Gauteng, West Rand, based labour organisation UASA (United Association of SA) maintains the court order forcing Denel to meet its financial obligations to employees as far as salaries, tax, medical and other commitments are concerned is “a great victory”.
UASA, along with Solidarity, waged a two-year long legal battle against the beleaguered State-owned defence and technology conglomerate for employees to be paid what it rightfully owed to them.
UASA spokeswoman Abigail Moyo said in a statement the Labour Court ruling to effect payment of outstanding remuneration for the period 1 August 2020 to 31 May 2022 for UASA members along with outstanding medical aid and pension fund contributions, was “specific evidence” Denel has to fulfil its employee/employer contractual and statutory obligations.
UASA members at Denel and those belonging to other trade unions will also receive interest on outstanding remuneration at a prescribed interest rate calculated from the date they became entitled to payment of remuneration to the date of final payment. This was also ordered by the Labour Court.
Denel must deduct and pay amounts outstanding to SA Revenue Service (SARS) for UASA members no later than 31 May next year, or on an earlier date if SARS requires.
“Denel did not comply with a previous court order to pay UASA members’ outstanding remuneration. This forced UASA to apply for Denel and its directors to be held in contempt of court, while Denel and its directors relied on liquidity challenges as an excuse for not complying,” the statement has Moyo saying.
“UASA members rendered services to Denel despite the company’s breach of contractual and statutory obligations. Hardships suffered by UASA members were ongoing.
“The court order was granted because UASA showed Denel will receive sufficient funds from the Denel Medical Benefit Trust Fund next month, enabling the State-owned enterprise to meet its obligations to UASA members.
“UASA had the option of a writ of execution to dispose of Denel assets to pay its members. An action such as this is highly irresponsible in that means of production are taken away, which will lead to the total demise of Denel,” Moyo said.
Denel is paying around R300 million worth of outstanding salaries, with the first payments done on 29 July and expected to be completed this week. Denel reached an agreement with Solidarity regarding R90 million owed to union members employed at the defence and technology conglomerate.