South Africa: DPE Supports Business Rescue's Lockout of SAA Pilots

(file photo).
17 December 2020

The Department of Public Enterprises (DPE) says it supports the decision by South African Airways (SAA) business rescue practitioners (BRP) to lockout members of the union representing pilots.

This follows the long-drawn-out negotiations with South African Airways Pilots Association (SAAPA), which failed to yield agreements on new conditions of employment for a future restructured airline.

According to Fin24, the lockout will apply to all 383 SAAPA's pilots from 12 noon on Friday, until the union accepts a set of demands laid out by the business rescue practitioners.

Lockout is defined as the exclusion of employees by their employer from their place of work until certain terms are agreed to.

According to the DPE, as a shareholder on behalf of government, it believes that one of the critical areas for a restructured SAA to get off the ground is to reduce the high-cost structure caused by "onerous" contracts and high salaries and perks implemented under SAAPA's Regulating Agreement (RA).

The department is pleading with the union to agree on new employment conditions, which will result in the restructured, sustainable, agile and technology savvy airline.

"Unfortunately, the RA that was signed in 1988 is a financial burden to the national airline as its primary objective is to preserve undeserved privileges accrued through unjust laws that preserved aviation careers to a small minority in this country."

The department said that these "privileges" came with unaffordable benefits and a salary framework, which should be terminated.

"We agree with the BRPs and their insistence on addressing the RA, as it cannot become part of the new SAA," the department said, adding that the RA is unconstitutional and unlawful and should be terminated.

Meanwhile, the lockout strategy undertaken by SAA is commendable considering the negative impact the RA has had on the airline's bottom line.

"It contributed to the lack of transformation at SAA due to the various clauses embedded in the agreement, which have curtailed the employment and promotion of Black, Coloured and Indian pilots to the high management structures of the airline."

The RA has a "succession of ownership" provision, which means that notwithstanding any changes in ownership of SAA, the RA will remain in full operation.

"Because government is seeking a strategic equity partner (SEP) for SAA, the RA in its current form, combined with succession clauses, will no doubt make SAA less attractive to potential partners."

The DPE said the process of restructuring the airline is imperative to ensure the meaningful transformation of the national airline.

"In an engagement with potential SEPs, DPE insists that national developmental objectives in aviation should receive priority in the new SAA.

"An appropriate balance to transformational objectives which are meant to right the historical discriminatory policies while also ensuring we retain strategic skills that achieve the country's demographics and gender objectives are non-negotiables."

Meanwhile, the department said it was important that all pilots cooperate in achieving these objectives.

"We urge the pilots to negotiate in good faith as all other workers in SAA have compromised immensely on their salaries and benefits to enable the launch of the new airline."

The DBE thinks it is unfair and unjust for pilots to expect all other categories of the workers at SAA to reduce their salaries and benefits while they maintain the status quo and contribute to the high-cost structure and high salary bill, which the new airline cannot afford.

"The SAA pilots, which according to the International Air Transport Association, are the second most highly paid pilots in the world, are not the only pilots to undergo salary cuts as the rest of the global industry have experienced a reduction in salaries and benefits for the overall benefit of the airlines and industry to take off again."

In addition, the department said the airline is encouraged to be steadfast in its journey to restructure the airline and all financial burdens that hamper the successful restructuring process should be terminated.

More From: SAnews.gov.za

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