SAA’s Business Rescue Practitioners may not proceed with retrenchment procedures commenced before they published their business rescue plan, but they may offer voluntary severance packages to employees.

This is the upshot of the Labour Appeal Court’s dismissal on Thursday (July 9) of an appeal by SAA’s BRPs against a May 7 judgment by the Labour Court.  It upholds the Labour Court’s ruling in favour of trade unions representing SAA employees that the BRPs cannot commence with Section 189 Labour Relations Act (LRA) retrenchment procedures without first publishing a business rescue plan.

SAA and BRPs Les Matuson and Siviwe Dongwana took the matter to the Labour Appeal Court on June 30. Respondents included seven trade unions representing SAA employees, as well as non-unionised staff and the Commission for Conciliation, Mediation and Arbitration (CCMA).

Handing down the ruling on Thursday, Judge Violet Phatsoane, found that “no cogent criticism can be sustained on the Labour Court’s conclusion that the issuing of the S189 notices by the BRPs, absent the business rescue plan, was premature, unfair and had to be withdrawn.” 

She found that the LRA makes it clear that a rescue plan must precede any retrenchment. She also rejected the applicants’ arguments around the Labour Court’s jurisdiction on legal proceedings against a company in business rescue.

On a cross-appeal by the same applicants and respondent over the legality of voluntary severance packages offered to SAA employees, the judge said the Labour Court did not make any order regarding the offer of voluntary retrenchment packages. “In any event, there is no reason in law why the BRPs could not unilaterally offer voluntary severance packages to the employees,” she ruled.

The BRPs in response said they were studying the judgment and considering the company's position.