SAA unions to meet government over future of airline

After refusing to meet with SAA’s business rescue practitioners on Monday, two of the airline’s biggest unions are expected to be part of a labour delegation due to meet public enterprises minister Pravin Gordhan.

Unions representing employees at SAA are expecting to meet the department of public enterprises and Gordhan on Tuesday on the future of the ailing state-owned airline. The meeting is meant to discuss how to avoid the liquidation of SAA; the effect of the business rescue restructuring; and funding.

This follows a meeting with some of the unions and the business rescue practitioners on Monday after practitioners Les Matuson and Siviwe Dongwana had sent them a draft proposal on the structured winding down of the airline.

However, the National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Saaca), have refused to participate. They are expected to be part of the team to meet Gordhan. The two unions make up the majority at SAA and if there is not a 51% consensus on the practitioners’ severance proposal, it could stall the process.

The draft proposal, sent to all unions on Friday, set out the process for the termination of all employee contracts at the end of April, with severance packages only to be provided if funds exist at the end of the winding down of the company. Unions have until Tuesday to submit their own proposal to the practitioners.

Saaca president Zazi Nsibanyoni-Mugambi said her union was not participating in the section 189 process because it believes there is no rationale behind it. The practitioners should already have had a plan in place for the airline but did not. The union, with Numsa, has also said it is not interested in the proposal put forward by the practitioners.

Nsibanyoni-Mugambi said Saaca will participate in the meeting with Gordhan and the department on Tuesday. “The department of public enterprises has indicated they are interested in talking,” she said.

The National Transport Movement (NTM) did attend the meeting with the practitioners on Monday and submitted its proposed agreement. Deputy president Mashudu Raphetha said the union will also attend the meeting with the Gordhan and the department.

The airline, which was placed in business rescue in December, is insolvent and its liabilities far outweigh its assets. The government last week informed the SAA practitioners that it is unable to provide the airline with further funding. It also refused its request to raise funding in foreign capital markets.

SAA itself is unable to raise further funding in domestic markets and owes huge debt to a consortium of local banks.

A cabinet meeting on Monday is expected to receive a presentation from Gordhan on SAA. After the reports of the draft proposal put forward by the business rescue practitioners, Gordhan insisted in a statement that there would not be a wholesale retrenchment of staff at the airline.

quintalg@businesslive.co.za