Court reserves judgment in SAA unions appeal for backpay salaries

The Labour Appeal Court has reserved judgment after hearing arguments on behalf of the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) to have South African Airways (SAA) settlement agreement declared unlawful or unfair.

If Numsa and Sacca’s application is granted, it could throw a spanner in the works of the airline’s rescue process, the Public Enterprises Department (DPE) argued, adding that the airline could also be held liable for the payment of salaries out of the business rescue post-commencement financing.

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Read: Court case against SAA may jeopardise business rescue

Government apposes unions

The DPE minister,  Pravin Gordon wants to be joined as a respondent in the case.

The airline has been in business rescue since December 2019 and has not been operating since April. Prior to the signing of the settlement agreement, workers at the airline had been without pay since April last year except for the UIF’s Covid-19 Temporary Employer-Employee Relief Scheme (Ters).

Advocate Andrew Redding, for the rescue practitioners, argued on Monday that the funding provided to the airline in November by the government was provided with strict conditions, including that workers would agree to a compromise which would see them forego some funds owed to them.

Minnar Niehaus, the lawyer for the trade unions argued that the DPE, as the shareholder cannot unilaterally decide to change the conditions of the airlines business rescue plan which was agreed to by creditors in July last year.

“The minister is trying to change the game…[he] is trying to intervene in this application in order to get this court to sanction [him] from deviating from an approved business rescue plan without going back to a creditors meeting,” Niehaus said.

He added that Gordhan’s argument that the union’s application should be dismissed because it would be detrimental to the airline’s rescue process is “inappropriate.” Niehaus said the SAA creditors and not the courts should decide on whether or not the union’s application would cause the airline’s rescue process to fail or not.

“It’s inappropriate to try to influence this process by presenting to this court that should this court grant relief and apply the law, that will be the end of a national asset.”

Wanting backdated payments 

The two unions also approached the court to compel the SAA rescue practitioners, Siviwe Dongwnana and Les Matuson and the DPE to pay their members a lump sum comprising an agreed-to 5.9 % increase backdated to April 2020 as well as an equivalent pro-rata contribution towards a 13th cheque.

Numsa and Sacca want these payments to be made within seven days.

Read: SAA unions seek order for wage payments to be made within seven days

In December, more than 81% of SAA employees, including some Numsa and Sacca members signed the settlement agreement with the airline after R3.5 billion of the required R10.5 billion was made available to the rescue practitioners.

The parties that accepted the deal in December include the South African Transport and Allied Workers Union (Satawu), the National Transport Movement (NTM), Solidarity and the Aviation Union of SA as well as three SAA worker formations (covering non-unionised management and non-management as well as wider management)

In response to Niehaus, Redding said the fact the settlement offer was made to unions despite it not being foreshadowed in the business rescue plan does not mean that the conditions of the rescue plan have been breached.

Instead, the settlement offer was made to unions by the government in a bid to reduce its liabilities, which was agreed to by the rescue practitioners.

Source: moneyweb.co.za