilities to qualify for adhoc work with other companies to recoup lost income.
In a letter addressed to BRPs Siviwe Dongwana and Les Matuson, dated 24 February, Saapa chief negotiator Glen Smith accuses the rescuers of discriminating against Saapa members based on their union membership.
Saapa wants the SAA to lift the lockout to allow its members to access the simulator facilities, at the company’s cost, for the next six months. This would allow Saapa members to re-qualify for their pilot’s licences and to perform their pilot proficiency checks, recency and licence renewals.
Simulator facilities artificially create an in-flight environment for training purposes and maintaining proficiency in handling airplane operations.
Non-Saapa members have been permitted to use these facilities (paid for by third parties) while the airline remains under care and maintenance, according to the association.
Smith accused Dongwana and Matuson of punishing Saapa members in favour of pilots who joined rival union the National Transport Movement (NTM) before the lockout, saying it’s a “textbook instance of trade union sweetheart-ism”.
According to Smith, the BRPs made a commitment to pay all pilots their 13th cheques (which were due at the end of April 2019) as soon as funds were available as per the company’s business rescue plan.
The payments have not been disbursed to Saapa members and pilots who resigned from Saapa after the lockout, despite the airline receiving R10.5 billion required for SAA’s business rescue, Smith says.
NTM pilots have, however, “unconditionally” been paid their 13th cheques.
The airline has withheld the payments allegedly due to Saapa members, subject to members signing a settlement agreement that was offered to the pilots in January. Smith says NTM members who are pilots were offered the same settlement, which includes three months back pay, without any conditions attached.
Additionally, all pilots who were not Saapa members and who elected to take the voluntary severance packages were afforded the opportunity to take up the back pay salary agreement on an individual basis.
The agreement was offered to the National Union of Metalworkers of SA and the SA Cabin Crew Association. Smith accuses the BRPs of rejecting Saapa’s request for the same offer to be made to its members but including pilots who are members of NTM.
The BRPs were unavailable for comment at the time of going to print.
National Treasury indicated in the 2020 budget government is reducing the number of tax incentives, and the 2021 budget has reminded taxpayers that four further tax incentives are scheduled to lapse on reaching their respective sunset dates.
Sunset clauses
The incentives in respect of airport and port assets, rolling stock and low-cost residential units have a sunset clause of 28 February, 2022.
The film incentive, which provides for the exemption from normal tax of income derived from the exploitation rights of approved films, expires on 1 January, 2022.
Treasury has invited stakeholders to provide reasons why sunset clauses should be extended. The submission deadline is 31 March. However, it has not indicated what information it requires, or in what format.
On receiving the mishmash of information from various sources, Treasury “will determine the extent to which these tax incentives enhance efficiency, transparency and fairness in the business tax system, together with how these incentives [will] facilitate economic growth through improved investment and competitiveness”.
Incentives put on watch Urban development zones and learnerships
Treasury is reviewing the urban development zones and learnership tax incentives. The incentives have been extended for two years while their reviews are completed.
Research and development
The research and development (R&D) tax incentive introduced in 2006, is administered by the South African Revenue Service (Sars) and the department of science and innovation (DSI), formerly called the department of science and technology (DST).
In 2015, the DST minister established a task team to assist in ironing out problems and making recommendations.
The R&D incentive expires on 1 October, 2022, and Treasury and the DSI will publish a discussion paper inviting public comment on the future of the incentive.
Travel and working from home
Treasury will review current travel and home office allowances to investigate their “efficacy, equity in application, simplicity of use, certainty for taxpayers and compatibility with environmental objectives”.
It recognises this could potentially have an impact on salary structuring and will commence consultations during 2021-22.
Upstream petroleum industry
After two large gas discoveries off the coast near Mossel Bay, Treasury and the department of mineral resources and energy are of the view that there is potential for further exploration.
They will jointly publish a discussion paper on potential tax reforms.
Evaluating incentives
A tax incentive should not only yield greater benefits than the cost, it should also create sustainable businesses that will grow and thrive once the incentive is used up. Obviously, the incentive should boost employment. Other required measurements should be contained in the legislation.
Unfortunately, the loose legislation written around certain incentives creates opportunities for tax avoidance.
Tax avoidance sharks will turn the incentive into a saleable product. Without sharp watchdogs at Sars to audit the incentives and challenge those getting abused, the fiscus is unnecessarily drained.
Treasury should publish an annual cost benefit analysis of tax incentives as part of the annual budget. The information should include the cost of each incentive, revenue earned, amount of tax paid (if any), as well as new jobs created in the payroll system.
There should also be information regarding businesses that closed after the incentive ran its course.