Essential Business

Groundforce staff face salary delays

 In Aviation, Companies, News, Tourism

Just as Portugal expects to welcome thousands of UK and other visitors on holiday in the country, the staff working for the baggage handler that operates at its airports are facing delays to their salaries this month.

The delays in payment at troubled company Groundforce which employs some 2,400 staff and could threaten industrial action at a critical time as Portugal opens up to holidaymakers, has prompted a meeting between the infrastructures minister Pedro Nuno Santos and the baggage handling union on Monday.
The minister said that the company didn’t have the money to pay the workers’ May salaries despite guarantees given by the majority shareholder Alfredo Casimiro previously stating that the wages for May were assured.
On the other hand, the minister made it clear that there would not be any redundancies as a result of insolvency.
Pedro Nuno Santos, who is the minister for infrastructure and housing, called the unions representing Groundforce for the Monday meeting in which he informed them that the national carrier TAP would press ahead with the baggage handling company’s insolvency.
TAP justified the decision for various reasons, starting with the deterioration in Groundforce’s financial situation.
At the end of the day, TAP says there were simply not enough funds in the kitty to pay the staff despite the holding company owner Pasogal having guaranteed that there was the cashflow to pay them because of the return of flight activities and a rescheduling payments plan agreed with suppliers.
However, that seems not to be the case and the staff now face delays in their salaries being paid.
When the salaries were last paid, €7 million had to be freed up to make the April payments thanks to a baggage machinery sale and rental agreement between Groundforce and TAP.
However, Groundforce decided unilaterally that these contracts were invalid and ineffective so that the first payments of €462,000 which should have been paid on 30 April, failed.
This is, furthermore, also one of the reasons for receivers being called in. TAP says Groundforce’s majority shareholder “lacks the necessary conditions to reestablish the confidence of its creditors” and cites the “non-existence of credible solutions inductive to obtaining finance” after failing to get credit or a guarantee from Caixa Geral de Depósitos and the Portuguese development bank Banco Português de Fomento.
It was against this backdrop that TAP as creditor successfully applied to the courts for a writ that would safeguard the viability and sustainability of its operational activities at Portuguese airports while not firing staff.
In other words TAP, which means the government, will take over the running of Groundforce in order to protect the airline and its operations relying on business trips and tourism which are so vital for the economy.
Alfredo Casimiro who owns Pasogal, the majority shareholder in Groundforce, says that he will use all legal mechanisms to defend the interests of the handling company, claiming that in seizing the company, TAP and the government will not solve anything. On the contrary it will, he says, only make it worse and put off finding a solution.
In a communiqué, Casimiro, through Pasogal which has a 50.1% share of Groundforce states, “Groundforce is not a problem for TAP, rather TAP is a problem for Groundforce. None of the serious problems that TAP is facing will be resolved at the cost of Groundforce.”


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