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Unions reject plan to wind down SAA and offer 49% pay cut for two months

The majority of unions representing SAA workers have rejected the business rescue practitioners’ (BRPs’) proposal to wind down the airline.

“We‚ as the major unions at SAA‚ are committed to working actively and constructively with minister [Pravin] Gordhan in an effort to rescue our national carrier. And we are prepared to make the necessary sacrifices to do so. However‚ it appears as if no sacrifice will be enough to satisfy those who are intent on destroying SAA for whatever sinister reasons‚” the unions said.

The unions‚ including the SAA Pilots’ Association (Saapa)‚ the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca)‚ said their members had offered to cut their salaries by up to 49% for two months.

“However‚ inexplicably‚ the business rescue practitioners have rejected our offer of a salary cut and‚ in doing so‚ have reneged on their previous commitment to accept it. This pay cut – to the tune of R82m – was designed to buy enough time to restructure‚ right size and reform SAA.

“We have completely lost faith in the business rescue practitioners. It is self-evident that they never intended to rescue SAA and‚ as such‚ six months later‚ there is no business rescue plan. Instead‚ they unfairly attempted to dismiss all employees and wind down SAA‚ which amounts to no more than asset stripping‚” the unions said.

They said they have noted with “dismay” that during their presentation to the standing committee on public accounts (Scopa) on Friday‚ the BRPs advised the winding down of SAA.

“Not only is this rejected as not constituting business rescue‚ but that statement directly contradicts their undertakings given in the memorandum of understanding they had signed with minister Gordhan on May 12 2020.

“The MOU states that they would ‘actively co-operate (with the department of public enterprises) in the development of a business rescue plan for SAA’‚ with the objective of creating a ‘restructured‚ efficient and sustainable airline‚'” the unions said.

According to the unions‚ employees were under threat of not receiving salaries at all‚ as a result of the BRPs’ rejection of the unions’ proposal.

“This is especially difficult to swallow when one considers that the BRPs‚ their consultants and advisers have been paid some R200m in fees since their appointment.”

In the past couple of days‚ the business rescue practitioners reportedly proceeded to further deplete SAA’s cash reserves by withdrawing another R2.5m each as fees for themselves‚ the unions alleged.

“A further R9m has been paid out to consultants (despite the fact that there is no semblance of a business rescue plan). We believe that all this amounts to [is] nothing but the looting of SAA as a national asset.”

The unions have called for:

– a forensic audit and PFMA investigation of all expenditure since the appointment of the BRPs;

– an immediate cessation of the BRPs’ legal challenges and minimisation of consulting and legal fees; and

– if they are not willing to categorically support the vision of a new national airline‚ the resignation of the BRPs and withdrawal of their legal advisers.

“We are sensitive to the pressure on the public purse‚ especially during this time of Covid-19. Our plan is therefore prudent and designed to make SAA commercially viable and financially self-sufficient.

“It will be disastrous for SA’s economic recovery if we are unable to provide vital airlift and connectivity when Africa and the world emerge from the Covid-19 crisis‚” the unions said.

Source: TMG Digital.