On 8 February 2021, the National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) brought an urgent application to the Labour Court to seek the court to rule that South African Airways (SAA) business rescue practitioner pay to the unions’ members, who did not sign a settlement agreement with SAA, the same benefit accrued to members who had entered into a settlement with SAA for three months’ back pay without waiving their rights to claim the rest of any claimed back pay.
In making their claim, both Unions argued that the conduct of the business rescue practitioner fell foul of fairness and the rescue plan in denying members back pay who refused to enter into a settlement agreement.
SAA argued that the business rescue practitioner followed instructions which required employees to agree to a compromise (in waiving any further claim for back pay) prior to making payment. SAA argued, further, that the issue of whether the business rescue practitioner did or did not comply with the rescue plan lay outside the jurisdiction of the Labour Court, as it relayed to compliance with the terms of the Companies Act. SAA, lastly, argued that the Unions’ members who did not sign the settlement agreement did not lose their legal right to claim for full back pay.
In dismissing the application, the judge found that the Labour Court lacked jurisdiction as the actions taken by the business rescue practitioner was not an action taken by the employer. The judge noted further that the conduct of the business rescue practitioner was not a matter which fell to be regulated by the Labour Relations Act, the Basic Conditions of Employment Act or any other employment-related legislation.
In any event, the judge noted that even if the Labour Court had had jurisdiction, he did not believe that SAA had acted unlawfully. The judge noted that the offer to settle was made to all employees equally, which did not support the allegations by the Unions that there was any discrimination against employees who refused to compromise their claims. It was specifically noted that all employees who did not enter into a settlement in the matter herein did not lose their right to claim the full amount of back pay subject to the provisions of the Companies Act.
Article by: Avishkar Singh
Dispute Resolution Official – Durban