A High Court ruling this week means former Air Namibia employees will now receive full severance packages at the company’s cost. This comes after over 600 former Air Namibia employees fought for their full benefits from liquidators for nearly three years after the national airline was forced into liquidation.
The former employees expressed their dissatisfaction by demonstrating and knocking on many doors, some of which were not answered, until the High Court of Namibia this week ruled in their favour.
According to the judgement, the liquidators contended that Air Namibia’s contributions towards employees’ pension, social security and medical aid were not remuneration in terms of the Labour Act. But the employees contended contrariwise that the contributions formed part of their overall remuneration packages.
The liquidators appointed by the court are David Bruni, Ian McLaren and Simon Steyn. In terms of the Labour Act, remuneration refers to payments in money or in kind made by an employer as an obligation to his or her employee by virtue of the fact that the payee is his or her employee.
Judge Collins Parker declared that the employee’s remuneration, for purposes of calculation of the severance pay due to them by the liquidators by virtue of termination of their contract of employment with Air Namibia, should include basic salary, housing and transport allowance, and employers’ contribution towards medical aid, pension and social security.
Liquidators were further directed to recalculate the total amount due to each of the employees, using the employees’ remuneration as per the mentioned benefits above to determine the amounts payable for accumulated leave days, pro rata 13th cheque (bonus), severance pay, and notice pay.
“Amend their first liquidation and distribution account to reflect the total amounts as per the calculation stated in respect of each employee.
Pay within 14 days of confirmation of the amended first liquidation and distribution account each applicant the difference between the amounts arrived at after the calculation of this order,and the amounts already paid to the applicants in December 2022,” the judge stated.
This matter has now been finalised and removed from the roll, and no order was given as to costs.
Parker added that liquidators should have considered the employment contracts between Air Namibia and the employees when doing their calculations, and to best define the term remuneration.
Air Namibia was liquidated after government, as the sole shareholder, pulled the plug in March 2020 after it emerged that the airline accumulated about N$3.5 billion in debt, and a government-guaranteed debt of N$2.58 billion. When government announced the liquidation in 2020, it stated it could no longer sustain Air Namibia and, therefore, it would be impossible for the airline to trade out of insolvency.
The obsolete national airline’s debt comprised N$2.3 billion owed to trade creditors, and N$693 million in unpaid taxes. According to a report on 4 August 2021 by Bruni and McLaren, Air Namibia still owed N$105.5 million in unpaid severance packages to former employees.
Bank loans afforded to the collapsed airline totalled over N$408 million, while its assets were valued at N$1.1 billion. -mndjavera@nepc.com.na