South African court dismisses appeal against SAA layoff ruling

PUBLISHED: Fri, 10 Jul 2020 07:51:09 GMT

JOHANNESBURG (Reuters) – A South African court on Thursday dismissed an appeal by administrators in charge of South African Airways (SAA) against a ruling which prevented them from laying off staff.

The failure of the appeal means the administrators may have to start consultations about layoffs from scratch if employees do not accept severance packages they have been offered.

South African labour law stipulates a minimum two-month consultation period for layoffs.

The Labour Appeals Court upheld a May ruling that consultations on layoffs at SAA should wait until after the administrators published a rescue plan for the loss-making state airline.

That plan was published last month and tweaked earlier this week, after repeated delays and months of wrangling with the government and unions.

But the administrators, who took over SAA in December, issued notices to consult on job cuts in March, prompting some unions to approach the courts.

“The formulation of a business rescue plan is the central task of the business rescue practitioner,” read the Labour Appeals Court judgment seen by Reuters.

“As the business rescue plan must be published within a short period, retrenchments would be contained in the plan as opposed to a piecemeal reconstruction of the company which would allow a decision on retrenchments before the plan was published.”

The administrators said they were studying the judgment. The general secretary of the NUMSA union, Irvin Jim, celebrated it as a victory on Twitter.

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.