The United Association of South Africa (UASA) trade union said it is taking Denel to court over the company’s failure to pay employees’ salaries on the agreed date of 25 May.
“Denel is therefore in breach of its employment contracts,” the union said in a statement. “The SOE [state owned entity] indicated that it would also not be in a position to pay salaries for June and July.”
Denel has been in a precarious financial position since at least late 2017 when it could not make full salary payments. The financial crisis in the company dragged on until the Department of Public Enterprises (DPE) assisted with an R1.8 billion bailout in April 2019. Now, barely a year later, it is in the same position, asking for a further R576 million bailout, while being unable to fulfil its responsibilities towards its employees, UASA said.
“UASA will not allow its members employed at Denel to be victims of this financial mismanagement any longer. Our members cannot afford to be without income for a single month, not to mention for three or more. They have a right to be remunerated for their labour as per their employment contract.”
UASA earlier shared its concerns with Denel management and the minister of Public Enterprises, Pravin Gordhan, but met with “no success”.
“Management has to accept responsibility for the situation at Denel. The issues of salary non-payment is not a new development and it boggles the mind that the state-owned enterprise has not rectified this given the amount of time and bailouts they have received,” UASA said.