Unions accept R2.2bn severance packages to rescue SAA

July 8, 2020

JOHANNESBURG - South African Airways (SAA) multi-billion rand business rescue plan looks set to be voted in favour of by the majority of creditors next week after the airline’s workers agreed to accept the proposed voluntary severance packages (VSPs).

The VSPs include one week calculated per year of completed service, one-month notice pay, accumulated leave paid out, a 13th cheque and a top-up of severance packages calculated on a back-dated 5.9 percent wage increase.

The average sewerage package per employee would see SAA’s cabin crew receiving R352 588 per employee, pilots receiving more than R1.9 million, ground and support staff also receiving between R351 000 to more than R477 000, depending on their duration of service.

The Department of Public Enterprises (DPE) last night said that labour unions, and representatives of non-unionised managers and ground staff, had agreed to accept the VSPs for employees who will be retrenched at SAA.

According to the DPE, even objecting labour unions National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Sacca) said they had no objection to the government offering to individual employees VSPs.

The SAA Pilots Association (Saapa), however, is seeking to embark on a parallel process to consult the SAA business rescue practitioners even though it did not oppose the outcome of the unions meeting.

The DPE said it appreciated the level of commitment and cooperation from these unions and staff representatives to accept fair and reasonable severance packages in the interest of their members.

“In terms of today’s agreement, 1 000 SAA employees will be retained,” it said.

“Around 2 700 SAA employees will be retrenched and will be able access the VSPs as soon as a business rescue plan for SAA is endorsed by a creditors vote.”

SAA rescuers Les Matuson and Siviwe Dongwana postponed tabling a revised business rescue plan yesterday in light of the labour consultative forum meeting convened by the unions after Numsa, Sacca and Saapa requested some amendments.

SAA’s business rescue plan proposes that the government injects a R27 billion bailout and 75 percent of the voting interests would be required to carry the vote.

The government has offered R2.2bn for VSPs to 3 700 SAA workers which would be accessible as soon as a business rescue plan for SAA is endorsed by a creditors vote.

Numsa spokesperson Phakamile Hlubi-Majola confirmed today that the unions will not stand in the way of workers if they wished to accept the packages.

“We said we will not stop individuals from accepting VSPs if they want to,” Hlubi-Majola.


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