Nationwide Neglected to Pay Insurance Benefits

May 10 - The actions of Nationwide? management has been described as "criminal" after a trade union representing some of the liquidated budget airline's workers accused the company of deducting insurance that was meant to cover health insurance policies, and conveniently pocketing the money instead of transferring it to Discovery Health.

Andre Venter, a divisional manager with the trade union, United Association of South Africa, that represents a quarter of the 800 staff members of the ill fated airline company said: "This now effectively renders them without insurance cover. It is short of being criminal that while it is now clear that the management of the company knew full well what the situation was, that they still deducted the contributions from the employees' paychecks and neglected to pay it over."

Venter claims that Nationwide staff were first made aware of the issue when they were told by doctors and pharmacies that their cover had been suspended and bills could therefore not be paid.

A Nationwide representative, however, denied these claims and said: "I have no idea where they get a story like that from. We were completely up to date until we were provisionally liquidated."

Nationwide is facing liquidation as it was forced to admit financial troubles after the last increase in fuel prices. The airline's craft were grounded for eight weeks last year as each one needed to be thoroughly checked after an engine fell out of one its planes during takeoff on a routine flight from Cape Town.

It is not quite clear what will happen regarding the medical coverage of Nationwide's staff, and whether some kind of agreement could be reached with Discovery Health, a subsidiary of Discovery Holdings.