DENEL has been backed into a corner after the Labour Court dismissed the state arms manufacturer tactics for further payment delays to union Uasa’s members.
This after an urgent court application was brought by Uasa against Denel in April to honour all outstanding contractual obligations and effect payment of full remuneration to Uasa members.
Judge Andre van Niekerk ruled that Uasa’s application be postponed to the matter set down on the unopposed court roll for July 26, irrespective of whether Denel opposed the application or not.
Denel was ordered to provide updated outstanding remuneration amounts for May and June 2022, which would be included in Uasa’s claim by July 14.
Uasa intends to get a compliance to force Denel to pay all outstanding salaries and statutory payments, reported to be around R830 000 owing to workers since August 2020.
Judge Van Niekerk’s ruling required all the updated figures, including the May and June figures, be verified so that if accepted by the court, execution would be expedited.
Denel’s argument that the employees grant it an opportunity to restructure before making payments was rejected by the ruling.
Debt-riddled Denel took a body blow last month when the North Gauteng High Court in Pretoria ordered it to pay R13.2 million in outstanding salaries to 42 non-unionised current and former employees.
Denel was ordered to pay, within 10 days, amounts ranging between between R55 000 and R700 000 in unpaid wages for the period between May 2020 and April 2022.
Denel has plans to restructure and under its new five-year turnaround strategy, aims to save nearly R250m a year by restructuring into two divisions (from six operating units currently), and raise R2.5 billion by selling stakes in Rheinmetall Denel Munition (RDM), Hensoldt South Africa, and some of its property portfolio.
Two weeks ago, a surreptitiously leaked note from Action SA CEO William Hlakoane announced that former CEO Riaz Saloojee had been roped in from SAA Technical as a integral to fast-tracking implementation of the “approved Denel five-year strategy” and ensure the troubled state-owned entity is restored as “as a strategic national asset”.
Unions, including Solidarity and the National Union of Metalworkers of South Africa, have already won court orders directing Denel to pay their members their full salaries.
In February, Public Enterprises Minister Pravin Gordhan, revealed that nearly R1 billion held in a medical fund is becoming available to Denel, which can be used to meet its various obligations such as paying tax.
Uasa’s Abigail Moyo said they would continue the court battle against Denel until all outstanding monies owed to members employed by the state-owned enterprise are paid.
“Uasa members working for Denel have survived on little to nothing for over two years now, and it is about time that the company starts acting in the best interest of its workers and pays what is due to them,” Moyo said.
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