SAA business rescuers lose Labour Court appeal
The Labour Appeals Court has dismissed a bid by South African Airways’ (SAA) business rescuers to set aside a ruling on retrenchments at the national carrier.
In May, the Labour Court ruled in favour of the National Union of Metalworkers of SA (Numsa) and the SA Cabin Crew Association (Sacca).
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The two unions argued that the business rescuers must first present a business rescue proposal before they are able to start the retrenchment process.
Following their appointment, practitioners argued that the carrier needs to shed thousands of jobs in order to lessen its operational costs.
The airline has reported a loss of R16 billion over the past three years.
However, Numsa spokesperson Phakamile Hlubi-Majola says the decision to retrench workers was made prematurely.
“We argued that section 136(1) of the Companies Act regulates employees’ rights when companies are placed under business rescue and it is very clear on the rights of employees.
“This judgment effectively means that business rescue practitioner may not be used by employers to prune the business by cutting jobs, and the fundamental challenges threatening the company’s survival must be addressed in the business rescue plan.”