SAA and labour to resume talks over retrenchments

With flights grounded in SA and across the globe, the stakes to conclude the rescue plan have increased.
SAA says it still has money in the bank. Image: Shutterstock

Business rescue practitioners for South African Airways (SAA) and labour will resume consultations on retrenchments on Wednesday but a series of emails seen by Moneyweb reveal deliberations to get to this point got off to a bumpy start as parties work to reach consensus while the country is under a 21-day lockdown.

There’s been some confusion as to whether the Commission for Conciliation, Mediation and Arbitration’s (CCMA) senior commissioner tasked with facilitating the meetings would continue to do so during the national lockdown period.

At the same time business rescue practitioners (BRPs) Les Matuson and Siviwe Dongwana are facing resistance from the two largest unions at SAA, the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca), who have not agreed to continue with discussions over video-conferencing and have accused the BRPs of not engaging in good faith.

The BRPs received an extension to submit their final business rescue plan by May 29, instead of March 31, after the airline was forced to ground all of its international and local flights due to the Covid-19 pandemic that has led to governments across the globe instituting travel restrictions in a bid to contain the spread of the virus.

Options 

Before then another crucial deadline is May 8, where BRPs will need to conclude the 60-day consultation process as provisioned in the Labour Relations Act (LRA). This will ensure that they are able to give notices to employees whose contracts will be terminated from May 10.

Over 4 000 workers will be affected by this process, close to half of SAA’s workforce.

Read: SAA moves to cut almost half its workforce

With flights grounded and their accompanying ticket sales gone, other possible scenarios which the BRPs have urgently presented to SAA’s labour representatives is an agreement to implement a rotational retrenchment scheme where “non-key employees” will work on a part-time basis and won’t immediately be paid their full salaries.

The second alternative involves speeding up the consultations with the aim of concluding by March 31, a deadline which has now passed.

It’s unclear whether new proposals have been put on the table but the message still stands, the process needs to be finalised as soon as possible for the airline to avoid a possible liquidation and the loss of all jobs.

Given the restrictions of the lockdown on movement and the gathering of people who do not provide essential services, SAA has provided video-conferencing equipment to all parties to facilitate the consultations.

In an email, CCMA senior commissioner Grahame Mathewson informed the BRPs that he would not be available to facilitate the process because talks held during the lockdown period may potentially be inconsistent with the criteria needed for the meeting to be held under exceptional circumstances.

The CCMA did a sharp turnaround following a letter by the BRPs which stated that it was “regrettable” that the body had chosen to withdraw from the process which was “contrary to its statutory obligations” emanating from the LRA, and which was inconsiderate of the number of jobs at stake and impacted the existence of the airline.

While Matuson and Dongwana’s calls for the CCMA to “reconsider” its decision worked, there were issues outstanding which the CCMA highlighted in an email. Firstly, Numsa and Sacca had not agreed to participate in discussions during the lockdown period. Secondly, the unions had accused the BRPs of not providing them with all the information needed to “participate meaningfully in the discussions”.

SAA has eight labour unions including the South African Airways Pilots’ Association, the South African Transport and Allied Workers Union, the National Transport Movement and Solidarity which represent the vast majority of the workers at the airline who have agreed to continue with consultations. Time is constrained and delays could possibly impact the number of job losses at the airline.

Convening senior commissioner at the CCMA Shawn Christiansen said the dispute resolution body would facilitate the retrenchment proceedings only if all parties agreed to take part and that unions were provided with the information they had requested.

We want to talk 

Sacca deputy president Advocate Christopher Shabangu told Moneyweb that the unions were not opposed to participating in the consultations via video-conference during the lockdown but that they would not be involved in a “box-ticking exercise” for the sake of it.

“The issue is the information that has to come from the company and the suspicion that the company is trying to bulldoze this process just to tick a box,” said Shabangu. “Our biggest fear is it seems like the goal is to please the creditors rather than to involve labour.”

He explained that Numsa and Sacca has requested the plan relating to the design of the organisation not only indicating where the BRPs wanted to reduce employee numbers but also providing the rationale for those cuts.

