Denel “discussing” court-ordered salary payments with attorneys

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Denel is in discussions with attorneys representing staff over unpaid salary claims, according to Public Enterprises Minister Pravin Gordhan.

Replying to a question from Economic Freedom Fighters (EFF) parliamentarian Omphile Maotwe about one court hearing involving Denel and non- or short salary payments, he said three of 42 current and former employees who the court ruled in favour of in May this year were paid out before the court ruling. “They failed to inform their attorneys,” his written reply to her reads.

Maotwe indicates in her question the employees are owed R13.2 million in unpaid salaries going back to 2020.

“The amount owed to the remaining 39 claimants differs from person to person,” Gordhan’s response reads “due to some having received part-payment from the date of the court order to date”.

“To that end, Denel has been in discussions with the attorneys representing the claimants with a view to reconcile the records and agree on the legitimate amounts owed to each individual.

“Part of our discussions with the attorneys includes agreeing on a date by which the amounts can be paid, in view of Denel’s ongoing liquidity challenges.”

The May ruling was handed down by the Gauteng North High Court in Pretoria in favour of a group reportedly calling themselves the Denel Employees Association (DEA) and not members of any trade union.

The beleaguered State-owned defence and technology conglomerate is under fire from a number of labour unions including NUMSA (National Union of Metalworkers of SA), Solidarity and UASA (United Association of SA). UASA is due back in court on 26 July.

Denel owes employees more than R830 million in unpaid salaries. It is attempting to restructure and under a new five year turnaround strategy. It aims to save R250 million annually by restructuring into two divisions, from its current six operating units, 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 rejoined as chief restructuring officer in the process, which Denel believes will put it back on the path to sustainability.



Denel had been allocated R3 billion by government to settle ballooning interest payments. This money cannot be used for salaries as it is ring-fenced for debt repayments. In February, Gordhan said that nearly R1 billion held in a medical fund is becoming available to Denel, which can use it to meet its obligations.