SAA unions call for management pay cuts, business rescue audit | Fin24
 
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SAA unions call for management pay cuts, business rescue audit

May 18 2020 16:49
Carin Smith

Three unions representing more than 60% of employees at South African Airways are calling for an investigation into the work done by the troubled airline's business rescue practitioners since they started in December last year.

The National Union of Metal Workers of South Africa (Numsa), the SA Cabin Crew Association (Sacca) and the SAA Pilots Association (Saapa) have also called for the practitioners not to continue with an appeal against a recent Labour Court ruling that their retrenchment process was unfair. They also want the practitioners to minimise the millions of rands the unions claim are being spent on consultants and legal services.

The 86-year old airline hasn't made a profit in about eight years and has cost the government almost R30 billion in bailouts over the past decade. At the end of 2019 the state agreed to place it into business rescue in the wake of a crippling eight day pay strike by Numsa that cost the airline about R416 million.

Numsa, Sacca and Saapa, in a joint statement, called on SAA's executives and senior management to offer to reduce their salaries in a bid to try and save the airline, in the light of what the unions refer to as "years of mismanagement".

Some of the major unions have already offered that their members' salaries be cut by up to 49% for two months on a sliding scale in an effort to "buy time" to restructure or "right size" the airline. The three unions claim such a pay cuts would save about R82 million, but have been rejected by the BRPs.

The National Transport Movement (NTM), one of the other unions represented at SAA, expressed its concern with what it calls "the evident disconnect" between the Pravin Gordhan-led Department of Public Enterprise and the practitioners on the matter of the airline.

NTM president Mashudu Raphetha called on the BRPs to publish their business rescue plan as a matter of urgency at the end of May, and for all parties to work together "to avert a calamity".

The DPE and the practitioners were not able to provide immediate comment.

UPDATE: Even if pay cuts, as proposed by the unions, were to be introduced, SAA does not have sufficient funds available to pay salaries to all of its employees. This is mainly due to the devastating impact of the Covid-19 flight bans. The employees and managers still required to work to deliver necessary services, will be paid for the hours worked at the end of May.

On 30 April, the BRPs told all SAA employees that SAA does not have sufficient funds available to continue continue paying salaries. While the BRPs had initially envisaged that employees would take annual leave during the lockdown, thereby earning their remuneration, this was no longer possible, given the financial stress of the company.

As a result and due to the Covid-19 lockdown, all SAA employees were placed on an unpaid absence with effect from Friday 1 May 2020, irrespective of positive leave balances. For South African-based employees, the COVID-19 UIF TERS payments will be applied for during this period.

saa  |  pravin gordhan  |  coronavirus  |  business rescue  |  airlines
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