JOHANNESBURG (Reuters) – South Africa’s Labour Court ordered administrators trying to rescue cash-strapped South African Airways (SAA) to halt layoffs on Friday, siding with two trade unions who had argued in court that the process was unfair.

State-owned SAA has been fighting for its survival since entering a form of bankruptcy protection in December, with its fortunes deteriorating further when the coronavirus pandemic forced it to halt all commercial passenger flights and the government refused to provide further funding for turnaround efforts.

The administrators started consultations with unions in March about layoffs, but two unions – the National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) – said those consultations should wait until the administrators had presented a business rescue plan.

The Labour Court sided with the unions, ruling that the layoff notices were “procedurally unfair” and ordering administrators to withdraw them. Administrators are permitted to offer voluntary severance packages, the court said.

The administrators, who had suspended a deadline for staff to agree layoff terms while the Labour Court made its decision, said they were considering the judgment.

The administrators have until the end of the month to draft a rescue plan for SAA, which has not made a profit since 2011 and has received bailouts worth more than 20 billion rand ($1.1 billion) over the past three years.

Public Enterprises Minister Pravin Gordhan on Wednesday said the government wanted to avoid a liquidation or fire sale of SAA assets, preferring to see SAA restructured into a new airline.

SAA on Friday said that it will continue to operate repatriation and cargo flights “during the month of May and beyond”.

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