South African Airways strike set to intensify after management withdraws offer

After offering a 8% salary hike and the setting up of a team to look into private contracts, the management suddenly declared it didn’t have the funds for the former and mandate for the latter

November 21, 2019 by Peoples Dispatch
The unions representing the workers said they will escalate the strike to the subsidiaries of South African Airlines.

The strike by workers of South African Airways (SAA) which began on November 15 is set to continue. This follows the management withdrawing an offer acceptable to the unions. After the management’s volt-face, workers of SAA’s catering subsidiary, Air Chefs, are planning to join the strike. Unions are seeking to get workers of more SAA subsidiaries to join, as a wave of secondary strikes is set to rock the airlines.

At the meeting between unions and the SAA management, which went on till early morning on November 20, the management tabled an offer which included a 6.5% wage hike and the establishment of a task team to review all the contracts given to private companies.

The unions have accused these companies of inflating their profits by overcharging SAA for the outsourced services. This, according to the unions, is the main reason for the state-owned airline’s financial woes. There are also allegations of corruption in handing out such contracts.

The National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA), which together represent over half of all the SAA employees, had originally demanded a wage hike of 8%. They had also demanded the immediate cancellation of outsourced contracts, to be replaced by the insourcing of all workers involved in security, cleaning, IT, ground-handling, logistics etc.

Forensic reports by global auditing firm Ernst and Young have also identified and highlighted the major contracts that are adversely impacting the SAA’s balance sheet. The unions had demanded immediate action on the basis of this report.

After one of SAA’s subsidiaries, SAA technical, cancelled its R22 million per year contract with KWE and insourced the workers, the company has been saving R11 million a year, the unions pointed out as an example.

Given the rate at which these contracts have been financially affecting SAA, the unions had demanded urgent action and argued that it is not necessary to form a task team to investigate this, because Ernst and Young had already done so.

At the meeting, the management yet again offered to set up a task team to investigate all the contracts and identify other areas where costs could be saved. The unions were prepared to accept the offer, and settle for a 6.5% wage hike. It seemed like the strike was finally coming to an end.

However, “at the eleventh hour they just withdrew the offer, and suddenly told us that they don’t have a mandate [to establish the task team] and they don’t have the money [for the 6.5% hike],” NUMSA’s national spokesperson, Phakamile Hlubi Majola, told People’s Dispatch.

Reverting to its earlier position, the management refused to commit to anything but a 5.9% wage hike. “As a result, the strike continues. We will intensify the strike. We’ve already given a notice of secondary strike at Air Chefs”, Hlubi Majola said.

Times Live reported that she also added, “Comair has a strike certificate. We are coming after Acsa (Airports Company SA). If Acsa shuts down, none of the planes are moving.”

“From what we can gather, they have a problem with our demand for the review of all contracts by a task team” because it will expose the corruption, she added. “It is very clear to us that we are dealing with people whose goal is to destroy the airline. They want to continue to steal from the airline” and pass on the bill to workers by firing them.

“SAA’s problem is not labor,” Hlubi-Majola insists. Even if every worker at SAA is fired, “the airline will still collapse. Its biggest cost driver is the R25 billion per year spent on procurement, which has been exposed in various forensic reports to be corrupt.”

Unions are willing to negotiate with the management only if the offer of providing a 6.5% wage hike and establishing the task team to review all contracts is brought back on the table.