R2.2 billion made available for SAA employees' voluntary severance packages

The Department of Public Enterprises says liquidation is the worse and only alternative.

The Department of Public Enterprises (DPE) has budgeted R2.2 billion that will go towards the Voluntary Severance Packages (VSPs) of South African Airways employees. In a statement released last week, the DPE said this was the best available solution given the massive financial demands and fiscal constraints that the government is currently facing. 
 
The department said the alternation to VSP via business rescue is liquidation, which will be a long-drawn-out process, where creditors would in all likelihood receive a negligible dividend and SAA employee would receive a maximum of R32 000 per staff member, regardless of years of service, to the extent that there are funds available. 

Also, the would only receive payment once the final liquidation and distribution account has been approved which can take up to 24 months. 


The DPE said that the VSPs, which can be offered to employees immediately after a creditors vote endorses the Business Rescue Plan, meet the requirements of Basic Conditions of Employment Act and the Labour Relations Act, including one week calculated per year of completed service, one-month notice pay, accumulated leave paid out, a 13th Cheque and a top-up of severance packages. 
 
Said the DPE: “The VSPs are supported by a social plan and a skills development programme for affected SAA employees. The social plan is aimed at equipping individuals to re-enter the job market. Employees who take up the VSPs will be entitled to re-apply for positions in a new, restructured national airline which is anticipated to emerge from the business rescue proceedings, as it grows.”
 
According to Fin24 unions that expressed an intention to sign up for VSPs are the National Transport Movement (NTM), the SA Transport and Allied Workers’ Union (Satawu), the Aviation Union of Southern Africa (Ausa) and Solidarity.