Trade union UASA has said Denel’s board is failing to undertake its responsibilities and leaving workers in the lurch with unpaid salaries.
Staff at Denel haven’t received their full pay since eight months ago, when the salaries for end of May last year were paid, the United Association of South Africa (UASA) said over the weekend.
UASA and Solidarity instituted contempt of court proceedings against the directors of Denel after the state-owned weapons manufacturer did not act on a court order dated 4 August 2020 to honour all outstanding contractual and statutory obligations towards UASA members in its employ for the months of May, June and July 2020.
In early December the case was postponed, affording the board members further opportunity to file affidavits in response, but despite being given this second chance, the board members failed to disclose the true financial position of the state-owned weapons manufacturer, UASA said.
On 28 January UASA argued in court that the directors failed to place enough credible evidence before the court to make a finding that the company was financially unable to comply with the court order of 4 August 2020 and that the board members stood indifferent to compliance and failed to do everything necessary to comply with the order. Judge Andre van Niekerk reserved judgment.
“UASA urges Denel management to comply with the judgment as soon as it is issued,” said the union’s Rick Grobler.
According to Stanford Mazhindu, spokesperson for UASA, “Denel Corporate decided, immediately after the first court hearing and judgement, that each company division is on its own and must generate their own income, thereby abdicating their responsibility”.
A union leader at the company said unless the state-owned weapons manufacturer gets a cash injection, there is no way they can trade themselves out of this situation. Denel continues to suffer from a liquidity crisis, with production at 30% of capacity, and made a R1.9 billion loss in the previous financial year.
Denel workers told UASA that January salaries had not been paid. Many said their rent and insurance policies are behind as a result of non-payment; some have lost their houses or rental homes and others have been pushed into debt.
“The workers said they had been informed that the banks will no longer approve payment holidays. Workers who have not yet been paid for January don’t have the means to travel to work and can barely feed their families. Many can’t put food on the table and were asking about food parcels,” the union said.
The employees said when the Temporary Employer/Employee Relief Scheme (Ters) was still active, it helped them get by but since the scheme ended they are back to receiving less than half of their pay each month although they are required to report to work every day.