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By Antony Sguazzin 
17h ago
CAPE TOWN – The South African labor court told administrators of the state airline that they cannot compel workers to accept severance payments, deepening the chaos surrounding the bankrupt company’s future.
The administrators, known locally as business rescue professionals, were sued by major unions on South African Airways. BRPs have said there is no money to pay wages and that the alternative to a process in which assets are sold to finance severance payments is liquidation, which could result in workers not receiving payments. Public enterprises
Minister Pravin Gordhan criticized the administrators’ performance and said he wants to create a new airline, without saying how. His approach has been endorsed by the National Executive Committee of the ruling African National Congress.
The SAA dispute, which has not made a profit since 2011 and has been surviving government bailouts, is seen by investors as decisive proof of the state’s resolve to deal with indebted state companies that are depleting their resources.
The government has told administrators that there are no more state funds available to help the airline, which until the recent route cuts flew to six continents and operated a domestic service.
The coronavirus pandemic has seen its flights ashore and revenues have been greatly reduced.
The court said the approach taken by the administrators was procedurally unfair, according to a copy of the ruling seen by Bloomberg. Administrators said they are considering the sentence.
BLOOMBERG
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