THEBE MABANGA
PUBLIC Enterprises ministry has announced that South African Airways employees, except pilots, have accepted in principle at least the department’s offer of as severance package to make way for the creation of a new airline.
But this is, at best, a peculiar victory for the Department and the matter is far from settled.
The packages offer a week’s pay for every year of service, leave and notice pay, 13th cheque and top up to ensure it is not below R200 000.
It will cost R2.3 billion or almost 10% of the mooted R26 billion required to set up a new airline which the department must secure form the fiscus and private funders by next Wednesday.
The package is dependent on a vote by 75% of creditors on a Business Rescue Plan published on Wednesday to be voted on next Tuesday.
This is after the last vote was adjourned last month.
The revised plan is 12 pages of clarifications and correction with little substantive changes to the original.
It would be interesting to see if unions accept the new version.
What the Department has done is to persuade workers and creditors to vote for a Business Rescue Plan that the department itself is not entirely happy with.
The department has expressed dissatisfaction about aspects of the process followed by Business Rescue Practitioners Siviwe Dongwana and Les Matuson to formulate the plan.
From the number of postponements they required to produce it to the lack of adequate consultation with workers, to overall cost that the department called a moving target, to calling an earlier version of the plan “weak and inadequate” and even when accepting the current version, the department expressed misgivings as to whether the plan goes far enough to create a viable, competitive airline.
What the department needs is for the plan to pass so they do not have to resort to the fiscus to fund the severance package.
The severance package plan is endorsed by the National Transport Movement (NTM), the South African Transport and Allied Workers Union (SATAWU), the Aviation Union of Southern Africa (AUSA), Solidarity, the National Union of Metalworkers of South Africa (NUMSA), the South African Airways Cabin Crew Association (SACCA) and representatives of the SAA non-unionised managers and ground staff.
But NUMSA and SACCA were instrumental in the adjournment of the last vote, arguing that the current plan, among a number of deficiencies, had no adequate consultation, violates labour laws, and does not put the interest of workers first and has flawed underlying assumptions.
They led the calls for the formulation of a new improved plan to be voted on next week.
Now they are endorsing severance based on a plan they effectively rejected.
NUMSA and SACCA have claimed credit for securing a deal that will see 1000 workers retained for 12 months on a lay off training scheme as SAA employees with the airline not paying salaries but paying R4 650 per employee.
At the end of that period an employee would still receive the package if they cannot be retained.
The structure at which the agreement was reached is interesting.
The Leadership Consultative Forum was formed after the department felt workers were not adequately consulted and involved in the formation of the new airline.
But the department announced its withdrawal from the LCF when the last vote collapsed, leaving workers to their own devices.
What is more curious is the position of the SAA Pilots Association (SAAPA), whose stance remains unclear but have sought further engagements with BRP.
Pilots stand to gain the most form this severance package, with an average settlement of R1.9 million.
The next best severance packages go to simulators who are part of ground staff and management and specialists, with packages averaging just under R480 000.
Pilot salaries and the long term leasing contracts are cited as tow of the costs that have crippled SAA and are the key reason a new entity without the baggage of these costs.
So why would people who stand to gain the most be ambivalent in accepting the offer?
It can only be because they believe they can extract a better deal for themselves and everyone else.
The pilots say the can save the department R290 million.
But the department has rejected this saying the overall cost burden of establishing a new airline far outweighs the proposed savings.
What the department appears to have succeeded in doing is persuade all concerned that business rescue is far more desirable than liquidation, which would leave workers worse off with a capped pay out of R32 000, whatever the years of service.
The crucial test now is the content of the revised Business Rescue Plan and next week’s vote.
That may prove a tougher hurdle for the department to overcome.
(Source: Inside Politics)
