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South Africa offers bankrupt airline’s staff less than legally required

8th December 2020

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The Department of Public Enterprises has asked workers at the bankrupt national airline to accept three months’ pay rather than the eight months they are entitled to by labour law and the terms of a business rescue plan, according to a labour union leader.

The offer was made at the weekend and will not be accepted “on our watch,” Grant Back, chairman of the South African Airways Pilots Association, said in an interview on Monday. The department paid R1.5-billion to the administrators of the airline last week, but the money can’t be used because the administrators say the conditions imposed breach labour and companies regulation.

South African Airways, which was placed under administration in December last year, hasn’t flown commercially since March and its business rescue plan details a hierarchy of payments including severance packages for dismissed workers.

Richard Mantu, a spokesman for the department, acknowledged receipt of questions but didn’t immediately respond to them.

Under South Africa’s companies act when a firm is placed under so-called business rescue advisers are the first to be paid, followed by secured creditors and employees for work done during the business rescue period. The department wants some of the money to be given to SAA subsidiaries, which weren’t part of the business rescue, Back said.

Edited by Bloomberg

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