NEWS & ANALYSIS

Comair to postpone publication of BRP plan – NUMSA

Union welcomes this decision as they’re yet to be consulted as majority union as required by Companies Act

NUMSA notes decision by Comair to postpone the publication of the BRP plan

24 June 2020

The National Union of Metalworkers of South Africa (NUMSA) has noted that the Business Rescue Practitioners at Comair, Shaun Collyer and Richard Ferguson have postponed the publishing of the business rescue plan until the 30th of June. In the communication which they issued to employees they are requesting consent from creditors to postpone the publishing of the business rescue plan. They say they have received a “non-binding Expression of Interest for cash funding by means of debt, equity and post-commencement finance from an interest group” which they are exploring, hence the request for the postponement.

We would not be surprised if the decision to postpone was also motivated by the communication from our attorneys putting them on terms with respect to the manner in which they have proceeded with the entire BRP process. We have warned that if they do not postpone the publication of the plan, we will take them to court because they have failed to consult us as the majority union ahead of the publication of the plan as demanded by the Companies Act. In developing this plan, they have deliberately sidelined the majority union and if they had published the plan yesterday as planned, it would have been a plan which does not have our input.

The BRPs have also failed to pay employee salaries in full since the end of April and workers and their families’ are suffering as a result.

There is no excuse for this, they have an obligation in law to pay workers’ salaries, and the covid-19 lockdown regulations, do not excuse them from this legal duty. A recent judgment in the Gauteng Local Division of the High Court in matters concerning Mezepoli Melrose Arch (Pty) Ltd, MezepoliNicolway (Pty) Ltd, Plaka Eastgate Restaurant CC and Azania Hospitality (Pty) Ltd and Brand Kitchen Hospitality (Pty) Ltd (respectively case numbers 2020/10556; 2020/10555; 2020/10955; and 2020/10956), where Weiner J held that:

“… The Regulations which were in force during level 5 of the National Lockdown make it clear that employers are not excused from their obligation to pay their employees’ salaries …”

The BRP’s also continued to consult on the section 189 retrenchment process, which was started on the 23rd of March 2020 without having completed a business rescue plan. NUMSA and SACCA went to court over this issue in relation to SAA and we won in the Labour court. The court agreed with us, and ordered that BRP’s must publish a business rescue plan, before they can continue with retrenchments at the airline.

Section 136(1)(a) of the Companies Act provides absolute protection to employees (albeit for a limited period), in respect of job security and retention of their conditions of service during the course of business rescue proceedings, as opposed to what pertains once a business rescue plan has been published which contemplates retrenchments, in which case Section 189/189A of the LRA is triggered. It is quite indefensible and indeed legally impermissible for the BRPs to proceed on the back of a pre-Business Rescue and outdated Section 189A Notice, and thereby circumvent their obligations to consult properly.

Aluta continua!

The struggle continues!

Issued by Irvin Jim, NUMSA General Secretary, 24 June 2020