The National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) welcomed the Labour Appeal Court's decision to dismiss an appeal by South African Airways' (SAA) Business Rescue Practitioners (BRPs). The BRPs had wanted to overturn a previous ruling preventing them from retrenching SAA employees without a published business rescue plan. The LAC upheld the earlier decision, finding that the Companies Act does not allow BRPs to retrench workers without a plan addressing the challenges threatening the company's survival. NUMSA and SACCA were pleased with the outcome, which sets guidelines confirming BRPs must develop rescue plans before cutting

1. NUMSA ANDSACCA WIN AGAIN – THE BRP’SATTEMPT TO APPEALTO THE LAC ON RETRENCHMENTS AT
SAA HAS BEEN DISMISSED
9 July2020
For Immediate Release
The National Unionof Metalworkersof SouthAfrica(NUMSA) andthe South AfricanCabinCrew
Association(SACCA) welcomethe decisionbythe LabourAppeal courtto dismissthe appeal launchedby
the BusinessRescue Practitioners(BRPs)atSouthAfricanAirways(SAA).The BRPswantedthe LACto set
aside an earlierdecisionof the LabourCourtinMay that theymaynot proceedwithretrenchmentsat
SAA withouta BusinessRescue Plan.Atthe heartof the LabourAppeal Courtapplicationisthe question,
whenmay a BusinessRescue Practitionercommence formalretrenchmentproceedingsundersection
189 of the Labour RelationsAct?
Background
In May NUMSA and SACCA wenttothe LabourCourt to seekanapplicationtopreventSiviwe Dongwana
and LesMatuson, the BRPs at SAA,fromproceedingwithretrenchmentsatthe airline.We wonthe case
and the followingorderwasmade:
1. SAA and the BRP’sconductin issuingasection189(3) notice to consultisprocedurallyunfair
2. SAA and the BRP’sare directedtowithdraw the notices
The BRPs were unhappywiththatdecisionandtheyattemptedtoappeal thisrulingatthe LACon the
30th of June.Todayjudgmentwashandeddowninourfavourwiththe LACdismissingthe application.
We arguedthat section136(1) of the CompaniesActregulatesemployees’rightswhencompaniesare
placedunderbusinessrescue anditisveryclearonthe rightsof employees:
“136. (1) Despite anyprovisionof anagreementtothe contrary—(a)duringacompany’sbusinessrescue
proceedingsemployeesof the companyimmediatelybefore the beginningof those proceedings
continue tobe so employedonthe same termsandconditions,excepttothe extentthat—(i) changes

2. occur in the ordinarycourse of attrition;or(ii) the employeesandthe company,inaccordance with
applicable labourlaws,agree differenttermsandconditions;
And(b) any retrenchmentof anysuchemployeescontemplatedinthe company’sbusinessrescueplan
issubjectto section189 and189A of the Labour RelationsAct,1995 (Act No.66 of 1995), and other
applicable employmentrelatedlegislation.”
The LAC upheldthe decisionof the LabourCourtwhichfoundthatsection136(1) or Chapter6 of the
CompaniesAct,doesnotempowerabusinessrescue practitionertoretrenchemployeesinthe absence
of a businessrescue plan.
Our legal representative,Advocate TembekaNgcukaitobi SC,summedupourcase crisplywhenhe said
the following:
“How do youconsultonretrenchmentwhenthere isnoplan?How do youknow where tocut costs?
That is senseless.Itmustbe guidedbythe plan.The businessrescue planisthe central vehiclefor
decidingthis.”
Althoughthe appeal washeardafterthe BRPsat SAA finallypublishedaplan,itwasimportantforus to
defendthe decisionof the LabourCourt, because ithad far reachingimplicationsforworkersandthe
case isimportantforsettingdownclearguidelinesforBRPsas a whole.There are manycompanies
whichhave filedforbusinessrescue inSouthAfrica,citingthe covid-19pandemicasthe reason.This
judgmenteffectivelymeansthatBRPsmaynot be usedby Employerstoprune the businessbycutting
jobs,andthe fundamental challengesthreateningthe company’ssurvival mustbe addressedinthe BR
plan.
The purpose of BR isto assess,inan expeditedway,whetherthe businessiscapable of beingrescued
and if so,to produce a businessrescue planwithoutdelay.The courtconfirmedthatthe purpose of
businessrescue isthe efficientrecoveryof financiallydistressedcompanies,inamannerthat balances
the rightsand interestsof all stakeholders –ultimately,the maindriverof businessrescue isthe
retentionof jobs.
Dongwanaand Matusonhave alreadygone againstthe Act inmany respects,byfailingtodevelopa
businessrescue planwithin the stipulatedperiod,whilstchargingexorbitantfees,approximatelyR36
millionintotal,atgreatcost to the tax payer.Theyhave alsotakennumerousdodgydecisionswhich
have done more harm than goodand worsenedthe situationatSAA.A clearexample of thiswasthe
recklessdecisiontocutroutes,and theirrefusal tocancel the leasesonthe planesafterthe routeswere

3. cancelled.SAA hasnowincurredanadditional billof R30 billionforplaneswhichwere parkedandnot
beingused!
We are pleasedthatthe LAC foundinour favour.Itwas importantforus as unionstodefendthe
decisionof the LabourCourt because BRPsare not a law untothemselves.Theycannotbe given
unfetteredpowertosimplycutjobsas theywish,withoutadheringtothe law whichgovernstheir
existence.NUMSA andSACCA continue todrive anagendafor the workingclass,byputtingthe interests
of workersandtheirfamilies’first. Thiscourtvictoryisanotherexample of ourcommitmentto
defendingworkersand protectingtheirrights.
ThisstatementwasissuedbyNUMSA and SACCA by:
Zazi Nsibanyoni-Mugambi
SACCA President
IrvinJim
NUMSA General Secretary
For more information,please contact:
Phakamile Hlubi-Majola
NUMSA National Spokesperson
0833767725
phakamileh@numsa.org.za
[7:39 PM, 7/9/2020] Yaas!: