Government, unions agree to retain 1 000 more employees in new SAA

Numsa and Sacca say they won’t discourage members from accepting the VSPs.
It's not guaranteed that upskilled workers will have a place at the new airline. Image: Shuttershock

Government and unions have reached an agreement to retain an additional 1 000 employees at South African Airways (SAA) – doubling the number of workers who will not be retrenched to kickstart the new airline. 

Instead of being retrenched as part of the rescue plans for the restructured airline, these workers will be placed on temporary suspension through the Department of Labour’s training lay-off scheme, otherwise known as the Temporary Employee Relief Scheme (Ters), not to be confused with the Covid-19 Ters. 

It provides an alternative to retrenchments, while giving employees an opportunity to upskill and allowing a company to offload a large number of its remuneration obligations through economic recessions. 

This means only 2 700 workers will be laid off if the final SAA rescue plan is accepted by creditors. They would receive voluntary severance packages which, among others, will include one week of pay for every year of completed service, one-month notice pay, accumulated leave paid out and a 13th Cheque. 

Unions on board

The details of this new agreement were detailed in the revised business rescue plan by practitioners Les Matuson and Siviwe Dongwana and a statement by the Department of Public Enterprises (DPE) on Tuesday evening.

The DPE said all unions and the representatives of non-unionised managers and ground staff, with the exception of the SAA Pilot’s Association (Saapa), had accepted the packages. 

This is a significant milestone because one of the conditions for the rescue plan to be passed is the buy-in from labour.

While the initial rescue plan did not place a deadline on when employees would have to accept severance packages, the amended plan states that an agreement on the revised terms would have to be in place by July 17.

Failure to reach an agreement means the paused section 189 process will be continued with or a new 189 process is initiated by July 22. 

In addition to employee buy-in, the BRPs also want approval that the government will support the plan and a written commitment to fund the R10.4 billion restructure of the airline by the same deadline.

Should these conditions, among others, not be met on July 22, “the business rescue plan will be deemed unimplementable and a meeting of creditors will be convened on July 24, 2020 for creditors to consider amending the business rescue plan,” Matuson and Dongwana say.

No employee will receive a voluntary severance package (VSP) of less than R200 000. The total breakdown of the VSP packages, which will amount to a collective R2.2 billion, is unchanged from the final offer the DPE had provided to unions on June 23, where 3 700 employees were originally going to be retrenched.

Source: DPE

The new terms come after the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) together with Saapa won their push to postpone the June 25 creditor’s meeting, on the basis that the final rescue plan was not only defective in law but that it also unfairly targeted employees.

The creditors will now vote to pass or reject the amended plan on July 14.

In an internal document dated July 6 and seen by Moneyweb, where Numsa and Sacca inform workers of the new arrangement to retain 1 000 employees, the unions say they will not discourage members from accepting the VSPs. 

The DPE said Saapa’s position on the packages “remained unclear” as the union had not opposed the packages but indicated that it would “embark on a parallel process through which they want to consult the BRPs for SAA about the severance packages”. 

Training lay-off scheme

The training-lay off scheme will run for a period of 12 months and the 1 000 employees who will form part of this programme will not receive a salary during this period. 

According to the Commission for Conciliation, Mediation and Arbitration (CCMA) website workers on the scheme are entitled to a training allowance, which is calculated at a maximum of R12 478 per month as per the Unemployment Insurance Fund’s (UIF) thresholds. 

Employers are expected to pay for workers’ basic security package, of which the BRPs said SAA would pay a maximum of R4 650 towards each employee’s pension, UIF and company medical aid per month. 

“The company will take reasonable steps to assist such employees to secure alternative payment through UIF,” said the BRPs.

Read: National Treasury says ‘no further action’ to bail out SAA

However, it’s not guaranteed that employees will be absorbed back into the airline at the end of the 12-month training period. According to the DPE, the employees will be first in line for any opportunities that emerge in the new airline so long as they have the required skills and expertise. 

“If an employee does not secure a position within 12 months, the employee’s services will be terminated and such an employee will receive a severance package. 

“SAA reserves the right to withdraw the training lay-off offer for the sake of retaining critical skills,” said the department.

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Oh yes, let’s spend all this money we (don’t) have on the nations perpetual liability, whilst successful companies fail. So damn infuriating. JUST SHUT IT DOWN!!

