At least one Denel division – Dynamics – will not be paying staff this month because of “the client not honouring promises to make payment”.
This is according to an internal Denel Dynamics “Infogram” which starts by thanking staff of the missile and unmanned aerial vehicle (UAV) designer and manufacturer for continued support during what management terms “a very challenging time”.
The upcoming non-payment is in the wake of a miserable month for Dynamics staff who received a meagre 30% of their salaries at the end of June.
“The situation around us being able to pay salaries for July has not improved as expected. The unfortunate result is we are unable to pay salaries for July 2021, mainly due to the client not honouring promises to make payment after numerous attempts. We realise and regret the impact on employees and their families,” chief executive Sello Ntsihlele writes in the in-house employee communication.
He also tells Dynamics’ employees management is “working earnestly on debtors’ collections to secure money for salaries and third party payments. We are optimistic the situation will show some improvement in the following months”.
Ntsihlele, an “experienced industrialist” as well as “a seasoned manager and strategist” according to a LinkedIn profile, with over 20 years in the aerospace sector, tells staff a “significant effort” to collect funds will continue.
“Please know management are doing their utmost best to secure funds for salaries,” he writes.
Denel Dynamics joins other divisions and associated companies which collectively have history going back more than a year of short and late salary payments with employee financial obligations, including medical and pension, suffering the same fate. Denel debt to employees at the end of June reportedly was more than R500 million.
Employees are paid according to revenue earned – and paid to – the various divisions and associated companies. As an example, this saw Denel Land Systems (DLS) employees paid a fifth of their monthly salary in May.
Denel Dynamics is located on the Irene, Centurion campus of the government-owned defence and technology conglomerate – the same site as its corporate office where William Hlakoane is acting chief executive after he was named to replace Talib Sadik (also an acting appointment) in February. In the statement announcing Hlakoane’s appointment, Denel said a recruitment process for a permanent chief executive was underway with no further announcement on this key position at the time of publishing.
Daily Maverick reports Denel Technical Academy (DTA) learners have waited nearly four years for Denel to book trade tests for them. Around 100 people began three-year apprenticeships with Denel in 2018. They told the Cape Toen-based digital daily their apprenticeships were supposed to be completed by end 2020 adding trade tests have not yet been booked.
Some apprentices were told they could not book tests themselves. Denel said its supply chain department was in the final stages of securing a service provider to facilitate the process, apologised “for the interruption and delay in the process,” and blamed the COVID-19 pandemic for the disruption.
Apprentices Daily Maverick spoke to said Denel did not have the money to book trade tests.
DTA offers apprenticeships in trades including welding, fitting and turning and aircraft mechanics.