In a joint statement on Friday (June 26) the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) have expressed their relief that 69% of the creditors of South African Airways (SAA) voted to adjourn (to July 14) the vote on the proposed business rescue plan for the financially-embattled State-owned national flag carrier. Numsa and Sacca had been among those opposed to the proposed business rescue plan and they, along with the Airline Pilots Association of South Africa, argued at the creditors’ meeting that the plan was “weak” and was very unlikely to save the airline.
The plan had been put forward by SAA’s business rescue practitioners (BRPs) and had been supported by the Department of Public Enterprises (DPE), which represented the government, which was the airline’s shareholder. The two unions charged that the business rescue plan, among its many other inadequacies, was unfair in its treatment of labour. Further, it did not meet the requirements of the Companies Act or the Labour Relations Act.
“The purpose of the adjournment is to allow for all stakeholders to work together to improve on the plan and to amend it accordingly,” explained the two unions. “It is no secret that Numsa and Sacca have not been in favour of the proposed business rescue plan, because it is defective and lacks the kind of detail which would ensure the emergence of a sustainable airline.”
They called on the BRPs to use the period of the postponement to continue discussions with labour, creditors and other stakeholders and to revise the business rescue plan so as to remove its deficiencies. The objective would be the publishing of a business rescue plan that complied with the law, did not have so many conditions attached to it, and provided greater certainty for the affected parties.
“This period offers all of us a golden opportunity to work together to improve on the plan for a sustainable airline,” they pointed out. “The BRPs’ claim, that the postponement will fast track liquidation, is simply not true. 69% of the creditors were not convinced the plan is viable. If Numsa and Sacca had not offered the alternative of a postponement, it would have meant that the creditors would [have] had no choice but to reject it. Rejecting the plan would have put the airline directly onto the path to liquidation and this is something that Numsa and Sacca have been doing everything possible to avoid. The adjournment has in fact prevented the liquidation of the airline.
The two unions also addressed the issue of the voluntary separation packages (VSPs) for SAA workers, announced by the DPE on Thursday (June 25), before the airline’s creditors voted on the business rescue plan. The labour organisations reported that they had received the offer of the VSPs by email late on Tuesday (June 23) evening. The DPE had urged acceptance of the packages.
“Workers at SAA have been put under enormous pressure to sign the documents as quickly as possible, and some have been calling on us to sign,” highlighted Numsa and Sacca. “The VSP was conditional upon the business rescue plan being approved. The fact that 69% voted in favour of an adjournment means that it was unlikely that the majority of creditors would support the plan. We need a sustainable plan, and without a plan, it means that the VSPs cannot be approved. We also have a lot of questions that DPE must answer before the document can be signed and we would appreciate an opportunity to engage with them on the proposal so that if we are to sell it to our members, we can be confident that these packages are to their benefit, and will not leave them worse off after the payout.”