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Union Solidarity has thrown down the gauntlet, threatening legal action at state-owned arms company Denel, following news that the company would not be able to pay July salaries for staff.
Denel has been in financial dire straits for much of the year, but Minister of Public Enterprises Pravin Gordhan has repeated his commitment to assist the company to get back on its feet and become self-sustaining.
Solidarity’s sector coordinator for defence and aviation Helgard Cronjé said in a statement from Solidarity that the union would not allow Denel’s financial woes compromise workers.
"Not paying salaries on time must be is totally unacceptable and we condemn it. The implications are immense and far-reaching and Solidarity is ready for the fight," said Cronjé.
Cronjé said if July salaries were not paid, Solidarity would have no other option but to proceed with legal action against Denel.
"While management’s communication to employees is more transparent and unions appreciate management’s efforts, the realities facing our members nevertheless still remain, and as a union we need to do what we need to do to protect the rights of our members," Cronjé warned.
Denel spokesperson Pam Malinda confirmed in a statement that the arms utility did not have the resources to compensate staff for their labour during the month of July.
"The management of Denel has today informed employees of the reality that the company remains at risk of not being in a position to pay salaries for the month of July on time. Danie du Toit, the Group CEO of Denel, indicated to employees that they are in constant engagements with the banks to secure bridging finance to support the company," said Malinda.
According to the statement, the challenge is connected to the current liquidity challenges experienced by Denel. Denel CEO Danie du Toit said these liquidity challenges also resulted in a delayed payment of full salaries and late payments of the employer’s contribution to the Denel Pension Fund in June.
"Once again, I do apologise for the stress and anxiety caused to you and your families as a result of the current uncertainties. I thank you for remaining loyal to the company and for the personal sacrifices you are making for the company," said Du Toit.
The statement said Denel was confident that it would soon be recapitalised, though the next few months would be "very tough".