The simple fact is that with all its previous employees, SAA ended up losing billions year after year. So now, with many of the same employees still retained, just how is it going to be successful – i.e. profitable in future??? Dumb and dumber.

The other problem is that the productive and sought after employees are probably busy organising themselves alternative employment. The deadwood will remain.

Government are still trying to refloat SAA without stumping up any money.

Of course the unions wouldn’t want their pensions on the line – heck, they know a bad investment when they see it.

And I would imagine that Pravin would not be the slightest interested in investing his personal savings into the new airline either.

So it all becomes possible with other people’s money. How wonderful

“Socialism only works in two places: Heaven where they don’t need it and hell where they already have it.” – President Ronald Reagan

The unions are doing more flip-flops than Julius Malema. It is obvious they are just trying to delay the inevitable.

This must become required reading for all business practitioners.

If your business is in trouble you must increase your variable cost.

Revolutionary!!!

This is a farce. We have a pretence of a government, a make-believe parliament and fake leaders. These collectivists do not believe in a democracy, they merely pretend to uphold the constitution. In reality, they act as if they are in control of a one-party state. They see themselves as the commanders in a command economy. South Africa is a chieftainship, the most backward of all forms of government. The ANC took us back the feudalism and the exploitation that goes with it.

The ANC is a loose affiliation of looters, each with is personal agenda, put in control of the national assets. The vagrants have found the keys to the safe and the wine cellar. Now we see the results.

The government pretends to negotiate with the unions, but they are members of the same Tripartite Alliance, which forms the government. So, in effect, the government is negotiating with the government. This is the definition of schizophrenia.

What kind of negotiation is this when you are talking to yourself, to convince yourself to listen to yourself because that is the best solution for yourself? It is amazing how much time they can spend talking to themselves, and how long it takes them to convince themselves to listen to themselves!

For them, because they lack substance, it is all about appearances. They pretend to act in our best interests and we pretend to respect them.

How much are the unions chipping in ? Nothing ? No skin in the game but big say ? Insanity. Hand the airline over to the unions. This will sort it out in no time.

This is a real “smoke and mirrors” scam, a real ongoing circus act designed to fool all and sundry by both the DPE and the unions.
What will happen this time next year when the New SAA is grounded once again? A new BRP exercise?

I still can’t work out how they get to their “average severance package per employee” by their above calculations. Maybe my maths is way off

Me too!

So say the person had 8 year service. So, that is two months pay. Then they get a notice month pay, then they get a 13th cheque. So 4 months salary plus accrued leave.

For cabin crew the average is R360k. So their monthly salary was how much???? No wonder the airline was in trouble. Even if they had 24 years service = 8 months : R45k per month!!. If the average is 360 imagine what some must be getting?

As they say “Stupid is what Stupid does”

Extra 1000! I hope everyone will also agree on 50% salary cut to accommodate this extra 1000 unbudgeted not on the business plan personel increase. A no demand for increase or bonuses until the the company is profitable for a certain period should also be part of the agreement otherwise this is again going to be taxpayer’s problem.

That’s exactly the point; unbudgeted at SAA, so rope in another government department – labour and the SETAs to cover the costs!
What’s more; the same SETAs use levies of private sector employers but in this case, it’s not the private sector retrenched staff benefitting, it’s damn government people.
This really calls for a tax revolt!

Overstaffed before they have even got off the the ground.
But at least the unions are on board because they add so much value.

stupid fools.close it down.beyond brain dead

That package seems absurd – look at the amounts! None of the people losing their jobs and businesses due to covid regulations will see a fraction of this.

The very pampered SAA staff…
Is this Retraining Scheme open to private sector workers who paid UIF? And if not, WHY not?

Waiting with baited breath to see if Treasury and Tito renege on undertakings to South Africa that NO more tax money will be pumped into SAA!
The Labour Depart will throw up to R144 000 x 1000 into this crazy scheme and that’s not even counting the R200000 retrenchment package afterwards!
Meanwhile, the grant to provide poor households with basic electricity was STOPPED by national government – as hundreds of other service delivery functions are getting cut right now!
The labour depart and SETAs must first show what they’re doing to retrain private sector staff BEFORE worrying about SAA! It’s all tax payers’ money!

End of comments.

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