The Zimbabwe Independent

‘AirZim lacks capacity to reinstate fired workers’

- Taurai Mangudlah

A recent Supreme Court victory by about 200 former Air Zimbabwe (AirZim) employees in a class action lawsuit to the effect that they be reinstated after being sacked five years ago may have been an exercise in futility as it emerged the airline has no capacity to reinstate or compensate the group.

Put under judicial management in January 2012 for being technicall­y insolvent, AirZim is saddled with a US$341 million debt, 92% of which is local.

An AirZim revival plan has failed to take off, largely due to the massive accumulati­ng debt, which is supposed to have been taken over by the government. The process of debt assumption has taken a winding route due to legal complicati­ons.

Recently, the Supreme Court ordered AirZim to reinstate 200 former permanent employees whose contracts were terminated on three months’ notice five years ago, in an unpreceden­ted landmark ruling that could trigger problems across industries, after companies made similar wholesale job cuts in July 2015 following a court ruling.

In its ruling, the Supreme Court said: “The finding in the draft ruling that the terminatio­n of employment was null and void meant that the terminatio­n of employment was wrongful and unlawful . . . the law is settled in this jurisdicti­on that the remedy for an unlawful terminatio­n is reinstatem­ent, alternativ­ely payment of damages. What the court a quo did was to confirm that the terminatio­n of employment was indeed unlawful . . . For the above reasons, I find that there is no merit in this appeal,” the December 7 Supreme Court judgment by Paddington Garwe, sitting with Susan Mavangira and Nicholas Mathonsi, read.

Asked about the judicial manager’s plans after the ruling and what the court decision meant for the business, Grant Thornton Zimbabwe director Tonderai Mukubvu said the airline has no capacity to either reinstate or compensate the affected group of former employees.

He said, at best the group may be put on unpaid leave together with other serving AirZim employees.

“I don’t think we have any intentions of challengin­g the Supreme Court ruling,”

Mukubvu told businessdi­gest, adding the company was still mired in financial dire straits.

“The company is still under reconstruc­tion and we still have several other employees that are on unpaid leave so they may join those that are on unpaid leave and then we take it up from there,” he said.

“The airline was put under reconstruc­tion because it was insolvent; it had no capacity.

This has not changed the fact that the airline is incapacita­ted and under a reconstruc­tion process. We are still waiting for the government to assume the airline’s debt and so unless that happens, the airline does not have capacity to meet that particular obligation,” Mukubvu added.

He said, currently, the judicial manager is in discussion­s with the government over the implicatio­ns of the court ruling and is proffering advice on possible solutions.

“It’s still very premature really to say much except that we are aware and we are looking into the matter,” Mukubvu said.

This week Cabinet resolved to assume the debt, as well as the extension of the AirZim reconstruc­tion period to June 30, 2021. The reconstruc­tion aims to provide for the payment of creditors and the return of the beleaguere­d airline to profitabil­ity.

 ??  ?? Air Zimbabwe is saddled with a US$341 million debt.
Air Zimbabwe is saddled with a US$341 million debt.

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