The joint business rescue practitioners (“BRPs”) of SAA, have today issued a 48-hour notice of lock-out to SAAPA with effect from 12h00 on Friday 18 December 2020. All 383 SAA pilots who are members of SAAPA will be affected.

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SAA BRPs Press release
16 December 2020
SAA BRPs take action to move business rescue forward
- SAA Pilots given 48-hours lock-out notice
The joint business rescue practitioners (“BRPs”) of SAA, have today issued a 48-hour notice of lock-out to SAAPA with effect from 12h00 on Friday
18 December 2020. All 383 SAA pilots who are members of SAAPA will be affected.
On 7 September 2020, SAA communicated certain demands to SAAPA and its members which it required SAAPA and its members to agree to. The
communication detailed new terms and conditions of employment and new salary scales for all pilots required to restructure SAA as per the S189A
notice issued on the 18 July 2020. In addition, SAAPA was required to agree to the termination of the Regulating Agreement and to the minimum
statutory severance pay of one weeks’ remuneration per completed year of service, as per the Basic Conditions of Employment Act 75 of 1997
(“BCEA”).
The BRPs noted, “The new terms and conditions and salary scales are essential for the new competitive and successful SAA, which will initially
require 88 pilots, to become cost effective and more productive. The new proposed terms include hours of work and rest which are aligned to the
Civil Aviation Authority and will provide SAA a better chance at being a sustainable airline, once it has completed the business rescue process”.

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Having exhausted negotiations and the internal dispute resolution process in respect of the matters stated in the 7 September 2020 letter to
SAAPA, SAA referred a dispute to the Commission for Conciliation, Mediation and Arbitration (“the CCMA”) on 30 October 2020. The parties
subsequently engaged in further extensive negotiations regarding the termination of the Regulating Agreement and all other collective agreements
concluded between SAA and SAAPA. The parties also engaged on reaching agreement on new terms and conditions of employment for pilots and
on new salary scales. Unfortunately, the parties were unable to reach an agreement on any of these issues and the statutory 30-day period
referred to in the Labour Relations Act 66 of 1995 (“the LRA”) expired on 30 November 2020.
SAA has tried over many years to address the negative impact of the Regulating Agreement with SAAPA without success. In November 2019, after
consulting with the Department of Public Enterprises, SAA launched an application in the Labour Court and in The High Court to declare the
Regulating Agreement unconstitutional, unlawful and invalid and permitting the Agreement to be terminated on reasonable notice. These
applications are still pending.
The BRPs noted, “We agree that the Regulating Agreement, which we have asked to be terminated is unlawful and unconstitutional and as a
consequence of seniority provisions, indirectly and unfairly discriminates against pilots on grounds of race and gender”.
The agreement does not comply with the Companies Act 71 of 2008,as amended (“the Companies Act”), the Public Finance Management Act 1 of
1999 (“PFMA”), nor the supply chain policy of SAA regarding, amongst others, the procurement process of hotels for pilots.
“The new agreement is intended to remove the largesse of the Regulating Agreement, because the Regulating Agreement confers very extensive
and lavish benefits on SAA’s pilots”, noted the BRPs
The lock-out means that SAAPA’s members will be excluded from SAA’s workplace with effect from 12h00 on Friday, 18 December 2020 until such
time that SAAPA accepts the demands made in the lock-out letter, namely:
1) termination of the Regulating Agreement and all other collective agreements concluded between SAA and SAAPA

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2) acceptance of the new terms and conditions of employment for pilots reflected in the proposed collective agreement, and a severance
payment of one (1) week per each completed year of service, in accordance with the BCEA which will apply to all pilots and to all future
pilot positions in any restructured SAA given effect to in terms of section 189 read with section 189A of the LRA; and
3) acceptance of the new salary scales for Captains and First Officers, hence all pilots.
SAAPA’s members will not be entitled to or paid, accrue or receive any remuneration or benefits during the exclusion and for the duration of the
lock-out.
SAAPA’s members will continue to be excluded and will not be paid in pursuance of this lock-out until the terms of this lock-out is accepted by
SAAPA.
“We have spent a lot of our time negotiating compromises with all of the relevant stakeholders of the airline. The proposed new terms and
conditions are fair and competitive for a regional, African airline. In fact, SAA has among the highest cost base in terms of pilots salaries, meal
allowances, leave and sick pay and travel rebate benefits internationally. This cannot continue if the business rescue of SAA is to succeed. We are
hopeful that the pilots also appreciate that compromise is required from all to create a chance for SAA to fly again, and that they will strongly
consider accepting the terms of the lock-out”, concluded the BRPs.
ENDS
Louise Brugman, 0835041186 on behalf of the SAA joint rescue practitioners, Les Matuson and Siviwe Dongwana
Notes to editors
Below a summary of the old agreement vs new proposals
Old agreement highlights New agreement highlights
Regulatory Agreement (RA) is New agreement, which constitutes a Collective

