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Unions seek court action over job cuts at SAA

Creditors have given until May 29 for rescue plan.
Image: Shutterstock

Two South African trade unions are seeking court action to try to block layoffs at the embattled state-owned South African Airways (SAA), court papers seen by Reuters on Friday showed.

SAA entered a form of bankruptcy protection in December and rescue specialists Les Matuson and Siviwe Dongwana proposed severance packages for all of SAA’s roughly 5,000-strong workforce last month after the government said it would not provide any more funds.

They gave trade unions until the end of business on Friday to reach an agreement on staff severances. Otherwise, the specialists “will have to make an urgent application for an order discontinuing the business rescue proceedings and placing SAA into liquidation,” they said on April 23.

But in court papers lodged on Thursday, the National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) have asked the Labour court to order the rescue team to withdraw the proposed layoffs or suspend talks on job cuts until they have seen a business rescue plan.

The unions want a hearing on May 7.

The rescue specialists, who declined to comment on Friday, have been given by creditors of SAA until May 29 to present the airline’s business rescue plan.

The public enterprises ministry reiterated in a statement on Friday that it wanted to see SAA restructured into a new airline.

“Airlines around the world are failing, but with the correct vision, leadership, business and operating model, funding and implementation the new national carrier will be well positioned to take to the skies again,” the ministry read.

The ministry made no mention of NUMSA and SACCA’s court case or the talks between unions and the SAA business rescue team over severance packages. A ministry spokesman was not available to elaborate on the statement.

SAA has not been profitable since 2011 and has received more than 20 billion rand ($1.07 billion) in bailouts in the past three years, a drain on public resources at a time of weak economic growth.

The fortunes of SAA and that of its peers have deteriorated further with the COVID-19 pandemic which has forced airlines to suspend all commercial flights following a government imposed nationwide lockdown.

South African airline Comair said on Thursday that it was planning to cut jobs and was in talks with U.S. planemaker Boeing on the cancellation of 737 MAX 8 orders.

Comair, which operates the British Airways franchise in South Africa and owns budget airline Kulula, said it had also started negotiations with lenders to secure bridging finance.

The possibility of raising additional equity capital was also being investigated, the company said.

“Although, the company was experiencing financial headwinds prior to the COVID-19 outbreak, the five-week lockdown has caused the situation to rapidly deteriorate,” Comair said in a statement, adding it was not anticipated that it would resume operations before October or November 2020.

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Rescue specialists? Lol.

Why go to court.

Why not strike in one big group. The real old fashioned way. You can even put your red t-shirt on. Drive them to their knees with mass action.

Get other unions to join in sympathy. The more the merrier.

[“Airlines around the world are failing, but with the correct vision, leadership, business and operating model, funding and implementation the new national carrier will be well positioned to take to the skies again,” the ministry read.]

There you are – nothing to it! Makes you wonder why they haven’t thought of it before…

well said! They have a point you know. All the SOEs were profitable under the previous regime. It is hard to believe today, but Eskom and SAA have even won international awards for financial efficiency and customer care! There was a time, about 25 years ago when municipalities and SOEs were in good financial standing.

So, they are correct when they say that SAA can be a successful business with the correct leadership, vision and operating model. Now the point is that a socialist organisation can’t implement the right operating model, or show the proper leadership from people with vision. The communalists do not have foresight, they have hindsight. They do not see what lies ahead, they are fixated on the past. They do not have the vision to implement strategies that address the competitive environment of tomorrow, try to implement strategies to “redress” the competitive environment of the past. They do not explore and find new business opportunities, they parasitise and shrink those they inherited.

A communalist system cannot provide the right leaders because communalism and good leadership are mutually exclusive. What kind of person is collectivist to begin with? What kind of understanding does that person have of the highly competitive international economic environment? What understanding and experience does that collectivist person have of the business environment and property rights? Now, it is common for people with a lack of understanding and lower levels of education to form a stronger political constituency because they do not question and they have no opinions of their own. It is much harder to build a political party among intelligent and educated individuals because they form their own opinions and they don’t need leaders to push ideas upon them or to coerce them to stand together.

It is the lower classes, the uneducated, the poorer classes, with nothing to lose, who easily stand together to elect leaders. How can we expect the uninformed, the uneducated, the poorer classes with their self-interests, to elect the right leaders that can implement the right strategies? Such a person does not exist in their midst. So, they elect the leader who claims to have the right attributes, who claims to have the education and the know-how and the best ideas and plans. They elect the person who lies convincingly because the voters do not know any better. They elect the most unscrupulous person, the most efficient lier, the one that promises them paybacks, handouts and bribes wrapped in “redress” and “restitution”.

This is why no socialist organisation in the world can provide services to consumers in a sustainable manner. Service delivery, SOEs and the economy implode because the wrong people elected the wrong leaders for the wrong reasons.

considering that the USSR was socialist, full blown communists, they were NOT stupid. the average russian (or soviet at least) received free government tertiary education up to masters level. The USSR had a competent, skilled, well educated workforce of space engineers, mechanical engineers, scientists, doctors etc. so why did the USSR fail ? not because of the same reason SA will fail surely not ! not due to education levels nor leadership.

Are you saying Stalin was not a good leader at that specific époque, providing the average russian with the leadership and command required to overcome the invasion?

on paper, theoretically, communism is the best system, out in the real world, in practice, it fails miserably.

