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Bid by SAA business rescuers to overturn retrenchment ruling is dismissed

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Court finds that issuing retrenchment notices without a business rescue plan in place would be premature and unfair

A SAA plane is towed at O.R. Tambo International Airport in Johannesburg, South Africa, January 18, 2020. Picture: REUTERS/ROGAN WARD

The court said section 150 of the Companies Act was clear that the business rescue plan had to precede any retrenchment and “puts paid to any suggestion that the retrenchment process may commence without the plan”. The airline, which is not financially viable, has been in business rescue for six months. But the process has not been completed due to ongoing delays in finalising the business rescue plan.. If the plan is rejected and an alternative not proposed, SAA will be placed in provisional liquidation.

The change means that all trade unions, including the SAA Pilots Association, have accepted the terms of the voluntary severance package offered by the airline. However, irrespective of the mootness of the application, it was necessary for the court to consider the appeal because it raised novel legal issues that were of public importance.

 

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