Denel will pay its staff May salaries after all, the National Union of Metalworkers (Numsa) has said, after Denel indicated it couldn’t pay May salaries and possibly not June or July wages either.
Numsa on Friday (29 May) said it met with the senior management of Denel about the non-payment of salaries. “We are pleased to inform our members that we secured a commitment that our members will be paid this month especially the lowest paid and the details will be announced by management in due course.”
Denel on 19 May said it could not pay salaries for May and wages for June and July were at risk.
CEO Danie du Toit told workers that since the easing of the lockdown, “we have been allowed to bring just 30% of our workforce back to production and have 19% of our people working from home while the remaining 51% cannot work at all. This has happened when we need all hands on deck to secure a successful turnaround for the business”.
Du Toit said the liquidity challenges foisted on the group by corruption and state capture since 2017 when added to the impact of COVID-19 “have put Denel further in the red”.
Following the announcement, unions said they would take action. Late last week the United Association of South Africa (UASA) said it was going to take Denel to court over the company’s failure to pay employees’ salaries on the agreed date of 25 May.
“Denel is therefore in breach of its employment contracts,” the union said in a statement. It subsequently set up a coronavirus relief fund for its members who have been affected by the non-payment of salaries.
Irvin Jim, Numsa General Secretary, said on Friday that “as Numsa we have made a substantial submission where we are calling for more engagement, not just with management, but also with the board of Denel and the shareholder. We are very clear that we must develop a vibrant, viable plan for Denel. It is also our view that there should be no holy cows in arresting all challenges that affect the business.
“The same issues we raised with management, we will raise with the Denel board and the shareholder and this includes our call for continued engagement to ensure that this company has a viable long term economic plan for the future. Our members and their families have suffered as a result of this delay. This is not the first time Denel has struggled to pay salaries, and it cannot continue any longer. A sustainable solution to Denels challenges must be found, and it will require the involvement of all stakeholders if we are to find a solution to this crisis,” Jim concluded.