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unconstitutional – Evergreen contract
RA is an evergreen collective agreement (not
terminable according to a binding arbitration
award) entered into between SAA and SAAPA
in 1988. The RA regulates the terms and
conditions of employment of pilots and
contains volumes of onerous provisions on
SAA.
Evergreen nature is in breach of S 23(4) of
LRA, which does not contemplate or permit
collective agreements which have no fixed
term. i.e does not permit evergreen
collective agreements
Agreement, is a 3 year agreement, before
reviewed or amended with terms of notice. All
other terms and conditions of employment
are terminated and are solely regulated by this
Agreement.
Retrenchment of pilots
The effect of the agreements with the SAAPA
is that SAA will not be able to effect
compulsory retrenchments or changes to
terms and conditions of the pilots as it could
with other, non-flying, employees by the less
complicated application of section 189 and
section 189A of the Labour Relations Act
(LRA).
RA is unconstitutional
RA precludes and impedes SAA achieving

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meaningful and expeditious transformation,
in breach of the Constitution and the
Employment Equity Act 55 of 1998. In terms
of the RA, the principle of seniority rigidity
controls all elements if the manner in which
pilots are employed and dealt with at SAA,
including promotions. This operates to the
detriment against white women, black,
coloured and Indian men and especially
black, coloured and Indian women.
Every pilot who flies for SAA now or in the
future, whether currently employed or
employed at some time in the future, will join
the Seniority List and will receive the benefits
of the Collective Agreements which then
exist.
Dealing with pilot as per LRA
Considering the fact that Government has
taken a decision to find a strategic equity
partner (SEP) for SAA, the RA in its current
form, combined with the scope and
succession clauses, will no doubt make SAA
less attractive to potential partners.
Salaries Salaries of all pilots to be reduced by 50%. This
will be more in line with the South African
Market. Average pilot salary is R2.9 million

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going up to as much as R4.6 million for senior
captains
Leave
40 days leave
180 sick days leave a year
32 days continuous days per annum
No leave shall be encashed other than at
termination of employment.
36 days during a 3 year sick year leave cycle
and 12 days per annum for Upper Respiratory
Tract Infections.
Per diem allocation
Currently up to $155 a day depending on the
destination
Reduced to $70 a day regardless of destination
35 Notch system
Notch system which is on average a 2 to
2.5% of increase on top of in annual salary
regardless of performance
The notch system is to be removed with the
new agreement that entails 3 anchor points of
salary: Entry, Median and Maximum
Flight and duty limitations
Pilots fly an average 55 hours a month prior
A pilot’s ordinary hours of work will be subject
to the following CAA limits:
(a) 100 hours in the preceding 30 calendar
days,
(b) 300 hours in the preceding 90calendar

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to business rescue days,
(c) 1000 hours in the preceding 365
calendar days,
(d) Subject to a limit of 900 hours in any
calendar year
Overtime
After 68 hours of flying the then earn extra
flight pay / overtime rates
(competitors are to fly at about 80+ hours
per month)
After 78 hours of flying hours on narrow
bodies and 87 hours for wide body. This is a
far more productive use of pilots flying time
Max hours per month are 100 , 3000 hours in
3 months and 1000 hours in 12 months as per
the CAA regs
No pilot shall be allowed to opt out of working
overtime.
Check and training pilots
Check and Training Pilots got a flat allowance
every month which goes up with salary
increases automatically. They were paid the
allowance monthly regardless of how many
activities were related to check or training.
Didn’t need to undertake the check training
system and yet were still paid for it
The Allowance shall be paid monthly and shall
be per activity.
The allowance shall increase in line with any
agreed annual salary adjustment
Influence on decision for the business
The RA effectively removes core elements of
Fiduciary duty returned to board

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decision-making from the board and
management of SAA and precludes SAA from
giving effect to its fiduciary duties. This is in
breach of the Constitution, and the
Companies Act 71 of 2008. The effect of the
Regulating Agreement is that SAA is
precluded from acquiring airlines, merging,
wet-leasing/ Dry-leasing Crew and aircraft
without the consent of SAAPA
Hotel choice
The RA also subjects key SAA procurement
decisions such as which hotels to contract
with to the control of SAAPA in that SAAPA is
entitled to select the short-list of hotels from
which SAA can choose and even within this
short-list, SAA is required to take SAAPA’s
preferences into account. It requires SAA to
act in breach of Treasury instructions – such
as requiring SAA to accommodate pilots and
crew in four- or five-star hotels when the
Treasury instruction requires that three-star
hotels be used.
This is in contravention of the PFMA and
SAA’s supply chain policy – therefore
unlawful and unconstitutional
Hotel choices to be set in policy document and
in accordance with the Public Finance
Management Act and SAA supply chain policy

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