Legal lifeline for Denel as employees go without pay


A legal lifeline has been cast to beleaguered Denel by the Labour Court with a postponement to allow the State-owned defence and technology conglomerate to “fully comply” with a court order in respect of meeting employee salary and benefits payments.

The United Association of SA (UASA), one of at least two trade unions acting on behalf of members employed at Denel, expressed its disappointment at Acting Labour Court judge Moses Baloyi’s Friday 23 July decision to postpone the UASA/Denel proceedings to 2 December.

This, UASA’s Abigail Moyo said, is “disappointing” adding in previous court appearances Denel “never clearly specified how it plans to meet contractual obligations to employees and how it will compensate them for work done”.

Denel employees at divisions and some associated companies have been short-paid and in some instances not paid for over a year with the same applying to employee benefits including medical aid and pension fund contributions.

The Florida, West Rand headquartered trade union initiated legal action last year after Denel failed to comply with a court order regarding outstanding employee contractual matters for May, June and July. These were in respect of PAYE (Pay as You Earn) income tax, UIF (unemployment insurance) and pension/provident fund payments.

On 4 August last year, the Labour Court ruled in favour of UASA and Solidarity, ordering Denel to pay  union members outstanding cash portions of salaries and third-party payments. Denel was ordered to make payments within seven days. Denel failed to honour the Labour Court order and unions launched an application for Denel and its directors to be held in contempt of court. The Labour Court gave Denel a return date of 3 December 2020 to show cause why it and its board of directors should not be held in contempt for failure to comply with the August court order.

Denel was subsequently given further extensions, including to 23 July, to come up with a practical programme to comply with the August court order. The Court also ordered Denel to present it with an affidavit, reportin progress in complying, at least ten days before Court reconvened.

According to Moyo, Judge Baloyi last week ruled non-compliance by Denel needed “further judicial supervision” to ensure implementation of the court order.

“UASA is concerned about continuous postponements. UASA’s legal representative argued in court judicial supervision should remain in place as Denel had not complied with the court order for over a year. Baloyi ordered Denel to file an affidavit setting out steps to comply with the court order 10 days before the 2 December court date.

“Many employees at the SOE have not been paid in full or at all since May 2020 and while the company expects workers to report for duty, it shows little progress toward finding a solution to the crisis,” Moyo said.

In a previous statement condemning non- and short salary payments UASA said: “The state of affairs at Denel is long past its sell-by date and is an embarrassment to the state as well as South Africa”. Public Enterprises Minister Pravin Gordhan who is responsible for SOE’s is on record as saying Denel’ salary situation is unfortunate and regrettable.

There was, at the time of publishing, no reaction from Solidarity, the Centurion-headquartered trade union which has a court order in its favour to attach over R10 million worth of Denel assets. Funds realised from the asset sales will go to employees in, at least, partial settlement of the amounts owed to them.