South Africa’s Labour Court on Friday ordered business turnaround strategists in charge of the country’s troubled national carrier to stop their plans to dismiss nearly 5,000 workers at the airline.The caretakers, formally known as the Business Rescue Practitioners, two weeks ago announced plans to retrench the workers as part of measures to disband the cash-strapped South African Airways (SAA).
The move, however, met with stiff resistance from the National Union of Metalworkers of South Africa, the South African Cabin Crew Association and senior members of the ruling African National Congress party who saw this as a political disaster in a country already bleeding from high unemployment.
The plan to carry out mass dismissals drove the labour unions to take their grievances to the Labour Court whose ruling on Friday has built temporary peace between the airliner and the 4,700 workers who had vehemently rejected the business rescuers’ plan to retrench them as part of their liquidation of the SAA.
Labour Court judge Andre van Niekerk said the “crisp issue” was whether Section 136(1)b of the Companies Act permitted a business rescue practitioner to retrench employees “only as part of a business rescue plan and on presentation of that plan or whether a retrenchment process may be initiated in the absence of a business rescue plan.”
Van Niekerk said the court decided that “on a proper interpretation of S136(1), a business rescue practitioner may initiate a retrenchment process only once a business rescue plan that contemplates retrenchments has at least been presented.”
He added: “In the absence of a business rescue plan, the issuing of notices commencing a consultation process over proposed retrenchments is procedurally unfair.”
However, the judge said nothing in the order precluded the business rescue practitioners from offering, or employees from accepting, a voluntary retrenchment offer.