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Johannesburg - State-owned Denel's 4% wage increase is unacceptable, trade union Solidarity said on Monday.
"Although the board and executive directors of Denel received close to R4.3m in bonuses last year, the company is budgeting for a mere 4% wage increase for employees this year," the union said in a statement.
The union said it would not agree to the increase in the upcoming wage negotiations at the parastatal's various entities.
The separate entities budgeted for increases of more than 5%, Solidarity spokesperson Jaco Kleynhans said.
"The Denel board repudiated these budgets and adjusted them to only 4%, even though the entities are supposed to function autonomously."
He said wage negotiations at Denel had to commence soon for wage increases to be implemented by April 1.
"Solidarity is already involved with preliminary discussions with the various entities and although the outlook here is more favourable, Denel has indicated that a wage increase of only 4% is being budgeted for this year," Kleynhans said.
"The executive director of Denel, Talib Sadik, received a performance bonus of more than R1.6m last year and other members of top management collectively received more than R2.6m in bonuses," Kleynhans said.
Leadership 'a serious problem'
According to the group's annual report, this payment was based on the performance of the company and the achievement of certain performance targets.
"Denel expects its highly skilled employees to be content with scraps in the form of an inferior wage increase.
"This is unacceptable and the company must prepare itself for tough wage negotiations this year," Kleynhans said.
Solidarity had meanwhile welcomed President Jacob Zuma's call for an urgent inquiry into parastatals.
"Leadership at these institutions is a serious problem and the mere fact that the president is acknowledging that there is a crisis at these institutions is already a good sign," Kleynhans said.
In a meeting with the Deputy Minister of Public Enterprises, Enoch Godongwana, earlier this year, Solidarity expressed concern over various issues regarding Denel.
"The minister undertook to give feedback on Solidarity's questions concerning Denel after a Cabinet meeting on 24 February.
"He also indicated that a large-scale meeting will be held with all trade unions that are represented at parastatals in March to discuss the disturbing situation at each one," Kleynhans said.
Solidarity will handle wage negotiations at Denel's RheinMetall Denel Munitions, Denel Aviation, Denel Dynamics, Denel Land Systems, Denel PMP, Overberg Testing Station and Carl Zeiss SA.
The trade union represents close to 1500 employees at the Denel entities involved in the forthcoming wage negotiations.
Denel could not be reached immediately for comment.
- Sapa
