State-owned Denel cannot honour a Labour Court ruling to pay outstanding salaries, according to a letter reportedly from lawyers representing the ailing defence and technology conglomerate to at least one trade union.
Irene, Centurion-headquartered Denel will at the end of this week bid farewell to chief executive Danie du Toit, after just on two years at the helm of the financially troubled group.
Denel was last week ordered to settle outstanding salaries for employees by no later than Friday 7 August and at the same time ensure payments were made for tax, medical aid and pension funds among others.
“Our client has instructed us that, as indicated previously, it is unable to comply with the court order today. … Our client requests your clients grant it an indulgence to enable it to work on measures to raise funds,” Denel’s lawyers wrote in the letter last week, adding Denel would aim to give an update by no later than the end of this week.
At the time of publication there was no official response from Denel apart from its statement issued after the Labour Court ruled in favour of trade unions Solidarity and the United Association of South Africa (UASA) last week. It indicated the Denel Group and its only shareholder – government represented by Minister Pravin Gordhan’s Department of Public Enterprises, was “working relentlessly” in search of solutions to Denel’s myriad problems, euphemistically referred to as “challenges”.
Ahead of the court hearing, West Rand-based UASA said members employed by Denel were “carrying the burden of poor management decisions and were in a desperate financial position, unable to meet credit and family obligations”.
Solidarity aviation and defence sector co-ordinator Helgard Cronjé cited “a total lack of commitment regarding a turnaround for Denel” as one reason for going the Labour Court route a second time. This, after it held back an earlier application to the same court.
“Any number of turnaround plans were previously submitted by management but the board and the minister are not prepared to accept responsibility and provide the financial assistance required. Solidarity has no choice but to continue with legal action,” he said ahead of last Wednesday’s virtual court hearing.