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The Labor Court ruled that the redundancy notices issued to nearly 5,000 workers were “unfairly procedural” under section 136 of the Companies Act because SAA rescue practitioners Les Matuson and Siviwe Dongwana have not filed a decisive plan on how the airline will be rescued.
SAA’s lengthy commercial rescue process was impacted on Friday, May 8, with Labor Court Judge André van Niekerk ordering designated rescue practitioners to withdraw the reduction of personnel notices issued to the nearly 5,000 airline workers .
The court order adds yet another twist to SAA’s commercial rescue procedures, which have been ongoing for five months and have yet to deliver a firm decision on how the troubled airline will be rescued.
Van Niekerk said the downsizing notices were “unfairly procedural” under section 136 of the Companies Act because SAA-appointed rescue practitioners Les Matuson and Siviwe Dongwana delivered them to workers without presenting a decisive plan. about the destination of the airline. The Companies Law governs the rescue procedures for companies in SA and establishes the duties of rescue professionals.
In interpreting section 136 (1) of the Companies Act, Van Niekerk said that business rescue professionals can only initiate a reduction process once a business rescue plan has been presented to affected parties, including SAA workers, their representative unions, creditors and others.
“In the absence of a trade bailout plan, issuing notices to begin a consultation process on the proposed reductions is unfair in procedure,” Van Niekerk wrote in his trial.
He said that section 136 (1) of the Companies Law should be read in conjunction with the Bill of Rights, which gives workers the right to fair labor practices and the preservation of job security.
“Section 136 (1) (b) requires that any downsizing needs necessarily be based on the commercial rescue plan. It is the contemplation at that point that there is a possibility that employees may be dismissed as an element of the plan that puts into effect sections 189 and 189A of the Labor Relations Act. There is no provision in section 136 (1), or anywhere else in chapter 6 of the Companies Act, that empowers a business rescue professional to reduce employees in the absence of a business rescue plan, “he said. .
Section 189 of the Labor Relations Act establishes the steps and queries that a company must follow during downsizing.
Matuson and Dongwana were not immediately available to comment on the Labor Court ruling.
Delays in the rescue plan.
The duo has not presented a final trade bailout since the government placed SAA under a voluntary trade bailout in December 2019.
After an initial agreement to publish the plan in February 2020, Matuson and Dongwana have twice requested extensions on the deadline to present the final trade bailout plan. The plan is now expected to be released on May 29, 2020.
One of the reasons given by Matuson and Dongwana for delays in releasing the plan is that they do not have the money to finance the next phase of the trade rescue procedures. The R5.5 billion awarded to Matuson and Dongwana by commercial banks and the South African Development Bank since December 2019, money that was established to finance SAA’s working capital requirements while restructuring, has been exhausted . The government has rejected Matuson and Dongwana’s request in April 2020 for additional funds of between R7.7 billion and R10 billion.
The SA National Union of Metalworkers (Numsa) and the SA Cabin Crew Association (Sacca), which in one coalition are the majority union in SAA, approached the Labor Court to prevent Matuson and Dongwana from continuing to cut workers. from the airline.
To restructure SAA, on March 9, 2020, Matuson and Dongwana moved to reduce employment costs at the airline by offering almost all of the staff reduction packages that include a month’s salary, a week’s pay For each year of service on the airline, the annual annual license fee and a 13th check if you’re entitled to one.
Numsa and Sacca argued in court that Matuson and Dongwana were unable to begin section 189 consultations with SAA workers and unions about staff reductions, while the plan to rescue the airline has not yet been seen by the affected parts. BM
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