South Africa's public enterprises department said on Thursday it had offered final and fair voluntary severance packages to employees at struggling national carrier South African Airways (SAA) which would be supported by a social plan including skills development.
The government placed South African Airways - which last turned a profit about a decade ago and has lost an estimated R28-billion (about US$1.6-billion) over the past 14 years - under business rescue last December. Efforts to revive its fortunes have been derailed by the Covid-19 pandemic which has largely grounded air travel globally.
In a statement, the public enterprises department said the severance packages could be offered to workers immediately after a vote on a business rescue plan for SAA due later on Thursday, should creditors support it.
It said the package complied with the guidelines of the Basic Conditions of Employment and Labour Relations Acts, including one week calculated per year of completed service, one month notice pay, accumulated leave paid out, a 13th annual cheque and a top-up of severance packages.
A vote in favour of SAA's rescue plan by 75 percent of the voting interests is required. The government department said a vote against the plan would result in the protracted and costly liquidation of the airline.
"The department has given a great deal of thought to the packages and wish(es) to emphasise that a new, restructured, viable airline cannot be competitive if it would be required to bear the cost of carrying the current SAA employees," it said, adding that the national airline was not in a position to offer any additional benefits.
Should the business rescue fail, the liquidation of SAA would see employees receive up to a maximum amount of R32,000 ($1,837) per employee if funds were available.
"As the shareholder on behalf of government, the (department) believes the approval of the business rescue plan would help creditors and employees to be co-creators of a new airline and ensure a strong base is maintained for the growth of the local aviation industry," it said.
Employees who take up the voluntary severance packages will be entitled to re-apply for positions in the new restructured company as it grows.