The possible retrenchment of 523 Denel aircraft specialists has been confirmed, trade union Solidarity said on Thursday.

It said it received a written notice confirming the possibility that up to 523 aircraft specialists at Denel/AMG would be retrenched, spokesman Jack Loggenberg said in a statement.

“(This was) because of the SA Air Force's (SAAF) cancellation of its contract for aircraft maintenance with the company,” he said.

The first consultation on the retrenchments would take place on January 14, 2013.

Denel also confirmed on Thursday the possibility of retrenchments.

“Denel has initiated a process of communication with employees... regarding the future of a contract to supply personnel to the SAAF to ensure its operations,” spokeswoman Sinah Phochana said in a statement.

“The CEO of Denel Aviation, Mike Kgobe, is currently conducting a road show to all affected employees across the SAAF bases, squadrons and units to explain the situation and the process to be followed.”

She said the company would engage with unions in terms of the Labour Relations Act, Section 189A, which regulated the retrenchment process, to reach consensus on issues affecting potential future employment.

Denel has been sub-contracted by the SAAF since 1986, and the contract was terminated, with the termination notice period coming to an end on March 31 next year, said Phochana.

Since Denel had no contract or order cover beyond March 31, the company had no other option but to consider retrenchment of the work force.

However Denel was considering alternatives to retrenchment for the 523 affected employees, plus 15 administration staff, which included possibilities for alternative employment, said Phochana.

Loggenberg said the announcement could not have come at a worse time for the employees, though it was not clear how many employees would be retrenched.

“These employees are stationed at various squadrons all over the country. They will probably not only lose their jobs, but also their air force housing within a matter of months,” he said.

If the air force did take over some of the contracts of employment, Loggenberg said those employees taken on by the air force should receive the same conditions of service and remuneration as before.

Section 197 of the Labour Relations Act stipulated that employees' conditions of service and remuneration must be kept at the same level when their contracts of employment were transferred, he said.

“We are concerned the air force, to cut on expenses, will wait until all the employees have been retrenched before appointing some of them on a lower salary to do the same work.”

Loggenberg said there was also still no clarity who, between Denel and the air force, would be responsible for paying severance packages and whether more retrenchments would follow.

Phochana said Denel would continue to negotiate with the SAAF to determine whether alternative solutions for the future of the contract could be found.

“Denel is still hopeful and believes that it will find an amicable solution through on-going discussions with the SAAF and the SANDF,” she said.

Loggenberg said the department of defence gave notice on June 20, 2011 that it was going to cancel the aircraft maintenance contract.

He said meetings were held to re-negotiate or review the contract, but to no avail, as the air force announced in November that it would not sign a new contract with Denel. - Sapa