Denel will be back in court next month to face an application brought by trade union UASA in April to honour outstanding salaries.
UASA was in the Labour Court on 2 June over the matter, and is seeking full remuneration for its members employed by Denel who are owed salaries from August 2020 to date.
Abigail Moyo, UASA spokesperson, stated that the Labour Court yesterday rejected Denel’s technical points raised for further payment delays.
In February, Public Enterprises Minister Pravin Gordhan revealed that nearly R1 billion held in a medical fund is becoming available to Denel, which can use it to meet its various obligations such as paying tax.
UASA is hoping to get this money allocated towards salaries, and went to court to this effect. Denel had until 12 April to provide the Labour Court with the exact amount owing to UASA members.
“Since the R1 billion would comprise excess funds from the Denel Medical Trust Fund and therefore belongs to the workers, UASA believes the money should be used to pay employees who have not received salaries for a long time,” Moyo stated.
She added that after hearing arguments from both sides on Thursday, Judge Andre van Niekerk ruled that UASA’s application be postponed to the matter set down on the unopposed Court Roll for 26 July 2022, irrespective of whether Denel opposed the application or not.
Denel was ordered to provide updated outstanding remuneration amounts for May and June 2022, which will be included in UASA’s claim by 14 July 2022. Should Denel wish to oppose the matter, they must file all relevant papers by 5 July 2022, according to UASA.
Judge Van Niekerk’s ruling required all the updated figures, including the May and June figures, be verified so that if accepted by the Court, execution may be done without further delay. He rejected Denel’s argument that the employees must grant Denel the opportunity to restructure before making payments. The Labour Court’s ruling is intended that the process scheduled for 26 July 2022 should bring finality to the outstanding figures, the trade union said.
“UASA will continue its court battle against Denel until all outstanding monies owed to UASA members employed by the state-owned enterprise are paid. UASA members working for Denel have survived on little to nothing for over two years now, and it is about time that the company starts acting in the best interest of its workers and pays what is due to them,” Moyo concluded.
Denel owes workers more than R830 million in unpaid salaries. It is attempting to restructure and under its new 5.Y turnaround strategy. It aims to save nearly R250 million a year by restructuring into two divisions (from six operating units currently), and raise R2.5 billion by selling stakes in Rheinmetall Denel Munition (RDM), Hensoldt South Africa, and some of its property portfolio. Former CEO Riaz Saloojee has joined the firm again to assist in the restructuring process, which the company believes will put it back on the path to sustainability.