Trade union Solidarity says strike action is possible at seven subsidiaries of state arsenal Denel after the company implemented unilateral salary increases ranging of up to 4.8% with effect from April 1, citing financial constraints and an ongoing effort to turn around the loss-making business.
Solidarity represents some 1500 of Denel’s 6000 employees and says it has declared a wage dispute with Denel as well as the seven subsidiaries (PMP, Denel Dynamics, Denel Aviation, Denel Saab Aerostructures, OTB, Denel Properties and Denel Integrated Systems Solutions). The union says it has also obtained a legal opinion regarding the situation. “The dispute was declared based on Section 24 of the Labour Relations Act and will be handled in terms of the principles of good-faith negotiations, as described in the various recognition agreements,” the labour organisation said in a statement.
“The dispute will first be subject to conciliation, after which it could possibly be referred for arbitration. If the dispute cannot be resolved, all seven entities face a strike. The dispute comes after paltry wage increases were implemented unilaterally.”
The state arsenal ended R544 million in the red for the year-to-March 2009, which was a considerable improvement on the loss of R1.6 billion for the period ending in March 2006. The company last posted a profit – of R24.1 million – in 2001. The last profit before that was R81.5 million in 1997. It expects to report a loss of about R600 million for the year to March 2010 and return to profitability in early 2014.