EMPLOYEE TOOLKIT

23 April 2020
 Purpose of this Employee Toolkit

This employee toolkit should be read in conjunction with the

proposed severance agreement offered by the business rescue
practitioners to all employees of SAA.

The main purpose is to assist employees of South African

Airways (SOC) Limited to make important decisions about all the
options available to them.

2
 Difference In Ranking of Potential Employee Claims Under Two Scenarios

UNDER STRUCTURED WIND-DOWN UNDER

1 AS PART OF BUSINESS RESCUE
2 LIQUIDATION

Priority 1 Business Rescue Costs Liquidation Costs

Secured pre-commencement creditors in respect of their

Priority 2 secured assets
Business Rescue Costs

With a signed Employees claims which arise subsequent to the Employees claims which arise subsequent to the With a signed
agreement Priority 3 commencement of business rescue proceedings commencement of business rescue proceedings agreement

Secured post-commencement creditors in respect of their Unsecured PCF (R5.5bn + interest) & post
Priority 4 secured assets commencement creditors not paid

Unsecured PCF (R5.5bn + interest) & post Preferent portion of Employee claims Without a signed
Priority 5 commencement creditors not paid agreement
(see example - max R28,000 per Employee)

Amounts due to Employees which arose prior to

Priority 6 business rescue proceedings of 5 December 2019
South African Revenue Services (SARS)

Concurrent creditors (incl. the non-preferent portion and

Priority 7 Unsecured claims prior to 5 Dec 2019 e.g. SARS balance of Employees retrenchment package according
the BCEA)

Note: Employee • Should Employees accept a Severance Pay Agreement during the business rescue process, the severance pay will rank ahead of the PCF claims;
payment ranking • If Employees don’t accept the agreement during the period of Business Rescue, their pay-outs rank behind PCF); and 3
• The severance payments to employees are subject to the conditionality that there will be availability of cash.
UNDER LIQUIDATION WITH A SIGNED
SEVERANCE AGREEMENT
 Severance Pay under liquidation WITH a signed severance agreement?

An employee is entitled to submit a claim according to the terms in the signed severance agreement

UNDER
2 LIQUIDATION

The full amount in severance

Liquidation Costs

pay is treated as an employee Business Rescue Costs

claim which arose subsequent Employees claims which arise subsequent to the
commencement of business rescue proceedings

to the business rescue Unsecured PCF (R5.5bn + interest) & post

process initiated on
commencement creditors not paid

Preferent portion of Employee claims

5 December 2019 (see example - max R28,000 per Employee)

South African Revenue Services (SARS)

Concurrent creditors (incl. the non-preferent portion and

balance of Employees retrenchment package according
the BCEA)
 Leave Pay under liquidation WITH a signed severance agreement?

An employee is entitled to claim the leave pay due to him/her

UNDER
2 LIQUIDATION

The full amount in leave pay

Liquidation Costs

is treated as an employee Business Rescue Costs

claim which arose subsequent Employees claims which arise subsequent to the
commencement of business rescue proceedings

to the business rescue Unsecured PCF (R5.5bn + interest) & post

process initiated on
commencement creditors not paid

Preferent portion of Employee claims

5 December 2019 (see example - max R28,000 per Employee)

South African Revenue Services (SARS)

Concurrent creditors (incl. the non-preferent portion and

balance of Employees retrenchment package according
the BCEA)
 Notice pay under liquidation and WITH a signed severance agreement

An employee is entitled to submit a claim according to the terms in the signed severance agreement

UNDER
2 LIQUIDATION

Notice pay is as an ex-gratia

Liquidation Costs

payment and treated as Business Rescue Costs

employee claim which arose Employees claims which arise subsequent to the
commencement of business rescue proceedings

subsequent to the business Unsecured PCF (R5.5bn + interest) & post

rescue process initiated on

commencement creditors not paid

Preferent portion of Employee claims

5 December 2019 (see example - max R28,000 per Employee)

South African Revenue Services (SARS)

Concurrent creditors (incl. the non-preferent portion and

balance of Employees retrenchment package according
the BCEA)
UNDER LIQUIDATION WITHOUT A SIGNED
SEVERANCE AGREEMENT
 Severance pay handled under liquidation WITHOUT a signed severance agreement?

An employee is entitled to claim the leave pay due to him/her under section Basic Conditions of Employment Act

UNDER
2
• Statutory preference is LIQUIDATION

given to severance pay Liquidation Costs

due, however this amount Business Rescue Costs

is restricted to Employees claims which arise subsequent to the

R12000,00. commencement of business rescue proceedings

Unsecured PCF (R5.5bn + interest) & post

commencement creditors not paid

• Note: the total preferent Preferent portion of Employee claims

(see example - max R28,000 per Employee)

portion of your claim may South African Revenue Services (SARS)

not exceed R28000,00. Concurrent creditors (incl. the non-preferent portion and
balance of Employees retrenchment package according
the BCEA)
 Leave pay handled under liquidation and WITHOUT a signed severance agreement

Example below

Preference is given to employees in 2 UNDER

LIQUIDATION
respect of statutory leave due to them
during the year of the insolvency or the Liquidation Costs

year preceding the insolvency. This

preference is restricted to a maximum Business Rescue Costs

amount of R4000,00. Employees claims which arise subsequent to the

commencement of business rescue proceedings

Should accumulative leave exceed the Unsecured PCF (R5.5bn + interest) & post
commencement creditors not paid
R4000,00 over and above the leave for Preferent portion of Employee claims
the year of the insolvency or the year (see example - max R28,000 per Employee)

preceding the insolvency, the balance of

South African Revenue Services (SARS)
your claim for leave pay will be
Concurrent creditors (incl. the non-preferent portion and
concurrent. balance of Employees retrenchment package according
the BCEA)
 Notice pay handled under liquidation and WITHOUT a signed severance agreement

Example below

UNDER
2 LIQUIDATION

Liquidation Costs

Notice pay is treated as Business Rescue Costs

concurrent and claimed as the Employees claims which arise subsequent to the

last priority as depicted in commencement of business rescue proceedings

the diagram below.

Unsecured PCF (R5.5bn + interest) & post
commencement creditors not paid

Preferent portion of Employee claims

(see example - max R28,000 per Employee)

South African Revenue Services (SARS)

Concurrent creditors (incl. the non-preferent portion and

balance of Employees retrenchment package according
the BCEA)