Views Article – Sharenet Wealth

Europe, News

South African court rejects union bid to block SAA job cuts

(Adds plan to appeal, DA, Flight Centre)

JOHANNESBURG, Feb 14 (Reuters) – An application by two trade unions to block job cuts at struggling state-owned airline South African Airways (SAA) was rejected by the country’s labour court on Friday.

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.

(Reporting by Nqobile Dludla and Alexander Winning; Editing by David Evans, Jason Neely, Kirsten Donovan)


© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.