Neels Blom Writer at large

South African Airways (SAA) is embroiled in litigation that has brought the state-owned airline up against Brazilian law, following the carrier’s appeal against a finding by a labour court in the South American country.

The court ruling stems from the unfair dismissal of SAA’s South American head, Nelson de Oliveira, whom the airline accused of poor management and neglect involving inconsistencies and incongruencies in handling lost-baggage claims.

The litigation stems from action taken by SAA against De Oliviera after SAA Brazil had paid compensation of about R7.4m, excluding costs, to music group Os Travessos.

The group sued SAA in 2002 for losses it suffered after its equipment was stolen at OR Tambo International on a flight from São Paulo en route to performances in Luanda, Angola. When the group’s baggage claim was denied, it sued SAA, won the case and SAA Brazil was ordered to pay up.

The court order caused SAA to investigate the matter, after which it instituted a disciplinary hearing against De Oliviera. The airline claimed it had not been informed of problems with theft and loss of luggage and alleged De Oliviera had benefited financially from baggage claims. It then dismissed De Oliviera for "just cause".

De Oliviera, who had not been permitted legal counsel during his hearing, rejected the charges and took the matter to a regional labour court in São Paolo, which ruled in his favour.

The court found he had been erroneously regarded by SAA as the person responsible for the baggage-claim payouts in question and that the airline incorrectly stated it had not been advised of the baggage claims.

The facts were that, in the first instance, SAA was obliged to obey a court order under international law. The court found that the person responsible for handling baggage claims at São Paulo’s Guarulhos International Airport (of which Airports Company SA was a shareholder) was not subject to oversight by De Oliviera, but by SAA’s London-based Tim Atkinson, the head of international operations. The court said whatever irregularities there were in paying baggage claims could not be blamed on De Oliviera.

SAA lodged an appeal, but the court found SAA’s assertions did not stand up to scrutiny. The appeal court upheld the ruling that the amount paid to Os Travessos was agreed by SAA’s lawyers and that SAA failed to show sufficient grounds for De Oliviera’s dismissal.

It awarded R430,000 in punitive damages to De Oliviera for the false accusation of having misappropriated SAA’s money, bringing the total awarded to him to about R4m.

SAA appears not to have accepted the ruling as the end of the matter. A spokesman said the airline would not comment "at least at this stage, as the disputed issues are still before the courts".

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