The Johannesburg Labour Court yesterday ordered cash-strapped Denel to make payment within the next 10 days of R90 million to Solidarity members, the union said in a statement yesterday.
This comes after Solidarity pursued a lawsuit against the state-owned entity (SOEs) over overdue salaries and other payments due to Solidarity members.
This case followed a previous success when Solidarity received warrants to seize Denel property worth R12m, and Denel finally paid, the union said.
Solidarity chief executive Dr Dirk Hermann said: “This is a huge victory for Solidarity members, some of whom have not received their full pay since May 2020. We are incredibly grateful for the relief this order brings to our members. Our members had to do their work almost continuously without full pay, and this amid the major uncertainty and challenges the Covid-19 pandemic brought.”
He warned that if Denel did not make the required payments within 10 days, Solidarity would instruct the sheriff to seize Denel's assets.
"We cannot allow workers' money to be used to fund mismanagement and looting," Hermann said, adding that the unions s next step was to make sure that those who are responsible for this mismanagement are brought to book.
“We cannot allow that our members and ordinary taxpayers to carry the can for the state’s mismanagement anymore while the plunderers can simply carry on plundering with impunity. We have to take matters further. We will now carry on with litigation and will file criminal charges to ensure that those who caused this mess to be held accountable for it,” Hermann said.
Solidarity is not alone in fighting for its members’ paychecks.
Union Uasa has been in a legal battle with Denel for almost two years over unpaid salaries to its members employed at the arms manufacturer.
Since May 2020, its members employed by Denel have been receiving nothing or just a portion of their salaries, “forcing workers to live from hand to mouth although they were expected to report for duty every day. ”
Uasa has also called for action against former Denel executives after Deputy Chief Justice Raymond Zondo released the second State Capture Commission report on February 2.
Former Public Enterprises Minister Lynne Brown and former Denel board chair Daniel Mantsha were named on numerous occasions for their “contribution” to allowing State Capture to run riot at the defence and technology conglomerate.
Zondo’s recommendation is for law enforcement to conduct further investigations with a view to “possible prosecution” of people who were Denel directors in 2015.
In a statement at the time, Uasa spokesperson Abigail Moyo said: “South Africa’s SOEs need a serious overhaul. It has become nonsensical to keep these businesses afloat with taxpayers’ money while they fail to sustain their operations and employees due to corruption and mismanagement.
“It seems obvious that the state does not care one iota about these businesses or employees. SOEs need to start generating their own revenue and be sustainable or be privatised. It is for this reason that Uasa wholeheartedly supports the investigation and prosecution of corrupt executives who enabled the capture of Denel.”
February was a blighted month for the SOE as shortly after the Zondo report, the Johannesburg Stock Exchange suspended Denel’s bonds after it failed to submit its annual financial statements on time and delaying interest payments.
At the time, Denel said that the entity and the government were chasing approvals for the payments, which were pending soon.
This as Denel faces a staggering debt of R290 million.
Although Denel needs a helping had from the government, Denel’s chief executive, Willliam Hloakoane, has previously said it was attempting to dispose some of its assets, timed for early this year, to meet its financial obligations, largely interest payments on debt.
However, yesterday Denel got a reprieve. Finance Minister Enoch Godongwana, in the Budget, announced National Treasury had assigned the entity R3billion in bailouts in the current financial year.
Earlier this week, it came to light that the liquidity crisis within Denel was also hampering the maintenance of South African Air Force aircraft, including the Rooivalk and Oryx helicopters and C-130 Hercules transports.
Armscor, in a presentation to the Portfolio Committee on Defence and Military Veterans on February 16, said Denel’s liquidity crisis meant subcontractors were requesting full payments before commencing any work, resulting in Armscor having to pay them directly.
Denel is the original equipment manufacturer of the Rooivalk and Oryx and an accredited service centre for the C-130 Hercules. It has a R1bn contract to service the Rooivalk fleet between April 2019 and April 2022.
BUSINESS REPORT