Unions threaten legal action if government does not commit to saving State-owned airlines

18th September 2020 By: Rebecca Campbell - Creamer Media Senior Deputy Editor

Two trade unions, the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca), have jointly announced that, together, they are going to challenge in court the liquidation of State-owned airlines South African Airways (SAA) and South African Express (SAX). The unions pointed out that SAX was already under provisional liquidation and that SAA was in immediate danger of liquidation.

Numsa and Sacca have officially communicated, by letter, their intention to the Presidency, the Department of Public Enterprises, the National Treasury and the Speaker of the National Assembly. These individuals and institutions were given until Friday to announce immediate concrete measures to prevent the liquidation or closure of the two airlines.

“We are challenging government for not giving effect to the law by failing to provide funding for SAA and SAX and for failing to ensure that they are viable and sustainable,” explained the unions. “Government has a legal obligation to ensure the continued existence and viability of all our State-owned companies (SOCs) and in particular SAA and SAX. In our letter we have also reminded all parties concerned that a SOC cannot be placed under liquidation in the absence of parliamentary oversight and assent.”

Numsa and Sacca attacked the government for failing to protect jobs at SOCs in general. On the contrary, the unions charged that the government had permitted, even supported, labour retrenchments by SOCs in order to facilitate future joint ventures with, or sales to, commercial investors. This was despite the country’s high unemployment and rapidly increasing poverty.

The unions also blamed the collapse of SOCs on the government. This was because the State had failed to capitalise them, but had instead provided loan guarantees for banks, even though this was unsustainable and would (and did) result in SOCs falling into unmanageable debt traps. The banks were the only beneficiaries from this approach, charged Numsa and Sacca.

“Against the background of this unsustainable approach and inevitable financial destruction of these entities, government responded by way of introducing the notion of equity partners or even worse, by necessary implication, supported the liquidation of these entities and facilitated in the stripping of strategic national assets to the benefit of private and narrow interest groups, but also to the detriment of the country and people at large,” asserted the unions. On top of all this, the government had not only appointed incompetent and “compromised” people to the boards and senior managements of the SOCs, but had failed to take the required actions against those who were corrupt or compromised. The price for these failures, the unions highlighted, was being paid by the workers.