Business rescue practitioners have put a proposal on the table that will see severance packages paid from the sale of the embattled airline's assets.
South African Airways (SAA) has given employees a draft proposal to terminate contracts and pay severance packages from the sale of its assets. The airline’s business rescue practitioners gave unions and employees until next Friday to accept their staff termination proposal, which was drafted after the national government rejected the request for a further R10 billion.
Moneyweb report that, since SAA was placed in voluntary business rescue in December, the airline already spent R5.5 billion of additional funding raised from local banks and the Development Bank of Southern Africa. However, the Covid-19 outbreak caused the grounding of flights, which exacerbated the airline’s woes.
With no option of further funding, it appears that unions and the representatives of non-unionised employees now have until April 24 to agree to the business rescuers proposal.
SAA has 8,997 workers, according to the rescue practitioners employees, who, if they agree to the deal, will receive one week's remuneration for every year of service, one month’s pay in place of notice pay and payment for outstanding leave; as well as a pro-rated 13th cheque. All of the this, however, will be paid only once the airline has disposed of assets, including property, aircraft parts, and trade debts, all of which could take months or even years to complete.