SAA / Image via Adobe Stock
SAA / Image via Adobe Stock
The Department of Public Enterprises (DPE) has shut down a proposal put forward by the South African Airways Pilot’s Association (SAAPA) that accepts the terms of the voluntary severance package (VSP) that has been offered to them by South African Airways (SAA), but placed additional demands on the broke airline.
The DPE said that the demands, which include the retrenchment of 1 548 employees and retention of 3 099 employees, with further salary cuts to be made for pilots and employees.
According to the DPE, the pilot’s association made the following demands upon accepting the VSP:
The DPE said that these terms were simply unaffordable and that SAAPA were demanding an unreasonable compensation for senior pilots.
“For example, in the latest Voluntary Severance Packages (VSPs), the 600 SAA pilots make up 13% of SAA staff, and they consume 45% of the wage bill,” it said.
“The lowest of SAA’s 170 senior pilots earn R3.6 million a year, excluding benefits and incentives. Of the R2.2 billion proposed budget for the VSPs, pilots will get more than R1 billion.
The department said that the demand that more staff be kept on in order to participate in the inception of a new airline is unqualified.
“SAAPA’s proposals seek to retain a much larger number of employees – in particular, more pilots – in a new, restructured, viable and competitive airline that must emerge from a business rescue process for SAA.”
“These purport to be affordable now, when in fact they would cause the base costs of starting a new airline to be substantially higher, unaffordable and unsustainable.”
They said that SAAPA are basing the demands on the erroneous principle that SAA is currently in any manner of good financial health.
“What SAAPA fails to recognise and accept is that the terms and conditions of employment of the pilots is still based on the premise that SAA is an internationally competitive and profitable company.”
The department’s deputy Director General Melachton Makobe added that SAAPA have been informed that their proposal won’t be considered, saying that it is simply not in the best interests of the company or its employees.
“The proposals by the pilots are very much unsustainable and the department does not believe that the proposal is in the best interests of SAA and its employees. The department has informed the pilots that their proposal cannot be accepted.”
Meanwhile, the National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) said that they had been vindicated after the Labour Appeals Court dismissed the SAA business rescue practitioners application to begin retrenchments at the broke airline.
Numsa’s Phakamile Hlubi-Majola said that the decision would have far reaching effects on other companies undergoing business rescue.
“There are many companies which have filed for business rescue in our country,” he said.
“The judgment effectively means that business rescue practitioners may not be used by employers to prune the business by cutting jobs and the fundamental challenges threatening the companies’ survival must be addressed in the business plan.”