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The National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) condemns the Business Rescue Practitioners decision to cancel 11 routes. This means that on the 29th of February all domestic destinations, including Durban, East London and Port Elizabeth, will cease to be operated by SAA. This will have a devastating impact on workers and their families because it effectively means that SAA in KZN, PE, Durban and East London will be closed down and workers will be retrenched.
No consultation whatsoever has taken place with labour as required by law and the BRP has acted in flagrant disregard of the provisions of the Labour Relations Act. Instead of consultation, labour was merely informed of this decision and its devastating consequences in respect of job losses and the BRP’s even had the audacity to release the press statement announcing their decision, while we were still in the meeting discussing details!
Of immense concern is that the BRPs were unable to provide any rational basis for the cancelation of routes and in fact confirmed that this was a plan which was previously devised by SAA management - the very same management which is responsible for the demise of SAA and who turned a blind eye to rampant looting and corruption at the airline. Corruption and mismanagement are the reasons for SAA’s predicament.
Not only has the BRP failed to comply with the provisions of the Labour Relations Act in respect of meaningful joint consensus seeking consultations during which the rationale of their decision could be interrogated and alternatives proposed, but the BRP also failed to date in their core statutory responsibility to produce a Business Rescue Plan and to take positive and decisive steps towards saving SAA in the most optimum manner possible for the benefit of allstakeholders.
Not only were patently corrupt contracts not suspended, but the very incompetent if not corrupt management which caused the demise of SAA were permitted to continue managing operations to the further detriment of SAA. The BRP’s are clearly not looking at the most optimum plan in the interests of all stakeholders. Instead they have given effect to the narrow interests of those who have deliberately sabotaged the turn-around of SAA in order to obtain their selfish objectives.
There are ways to save the airline money which the BRP is ignoring
SAA is in this crisis because of rampant mismanagement, looting and corruption which government as the shareholder failed to address, together with the board and the executive management. SAA’s biggest cost driver is not labour, it is the R25 billion per year procurement spend which, since 2015, has been exposed in various forensic reports as being the product of looting, corruption and mismanagement. The BRPs have the power to suspend, cancel, re-negotiate or insource these contracts in order to save money, but strangely, they have chosen not to do so.
For example, the Zondo Commission heard yesterday how SAA has paid R1.1 billion to Swissport since 2012 for its services, without a signed contract. To date Swissport continues to provide these services without a contract. In 2015 Ernst and Young exposed this in their forensic report and recommended that it be cancelled or re-negotiated, but this has never been done. This continues to be the case with many other contracts at SAA. Corruption is alive and well at SAAs but nothing has been done about it. It is contracts like these which are choking the airline.
Inexplicable and of immense concern is that the BRPs, through SAA management, reneged on the terms of a collective agreement concluded with NUMSA and SACCA in 2019 in relation to the government sponsored Training Lay-off Scheme instead of retrenchments. If implemented the scheme allows SAA to take workers on training and 75% of their salaries will be paid for by the SETA’s for a minimum of 6 months, while they are training. It will ensure that the company does not have the added burden of paying salaries when it is financially distressed. It is deeply disturbing that a decision was taken not to implement the scheme.
Their actions reinforce our belief that the executive management of SAA cannot be trusted because they are working with the board to ensure that SAA collapses so it can be quickly sold, in order to cover up for their looting and corruption. We want to warn them that will not allow them to get away with their thievery!
Late last year NUMSA and SACCA were involved in a Task Team whose job was to cancel, re-negotiate or insource contracts which were a financial burden to the airline Unfortunately this work has been suspended since Business Rescue was announced. NUMSA has been working with SAAT on this and so far we have we have identified savings to the value of R102 million by renegotiating contracts, ore replacing them with insourcing. We fail to understand how the BRP’s can plead poverty when they have failed to implement such obvious measures in order to alleviate financial pressure on the airline.
It seems self-evident that the BRP has not acted with the required independence and competence. The BRP has given effect to the narrow interests of those who were never committed to turning around SAA. Everything to date has confirmed our initial suspicion that the purported voluntary business rescue initiative was a mere sham process in order to undermine a genuine Business Rescue process in the interests of all stakeholders and the public at large.
Therefore, we have instructed our attorneys to explore all legal avenues available to us. We will communicate in due course as to our next course of action.
We want to assure our members and workers at SAA that the battle is not over. We remain committed to doing everything legally possible to reverse these unlawful retrenchments which are being imposed on workers.
This statement was issued on behalf of NUMSA and SACCA.