Denel is holding talks with unions over voluntary severance packages, reduced working hours and salary cuts for some staff. Photo: Supplied/Denel
Denel is holding talks with unions over voluntary severance packages, reduced working hours and salary cuts for some staff. Photo: Supplied/Denel

Solidarity members say no to salary cuts at Denel

By Staff Reporter Time of article published Nov 5, 2018

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CAPE TOWN - Solidarity members, on Monday, expressed their dissatisfaction with Denel management’s proposal to cut salaries with 20% as from the end of November. 

Solidarity said that this salary cut was allegedly needed to restore cash flow, thereby stimulating production activity and to generate income. 

During a recent mandating process Solidarity members rejected those proposals.

“While it is common knowledge that Denel is currently experiencing severe cash constraints, including outstanding payments of R1,2 billion to suppliers, Solidarity members are not responsible for the mismanagement and poor management decisions which landed Denel in its current financial conundrum,” Solidarity Deputy General Secretary Johan Botha said.

According to Botha, the 2017/18 financial report of Denel showed that in the midst of poor management decisions, Denel’s Group Financial Director still received a hefty performance bonus of R3,28 million, and his total remuneration package for this period was R7,032 million. “In 2016/17 the salary bill for group executives increased from R22 million in 2016/17 to R41,8 million in 2017/18,” Botha said.

“Not one of the executives who has been responsible for the poor decisions and mismanagement has been criminally prosecuted, but our members have to resign themselves to the fact that “One Denel” means you have to carry the can for the mismanagement perpetrated by others. 

“If our members do not agree to the mandatory short-time which will result in a 20% salary cut, the unfortunate result will be that salary payments won’t be guaranteed after November 2018.”

Apart from Solidarity members’ demand for urgent action to be taken against the perpetrators, members also demand the urgent appointment of a new Group Executive Officer, the urgent approval of Denel’s revised corporate plan and urgent consideration of possible foreign investors who might be interested in obtaining shareholding in Denel. 

“Privatisation or partial privatisation of Denel is the only thing that will prevent the total collapse of Denel, not the proposed 20% savings on employees’ salaries. We are concerned about President Ramaphosa’s statement recently that as yet, no real consideration has been given to the possibility of foreign investors interested in Denel, while indications already exist that the monthly salaries of employees are in jeopardy,” Botha explained. 

“Therefore, Solidarity is geared for any illegal reduction in its members’ salaries without their permission,” Botha concluded. 


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