CAPE TOWN – Most trade unions representing staff at South African Airways (SAA) have agreed to retrenchments that will see 2 700 employees laid off as the department of public enterprises (DPE) pushes for the adoption of a business rescue plan for South Africa’s broke national carrier.

The department said the National Union of Metalworkers of South Africa (NUMSA) and the South African Airways Cabin Crew Association (SACCA) had finally agreed to a severance package structure, though the South African Airways Pilots Association remained recalcitrant.

Agreement was finally reached with NUMSA and SACCA late on Tuesday at a labour consultative forum. “The parties agreed ‘that they had no objection to SAA/DPE offering to individual employees a voluntary severance package as proposed by the DPE’,” the department said, adding that the agreement gave momentum to the adoption of a business rescue plan by creditors.

The agreement from the two key unions came as the business rescue team published a schedule of amendments to the rescue plan for the airline, which confirms that the cost of retrenchments and benefits payable will not exceed R2.2 billion (US$129.5 million).

The position of the pilots’ association however remains unclear. The union plans to consult with the business rescue practitioners directly.

Labour unions were instrumental in pushing back a scheduled vote on the plan tabled by business rescue practitioners Les Matuson and Siviwe Dongwana to July 14.

The department said the staff that accepted voluntary severance would be able to access payout packages as soon as the plan was endorsed by creditors.

Seventy-five percent of creditors have to vote in favour of the plan for it to be adopted.

In terms of the business rescue proposal, 1,000 of the loss-making airline’s employees will be retained. Another 1,000 will be placed on a training layoff scheme for a year.

If they are not offered jobs at the end of that period, they will be offered severance packages.

In terms of the amendments, all existing job contracts for SAA staff will come to an end, as well as all collective agreements, and new terms and conditions will be negotiated, in line with current market conditions.

The amendments further commits SAA to supporting any “more feasible and equitable restructuring plan” that the leadership compact forum may propose, provided that it does not place a greater financial burden on the airline.

The DPE minister, Pravin Gordhan, has been a vocal proponent of attempting to turn around SAA after losses of tens of billions of rand in the past two decades, rather than placing it in liquidation. – Nampa/ANA