Court halts SAA retrenchments, calling process unfair

The Labour Court has ruled in favour of unions, halting SAA’s business rescue practitioners’ (BRP) bid to retrench workers.

The failed airline’s administrators have been battling to keep the business afloat since taking over in December 2019 – however its plans have been reliant on government, as the sole shareholder, for financial support.

Following the major setbacks to the economy due to the coronavirus pandemic – which included the grounding of all flights and closing of the country’s borders – government said it would not provide any more funding to SAA.

This left the administrators with only two options, they said – to either wind down the business, with employees accepting retrenchment packages, or to go into liquidation, where retrenchment payouts could not be guaranteed.

Deadlines to accept retrenchment packages have shifted over the last few weeks, with the BRPs giving workers until today to sign agreements.

While the BRPs have been in consultation with unions since March about retrenchments, two unions – the National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) – argued that the process should wait until a business rescue plan had been presented, calling the move “premature”.

On Friday, the Labour Court agreed, saying that the layoff notices were “procedurally unfair” without the rescue plan having been published.

NUMSA and SACCA welcomed the ruling, while the department and the SAA business rescue practitioners said they were considering the judgement, with the former specifically looking at what implications it has for future plans.

You can read the full judgement below:

J 424-20 NUMSA and Another … by BusinessTech on Scribd

Read: SAA says government is exploring funding options

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Court halts SAA retrenchments, calling process unfair