Fri, 17 Jul 2020

Triumphant Numsa, Sacca: How we got to 8% from SAA

23 Nov 2019, 05:43 GMT+10

The National Union of Metalworkers of South Africa (Numsa) and the South African Cabin Crew Association (Sacca) are pleased that they secured the 8% wage increase demanded from South African Airways (SAA).

SAA initially would not budge from offering 5.9%.

The new wage increase agreed to on Friday is, however, subject to the necessary funds being obtained by the financially embattled state-owned airline.

The unions and the airline have been locked in marathon negotiations the past two days to find a settlement in order to resolve a week-long strike at SAA and SAA Technical.

SAA estimated that the strike cost it about R52m a day. It also led to some flights being cancelled over the period.

SAA has now agreed to pay a 5.9% wage increase on total cost of employment. This will be paid in the 2020 February payroll and will be back-dated to April 1, 2019.

The back payment for the first 6 months - from April to September - will be paid in the March 2020 payroll. The remaining four months - from October 2019 to January 2020 - back pay will be paid in April 2020.

It is now up to a task team, facilitated by the CCMA, to find the cost savings needed for the airline to make up the remaining 2.1% of the effectively 8% wage increase.

The task team must identify contracts which are "onerous to the finances of SAA" and ensure that such contracts are either re-negotiated, cancelled or in-sourced, whichever is the most affordable for the airline.

Fin24 reported a few weeks ago that SAA is apparently scrambling to obtain R2bn before the end of the month, according to a source. Since then, there has been no announcement of this funding having been obtained.

Over the past 13 years, the flag carrier has incurred over R28bn in cumulative losses. In the medium-term budget policy statement, Finance Minister Tito Mboweni announced that the state would pay off SAA's government-guaranteed debt of R9.2bn "over the next three years" to honour the airline's contractual obligations.

Minister of Public Enterprises Pravin Gordhan even warned in Parliament on Wednesday that the airline might not be able to pay salaries at the end of the month.

SAA, unions reach wage deal - if funds are available

"Our strike was never just about securing a wage agreement. At the centre of our demand was to secure changes which would result in the long-term sustainability of the SAA group, and assist it to get back onto the path of profitability," Numsa and Sacca said in a statement released on Friday late afternoon.

The unions say they have also negotiated for SAA employees to participate in a training lay-off scheme. During the four to six-month period of training, SAA is only obligated to pay 25% of the salaries, including benefits, of participants. The remainder of these salaries are then paid by the Department of Labour during that period.

The unions regard this as an important intervention in the light of SAA's intention to restructure - a process which the airline has indicated could lead to job losses of more than 944 workers.

As part of their new agreement with SAA, the two unions have negotiated for any retrenchment process to be deferred to the end of January 2020.

In the view of the two unions, the participation of workers in the training layoff scheme, should assist in preventing job losses because it will save the airline wage costs. At the same time, it will develop employees' skills.

SAA earlier indicated that the restructuring process would still continue for SAA management.

The unions, furthermore, negotiated a tax benefit for employees earning less than R600 000 a year (about R50 000 per month) in the form of an educational bursary fund.

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