“You cannot come as BRPs and tell us we want to cut so many jobs and when we ask you why you say the company does not have money and cannot continue to do business this way, that’s not a viable reason,” said Shabangu.

“We cannot take this thing lightly it’s a lot of people’s jobs that are at stake”.

Shabangu said if the BRPs continued with the consultations without Numsa and Sacca it would be “quite reckless and their actions would be at most dubious”.

‘No need to withhold information’

However, rescue practitioner Dongwana assuaged any accusation that SAA was deliberately withholding information from unions.

In fact, the primary item that will form part of Wednesday’s meeting is clarification on what information is required by labour in a process that will be adjudicated by the commissioner of the CCMA.

“There’s no need on our part to withhold any information, the only proviso we ask is that where there is information that is sensitive from a competition point of view, [that] people sign a non-disclosure agreement because we remain a company in business,” said Dongwana.

On accusations that the BRPs were merely trying to tick boxes without engaging labour meaningfully he said they could not be sustained as the rights of workers were enshrined in the LRA and could not be changed.

“You can’t undermine that, it would be a showing of failure,” said Dongwana. “It would be naive of the BRPs to do something along those lines and it would not bode well for a successful rescue because you need the support of all affected parties.”

“There are no shortcuts in this thing, you must work with labour with honesty and deal with them truthfully,” said Dongwana.

 ‘We still have money’

The BRPs had stressed the need to reach a resolution urgently as the R3.5 billion in funding that was provided by the government would be depleted earlier than anticipated since the airline was not making ticket sales.

Dongwana said the airline had identified opportunities in transporting cargo and providing charter flights for foreigners stuck in South Africa during the lockdown period who need to be repatriated to their countries.

“So for now, we are fine,” said Dongwana, adding that the airline had paid its salaries for March and would be mindful of how it spends money.

Has the post-commencement funding been depleted? “No, no, no,” said Dongwana “we are still continuing.”

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Whats there to talk about?

The whole thing needs to be shut down as quick as possible.

This government will never ever have the money again to bail anything out.

The IMF wont allow the reckless behaviour to continue. The quicker the government gets this into there heads the better.

The downgrade & soon-to-be IMF big daddy are a blessing. Why? They will mostly take the financial reins from the stone age kleptomaniacs

“the company does not have money and cannot continue to do business this way, that’s not a viable reason,”

Wow!! Pray, tell Mr. Shabangu, what would be a viable reason?

Another ANC farce looting Rbillions of taxpayers money.

Course not. Nor is no money in the bank, trading while insolvent, suppliers won’t supply us, customers aren’t flying…

There’s absolutely no reason to cut labour

No doubt another bailout will be needed to pay the April salaries ….. ditto and yet another bailout to pay the May salaries …. and so it goes on.
Best put SAA out of its misery and close it down tomorrow.
Its continued presence has contributed to our downgrade.
Surely the cadres have had enough of this this feeding trough?

Close it down you stupid fools!!!
“Over 4 000 workers will be affected by this process, close to half of SAA’s workforce.”So about 8000 work there?
What the hell are they doing the whole day?

They should bring back conscription.
It teaches people the necessity of sacrificing oneself for the benefit of all and instills a sense of pride for the nation.

I reckon these labour unionists should be the first to get their letters. Moodys just sited “rigid labour environment” as a impactor of their decision. You don’t get more rigid then this.

The time has come to work for the greater good of all, not just selfish personal gain that so many have become so notorious for.

Just hate how the unions hold SA hostage whenever they want something.

Eskom workers- We are going to shut SA down
Gov workers – No basic services!
SAA – Shut up and give me money or else!

Deep rooted culture conflicting with commercialism, it ain’t going to work!

Government could fund a forensic investigation into what money has been siphoned off over the years and ring fence this for payments to staff. The company is DEAD and should not be “brought back to life”, it is reckless and stupid!

Time to end the SOE and Government entitlements scheme. Paid a fortune to run the place into the ground with the tax-payer in for the bill. No ways, not anymore.

O K we are not done here yet?? Hasn’t this organization BLED the working tax payers ENOUGH?????????????????? DAH you are saving jobs at the cost of the country. C’ mon you on the job trainee’s get it together. Ever made a touch choice yet????????????

End of comments.

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