The Department of Public Enterprises (DPE) has announced that all but one of the unions representing staff at South African Airways (SAA), plus the representatives of the non-unionised staff, have now stated that they would not object to the DPE or SAA offering voluntary severance packages (VSPs) to their individual members. The sole exception is the SAA Pilots Association (SAAPA), whose position on the issue, says the DPE, is “unclear at this stage”.
“The DPE appreciates the level of commitment and cooperation from these unions and staff representatives to accept fair and reasonable severance packages in the interest of their members, at a time when the devastating consequences of the Covid-19 pandemic are causing thousands of job losses in the global aviation industry,” said the department. Regarding SAAPA, the DPE reported that this body did not oppose the offering of VSPs to its members, but that it wanted to directly consult the SAA business rescue practitioners about severance packages.
SAA, the State-owned national flag carrier, is currently under business rescue. Its creditors will vote on a business rescue plan on July 14. A majority of 75% of the voting interests will be required to approve the plan. Under the plan, some 2 700 SAA employees will be retrenched and 1 000 will be retained to form a relaunched airline.
The VSPs can only be implemented if the business rescue plan is approved. They include one week’s salary per year of completed employment, one month’s notice pay, a 13th cheque (an extra month’s bonus cheque), a pay-out of accumulated leave and a top-up of severance packages.
The DPE also published the values of the average VSP per category of employee. For pilots, this will be R1 960 068 and for cabin crew R352 588. Under the ground staff category, for cargo personnel the figure will be R351 674, for operations staff R351 209 and for simulator staff R476 976. Back office personnel will receive an average of R379 245, contractors R376 538, and management and specialists R477 192. The minimum size for a VSP will be R200 000. The total value of the VSPs will be R2.277-billion.
The unions successfully negotiated further benefits for their members at SAA. Of the 2 700 workers being retrenched, 1 000 will have their retrenchments delayed by a year. Instead, they will be put into a Training Layoff Scheme. Although still employees of SAA, the airline will not pay them during this 12-month period, but will contribute a maximum of R4 650 (presumably each month) to their pensions, company medical aid and unemployment insurance fund (UIF). SAA will also help staff members access other benefits, such as the UIF Temporary Employer/Employee Relief Scheme.
When new positions become available in the relaunched SAA, as it expands, recruitment preference will be given to the retrenched SAA personnel. Any workers on the Training Layoff Scheme who do not get a new job by the end of the 12-month period will still receive the full VSP.
“The DPE believes that the VSPs and a positive vote to finalise the business rescue process would be the most expeditious option for the national carrier to restructure its affairs, its business, debts and other liabilities, resulting in the emergence of a new viable, sustainable, competitive airline that provides integrated domestic, regional and international flight services,” it affirmed.