Gordhan: SAA employees don’t have to sign retrenchment offer… yet

The Department of Public Enterprises and South African Airway’s (SAA’s) business rescue practitioners (BRPs) have agreed to give labour an extension to accepting severance packages to May 1. 

Creditors and unions were told by the BRPs Les Matuson and Siviwe Dongwana that a structured winding down of the business was dependent on the conclusion of retrenchments by April 24, failing which, the company would go into liquidation. 

Unions and non-unionised employees where presented with a termination of an employment agreement on April 17, after the state refused to extend anymore more funding or provide guarantees against foreign lending in order to sustain the rescue process. 

With no revenue from flights due to the lockdown,  the BRPs said the company did not have enough money to cover a significant portion of due salaries beyond April. Matuson and Dongwana said the only way to salvage parts of the business and develop and publish a new business plan was dependent on retrenchments being concluded. 

Severance packages would be funded from the sale of select assets which would take six or 24 months. 

Read: SAA cannot pay salaries beyond April

Read: Government meets with SAA unions, and there’s still no money for the airline

The BRPs and employees moved the initial deadline to 12pm on Saturday. 

A letter sent to organised labour by Minister Pravin Gordhan on April 25 states that a moratorium has been placed the retrenchment of employees and employees are no longer obliged to sign the collective agreement. 

SAA 2.0

The letter made no mention of funding but the idea of a new revitalised airline coming out of the rescue process is gaining momentum. 

Governments commitment to this was first mentioned after an inter-ministerial committee on SAA made up of chair Gordhan, Labour Minister Thulas Nxesi and Tourism Minister Mmamoloko Kubayi-Ngubane met with labour to talk about the mass retrenchments proposed at SAA. 

Read: Unions respond to SAA severance package offer

On Friday the idea resurfaced during Finance Minister Tito Mboweni’s briefing on government’s R500 billion support package for an economy ravaged by Covid-19. 

Speaking on what the future of the economy will look like Mboweni supported this notion of “starting a new airline altogether from the ashes of [SAA]”. 

Gordhan is expected to release a statement on talks that took place with unions.

This document explains how employee claims would be treated under a structured-down process or liquidation:

SAA_Ranking of Employee Claims_BR vs Liquidation_2020 04 23

This is a developing story