Gordhan steps into SAA crisis, announces a stop to retrenchments

Public Enterprises Minister Pravin Gordhan has delayed the retrenchment process at SAA, which is set to either be wound up or liquidated. 

Gordhan met unions and representatives of non-unionised workers this week to discuss issues pertaining to the cash-strapped airline. He has now issued a letter to unions advising them that the April 24 deadline given by SAA’s business rescue practitioners for all workers to sign a settlement agreement with the state-owned airline would be extended to May 1. 

Discussions with Gordhan have progressed to the point that there is agreement on working towards the creation of a new airline in a bid to save jobs and bolster South Africa’s aviation industry. 

READ MORE: Without a clear plan, SAA stood no chance

The minister is expected to make an announcement on the progress of discussions with labour, as well as shed light on the work towards a new airline. 

A source who has been participating in the talks said the parties agreed that, ideally, the airline should be well on its way towards being launched by the time the aviation industry kicks up again.

The letter, dated April 25, and signed by Gordhan, stated that SAA’s government shareholder representative, the department of public enterprises,had agreed to a moratorium on the signing of retrenchment agreements. “As a result the employees are not obliged to sign the collective agreement for the retrenchments for the period of the moratorium,” he also said. 

SAA employees have been urged by the business rescue practitioners, Les Matuson and Siviwe Dongwana, to sign the agreement by Friday (April 24), which would place them ahead of creditors in the claimants line should SAA be liquidated. On Friday, they extended the deadline to sign by a day (to Saturday, April 25) because labour was in talks all week with the government and the rescue practitioners to try to chart a way forward for the airline. 

On Thursday Matuson and Dongwana issued a notice to the affected parties stating that because of the effect of Covid-19 the airline was no longer viable as a business and, as a result, it could not pay salaries beyond April. 

This was after the government rejected a R10-billion bailout request from the airline to assist with restructuring and mitigating losses created by the worldwide travel bans. 

The airline confirmed on Friday that its subsidiaries, Mango, SAA Technical and Air Chefs, would pay only 50% of staff salaries, and has applied to the Unemployment Insurance Fund for Covid-19 assistance for the balance of the salaries. 

Since the settlement agreement was issued by the rescue practitioners last Saturday, labour has been meeting the government in the form of members of the inter-ministerial committee on SAA and Gordhan’s department. 

A statement issued by the public enterprises department earlier this week said it was agreed during these discussions that work would begin to ensure that a “new financially viable and competitive airline emerges from the business rescue process”. 

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