Court rejects union bid to block SAA job cuts

SAA received a boost on Friday, as major travel agency Flight Centre said it would resume selling SAA tickets.
The Labour Court in Johannesburg has reserved judgement regarding the leave to appeal brought by unions, the National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA), about what they say are looming retrenchments at the South African Airways.

A date for the judgement has not yet been set. NUMSA and SACCA say they will await the court’s decision and insist there is evidence of plans to retrench staff.

Earlier the Labour Court ruled that the SAA business practitioners were not contemplating retrenchments. Unions applied for an urgent interdict on that judgement.

WATCH: Renè Bekker, from the South African Restructuring and Insolvency Practitioners Association, says business rescue practitioners should be given the space to finalise their mandate.

SAA is fighting for survival after being placed under a form of bankruptcy protection in December.

The unions argued that SAA’s administrators were planning far-reaching job cuts without holding the proper consultations required by the country’s labour law.

Judge Graham Moshoana said in a televised judgment that SAA’s business rescue team didn’t have to consult unions yet because it hadn’t issued workers with formal dismissal notices.

“Since the duty to consult has not arisen, the powers of this court to compel a fair procedure and or interdicting and restraining SAA are severely circumscribed,” Moshoana said.

A spokeswoman for the National Union of Metalworkers of South Africa, which lodged the court application together with the South African Cabin Crew Association, said the two unions would appeal Friday’s judgment.

The Democratic Alliance (DA), the country’s largest opposition party, said job cuts should be an essential component of any SAA rescue plan.

“There is general consensus that SAA is overstaffed by at least 30%,” the DA said in a statement. “There is absolutely no way that SAA can be rescued, if at all, without massive staff retrenchments.”

SAA received a boost on Friday, as major travel agency Flight Centre said it would resume selling SAA tickets.

Flight Centre stopped selling SAA tickets in November after its preferred travel insurance provider, Santam’s Travel Insurance Consultants (TIC), stopped covering SAA against insolvency.

TIC reinstated the insolvency cover on Friday, Flight Centre said.

Analysts say the move by TIC and another insurer to stop covering SAA against insolvency had hurt SAA ticket sales, exacerbating a cash crunch.