Many South African Airways (SAA) employees have not received salaries for almost a year as unions continue to push for workers to receive their full salaries in arrears, according to a report by the Sunday Times.
These workers have had to make drastic lifestyle changes to make ends meet, including moving out of their homes, taking on significant debt, and starting side businesses to help pay for expenses.
“My husband had to sell his car and take his old car back from his sister,” one SAA employee told the Sunday Times.
“It has been a nightmare because we have been literally thrown to the dogs.”
The Department of Public Enterprises said that some unions are demanding workers be paid their full salaries in arrears, but noted that this was simply unaffordable.
In a recent presentation to SCOPA, the department said employees were owed three months’ salaries for June 2020 to August 2020, adding that it could not afford to pay the full arrears salaries as this would place the business rescue process at risk.
SAA workers reportedly relied on the government’s TERS COVID-19 relief scheme for income over the past year.
Unions have rejected SAA’s proposed severance package with three months’ pay, stating that it amounts to nothing considering the TERS and tax deductions on these amounts.
The South African Cabin Crew Association added that unions had attempted to negotiate for an equity stake in the new “SAA 2.0” for employees, but this had been refused.
Private partners and SOE forecast
As part of the plan to save the bankrupt state airline, the government has identified three equity partners and will decide which to pick in the coming month.
Public Enterprises Minister Pravin Gordhan said in a recent interview with Bloomberg that the interim board of South African Airways is engaging with the candidates before the government makes its recommendation.
Tapping a major private sector investor is key to Gordhan’s plan to help rescue South African Airways.
Gordhan also added that Eskom’s significant debt figure of R464 billion would become a “thing of the past” in the next three to five years.
Eskom is regarded as the Department of Public Enterprises’ biggest liability due to its dire financial situation and the regular load-shedding implemented as a result of its unreliable national power grid.
President Cyril Ramaphosa has highlighted the importance of returning Eskom to profitability and combatting the regular load-shedding that plagues the country.
While he outlined measures to be taken this year in procuring generation from independent producers to bolster the power grid, there were no details on a much-anticipated solution to the utility’s chronic debt pile.
Gordhan said that this debt will not necessarily require government funding and more creative solutions may be found to deal with the problem.
“The broad direction will be known in the next three-to-five months in terms of where the debt goes and it won’t necessarily be a burden on the fiscus — there might be more creative ways of finding solutions,” Gordhan said.