BUSINESS MAVERICK

Labour deeply divided on severance packages for SAA workers

By Ray Mahlaka 2 July 2020

(Photo: Foto24 / Gallo Images / Getty Images)

Four trade unions, which, in a coalition, represent a minority of SAA workers, have expressed an interest in being retrenched and receiving voluntary severance packages. But three other unions, which represent a higher number of SAA workers, are opposed to the severance packages.

There are deep divisions in SA’s trade union movement about whether a majority of SAA’s 4,700 workers should agree to be retrenched and accept voluntary severance packages.

The eight recognised trade unions at SAA also hold sharp differences in opinion about how the troubled state-owned airline should be rescued.  SAA is in the throes of a business rescue process, which has been running for nearly seven months. Business rescue is an attempt to rehabilitate companies that are financially distressed by restructuring their affairs.

The divisions among trade unions came to a head on Thursday 2 July, when the Department of Public Enterprises – the sole shareholder of SAA – said four trade unions and staff representatives had approached it to indicate that they were ready to sign severance packages, which are part of the SAA business rescue process.

The SAA rescue practitioners, Siviwe Dongwana and Les Matuson, have published a final business rescue plan that proposed launching a restructured airline by January 2021 and cutting 3,700 jobs to save costs. To do this, the pair want to set aside R2.2-billion to fund severance packages, which include, among other things, one week’s pay for every year worked at SAA, one-month notice pay, compensation for accumulated leave, and a 13th cheque to affected workers.

Workers accepting or rejecting packages

The Department of Public Enterprises didn’t specify the number of SAA workers willing to either accept or reject severance packages. According to the department, the four trade unions at SAA that are ready to sign severance packages on behalf of their members are the National Transport Movement (NTM), the South African Transport and Allied Workers Union (Satawu), the Aviation Union of Southern Africa, and Solidarity.

In coalition, the four unions represent a minority of SAA’s 4,700-strong workforce, implying that there is no broader consensus on job cuts at the airline. But unions including the National Union of Metalworkers of South Africa (Numsa), the SA Cabin Crew Association (Sacca), and the SAA Pilots’ Association (Saapa), collectively represent a higher number of SAA workers (58% of the airline’s workforce). These unions have rejected the severance packages – implying that a majority of SAA workers are against the pay packages.

But this is not a dead cert. Unions don’t usually subject labour issues to a ballot among their members, making it difficult to determine a demonstrable consensus or disagreement. Even if workers express their opposition to severance packages to their union representatives, there’s no guarantee that they’ll follow through with the opposition in discussions with their employer. At the end of the day, a severance package offer is only agreed to between each worker and their employer.

The next business rescue meeting is on 14 July, when SAA creditors will vote to either approve or reject the implementation of the rescue plan.  Unions that represent a majority of SAA workers (Numsa, Sacca, and Saapa) are against the rescue plan in its current form, saying it disproportionately targets labour by cutting jobs. To improve SAA’s financial position and reduce the need for job cuts, the unions have proposed that SAA immediately resume domestic flights – as its competitors Comair and FlySafair have done after the hard Covid-19 lockdown was recently lifted by the government.

Other unions including NTM and Satawu support the implementation of the rescue plan, saying it offers a better deal to SAA workers than a possible liquidation scenario, which implies the death of the airline and loss of all jobs. BM/DM

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