Pitout, thank you. The different forms of collectivism in the shape of socialism, National Socialism (Nazi), communism and fascism are noble and “just” in theory only. As long as it is confined to a theoretical exercise by ethical intellectuals all is well and fine. The problem is, it requires the worst of sociopaths and the implementation of the utmost brutality to execute the strategies to reach those “noble” goals.

The problem arises in the execution and results of the strategies. Every socio-economic system incentivises and rewards certain specific behaviour patterns. In the same way that the free-market capitalist system develops the rule of law and property rights, and incentivises and rewards entrepreneurs for their service to the consumer, all collectivist systems incentivise and reward entrepreneurs for their exploitation of society through the mechanisms known as the Tragedy of the Commons. This also leads to the rule of man, or despotism, which is the opposite of the rule of law.

Because “accountability is shared by the collective” in collectivist societies, accountability and individualism are absent. In free-market societies, on the other hand, the system itself enforces accountability and individualism through the constant threat of bankruptcy and legal action.

The Germans are one of the most conscientious and educated nations on earth. It was not the intellectuals, the doctors, the artists, the bankers, the teachers or the engineers who joined the Nazis, the SS and the Gestapo. Those organisations filled their ranks from the lower, poorer and uneducated classes who were unemployable so to speak. Now, what kind of person rises to a leadership position in those kinds of organisations? The ethical intellectual with high moral values will refuse to do what needs to be done. It is the scum of that society, the most unscrupulous, the sociopath that rises through the ranks to fill leadership positions. It is the socialist system itself that inevitably breeds, and then promotes, and then worships a Hitler, Stalin, Pol Pot, Mao, Amin, Mugabe, Maduro and Mussolini. In a collectivist dispensation, it is impossible to prevent the lowest scum of society to become the ultimate leader, The Fuhrer.

Socialism is wonderful for as long as it is voluntary. The moment the legislature begins to enforce it, goodwill and justice are destroyed.

“I cannot possibly understand how fraternity can be legally enforced without liberty being legally destroyed.”- Frédéric Bastiat —

I don’t quite get it, help me here.

The prospect of air travel taking off in the near future is zero. That is a small thing to consider.

Now we have SAA with its great track record and we are taking this monster and we turn it around, just like that and it works.

This model should be required reading for all final year BCom, MBA etc students.

It has to work it took 26 years to perfect, like going to varsity and doing your BCom 6 times over, eventually you get it right.

One wonders what portion of FUBAR do the unions and the minister not understand? It is over. Our hearts are broken and we all are throwing ash over our heads while we wail to heaven. But it is koebaai for SAA.

“Choose what you want, but know what you’re choosing” (???)
The severance packages must be concluded and a date for closure and payment set. This is it for SAA. The unions chose what they wanted in fighting any form of SAA attempting options (not that they would have succeeded).

All that Covid has done in this case is speed up an inevitable failure of the Business Rescue efforts, ultimately saving further tax money down the drain.

TIME TO CLOSE THE DOORS!!!! GOODBYE SAA!!!!

I see defaults happening.

The SA citizen must take the unionsto Court for trying to steal the Public’s Tax monies- this is theft and therefore criminal. if a private Company is liquidated, they cannot go to the Taxman for help.

so, let us put together a court action against the Unions for Theft of taxpayers money.

We must ask outa or create a civil group. We def need a referendum on this new airline.

The only way the unholy alliance will wake up is for the entities to collapse completely as they are so financially illiterate that they don’t even know what they don’t know.

What they(the Unions) do know is that you and I are paying all their Salaries & their Socialist Comrade leaders need their votes , so will probably win again.
Anyone other than the obvious comrades who fly the “new” airline must be insane !

That is why it must collapse completely.

The ANCis breaking SA completely.

The problem with the rapacious ANC looting isn’t that everyone knows that they are doing it.

It is that they are so openly doing it and there are absolutely no consequences.

Why are South Africans still voting for this grotesque, turd-filled organisation?

The voters need to loose out completely to understand why they can never vote for a bunch of looters ever again.

But will they learn, my brother? Are they teachable?

There is/was such a lot of goodwill from the “previously advantaged” community, that is constantly trampled upon and ridiculed by those that need this goodwill the most. It leads me to believe that some people are born to die of famine and disease, as described by the mechanism of the Malthusian Trap. How else can we explain this phenomenon?

There normally are no rescue specialists, let alone in a time of Covid-19.

The ministry should expand on what it means by ‘the correct vision’ for the mooted new state airline and how it differs from the way the current one is run.

Let’s not forget that should SAA disappear overnight, the SA taxpayer, by virtue of the implicit guarantee of on-going state funding, remains on the hook for all the government guaranteed debt. Guesstimates suggest a figure of +/-R15.5bl in December 2019. This does not include the more recent loans from commercial banks and the DBSA loans of R2bl and R3.5bl respectively.

While government claims most of the outstanding guaranteed debt was appropriated for in this years budget to the tune of R16.4bl(think of welcome that would be right now), the fact that audited finacials were last produced for the 2016/2017 year, makes one question what else is sitting on the books.

If that is not enough, taxpayers can still look forward to picking up the tab for the cost of the liquidation. Pick a number. While we all hoped this would be a goodbye kick in the groin, comments in recent days suggest we get ready for Act 2.

no problem : Lets have a wealth tax !

More censorship- obviously the weekend censor is ANC affiliated. Shame on MW.

Does Pravin foresee that his “new” airline will bring out any audited financial statements as is required by the Finance Management Act that governs SOEs?

These very basic documents don’t exist within SAA, so one can’t help wondering…?

End of comments.

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