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Relief as Denel coughs up workers’ backdated salaries at last

Picture: Siphiwe Sibeko/Reuters

Picture: Siphiwe Sibeko/Reuters

Published Aug 4, 2022

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Cape Town - The financial health of state-owned enterprises (SOEs) is in focus again following the payment by Denel of backdated salaries to the tune of about R300 million after a lengthy court battle fought by unions to get all outstanding monies paid.

Trade union Uasa’s spokesperson Abigail Moyo said the union's members reported that the company started paying them salaries owed over the last two years on Friday, July 29.

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Moyo said: “For more than two years, Uasa members in Denel’s employ showed up for work while surviving on little to nothing, until a Labour Court ruling by Judge Andre Van Niekerk on July 26, 2022 ordered the company to effect payment of the outstanding remuneration for the period August 1 2020 until May 31, 2022 within 14 days.”

Meanwhile, Denel reached a settlement with Solidarity on the R90m owed to Solidarity members working there after the union obtained a court order to seize Denel’s assets and bank account.

Solidarity was due to proceed with the seizure of Denel’s assets and its bank account yesterday (August 3).

Solidarity chief executive Dirk Hermann said: “It is sad that there had to be so much suffering before members received the salaries that were due to them.” Finance Minister Enoch Godongwana told Parliament that more than R308 billion had been used to bail out failing state-owned enterprises, leading to a reduction of R257bn in public funds available for frontline services and infrastructure.

Minister of Finance Enoch Godongwana delivers the Budget speech 2022 at the Goodhope chambers. | Phando Jikelo/African News Agency(ANA)

Among SOEs that the government has been forced to bailout recently are Eskom, the South African Post Office (Sapo) and South African Airways.

Godongwana said that to date, Eskom had received R136bn to pay off its debt, with a further R88bn set aside until the 2025/26 financial year.

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In November last year, Sapo’s chief executive Nomkhita Mona asked Parliament for a bailout of R8bn as the SOE owed the SA Revenue Service R600m for taxes relating to salary payments.

Last year SAA got R5bn from the Department of Public Enterprises to help make severance payments to laid-off staff as part of its rescue plan.

Political economist Daniel Silke said: “It's the same problem time after time. Ultimately, the SOEs represent the failed intervention of a state that should largely not be in the business of providing the services.”

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Silke said the problems varied from cadre deployment, the use of poor skill sets, corruption and an inability really to understand the marketplace for services and apply future trends and future themes to reinvigorating the business.

“For instance the post office was based on an old model 30 to 40 years out of date. It clearly cannot survive on that. The airline itself was wrecked by corruption. Also many of these SOEs are frankly businesses that the state should simply not be involved in.”

He said it was unfortunate, from the ANC point of view, that their commitment to a developmental state which formed the basis of their ideology, had largely come a cropper as a result of the mismanagement of these SOEs.

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“The ANC itself now ideologically has to get its head around the fact that the rescue package is not going to come from further state intervention, but it is likely to come from public private partnerships.”

Over the weekend the ANC policy conference reaffirmed the party’s commitment to allow for greater private sector participation in SOEs hoping to attract investment and boost economic growth.

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