Solidarity said vowed to take action against Denel, saying that it was irate after the arms manufacturer informed workers that their July salary might not be paid on time. File picture: Reuters/Siphiwe Sibeko

Johannesburg - Trade union, Solidarity said on Monday vowed to take action against Denel, saying that it was irate after the state-owned arms manufacturer informed workers that their July salary might not be paid on time.

In an email to workers on Monday, Denel informed its staff that it was at a risk of not being in a position to pay salaries for the month of July on time.

This is a second time in as many months that this situation arises at Denel after the company last month said it would only pay 85 percent of workers' salaries due to cash flow problems until Public Enterprises Minister Pravin Gordhan and a mysterious lender intervened to pay full salaries. 

"Not paying salaries on time must be is totally unacceptable and we condemn it. The implications are immense and far-reaching and Solidarity is ready for the fight,” said Helgard Cronjé, Solidarity's sector coordinator for defence and aviation.

Denel said it remained confident of government's continued support and believed it will receive the much-needed recapitalisation by the end of September 2019.

Danie du Toit, Denel chief executive, said that they were in constant engagements with the banks to secure bridging finance to support the company.  

"The thought that Denel cannot guarantee salaries for July is completely unacceptable, to say the least. Recapitalisation alone will not solve Denel’s financial crisis. It is a short-term solution at best," Cronjé said.

Cronjé said if July salaries are not paid, Solidarity will be left with no other option but to urgently proceed with legal action against Denel.
 
"While management's communication to employees is more transparent and unions appreciate management’s efforts, the realities facing our members nevertheless still remain, and as a union, we need to do what we need to do to protect the rights of our members," Cronjé said.

African News Agency (ANA)