The standoff between workers’ unions and South Africa’s national airline, SAA, continues. The carrier has received R1.5bn of its R10.5bn bailout from the Department of Public Enterprises (DPE). Administrators say the funds can’t be used because conditions stipulated for their use are illegal. With bailout money tangled in red tape, the DPE is asking workers to accept three months of pay, when they are legally entitled to eight. While the DPE considers the agreement to be fair, some workers are refusing to settle. – Melani Nathan
South Africa government offers SAA staff less than legally required
By Antony Sguazzin
(Bloomberg) –South Africa’s Department of Public Enterprises has asked workers at the bankrupt national airline to accept three months’ pay rather than the eight months they are entitled to by labour law and the terms of a business rescue plan, according to a labour union leader.
The offer was made at the weekend and will not be accepted “on our watch,” Grant Back, chairman of the South African Airways Pilots Association, said in an interview on Monday. The department paid R1.5m to the administrators of the airline last week, but the money can’t be used because the administrators say the conditions imposed breach labor and companies regulation.
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South African Airways, which was placed under administration in December last year, hasn’t flown commercially since March and its business rescue plan details a hierarchy of payments including severance packages for dismissed workers.
“The DPE considers the agreement reached with some unions” for three months payment to be fair, the department said in a statement on Monday. “Certain unions are deliberately undermining the process and seem to be in alliance with opposition parties to undermine the business rescue process.”
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Under South Africa’s companies act when a firm is placed under so-called business rescue advisers are the first to be paid, followed by secured creditors and employees for work done during the business rescue period. The department wants some of the money to be given to SAA subsidiaries, which weren’t part of the business rescue, Back said.