Denel Aviation last week confirmed that it would start to retrench the entire workforce of its Denel Personnel Solutions/Aero Manpower Group (DPS/AMG) with effect from the end of March. This is because the South African Air Force (SAAF) will not be renewing its current contract with DPS/AMG, which lapses at that time. Denel Aviation is an aircraft maintenance, repair and overhaul company and is part of the State-owned Denel defence industrial group. DPS has provided skilled maintenance personnel for the SAAF under the AMG contract since 1986.

“Because DPS has no contract or order cover beyond [March 31], the company has no option but to proceed with the retrenchment for the entire DPS/AMG workforce,” stated Denel Aviation in a press release. This will result in 538 employees losing their jobs.

That the SAAF intended ending its contract with Denel Aviation first emerged in June last year, with notice being given to that effect. This was followed by talks on the possibility of amending and reviewing the contract. But, in November, the SAAF confirmed in a letter that it would not be renewing the contract next year.

“Discussions took place [with trade unions on January 14] in terms of Section 189A of the Labour Relations Act, 1995, in an effort to reach consensus on issues that will affect the potential future employment of the affected employees,” reported the company in its press release. “The parties will focus on finding ways to minimise the negative impact of the retrenchments and Denel has committed to assisting [in finding] job opportunities for the affected employees both within the Denel group and the broader market.”

At the January 14 meeting, the South African Air Force (SAAF) confirmed by telephone that it would neither renew the DPS/AMG contract nor take over any of the contracts of the AMG employees. While Denel Aviation has stated that 538 employees are affected, trade union Solidarity has referred to 523 “aircraft specialists”, of whom 208 are Solidarity members.

“Since the Air Force has confirmed that it would not be taking over any of the 523 aircraft specialists from Denel Aviation/AMG, we are trying, through the consultations, to deploy the employees within Denel or other companies,” stated Solidarity spokesperson Jack Loggenberg. Because of DPS/AMG’s contractual obligations to the SAAF, none of the workers can leave the company before March 31. In turn, this means that the retrenchment consultations should be completed by February 14.

“The Air Force probably wants to end the Denel contract because it is very expensive,” he opined. “If the Air Force were to take over some of the contracts of employment, a Section 197 [notice] would have to be issued as well for the transfer of the contracts. According to Section 197 of the Labour Relations Act, employees’ conditions of service and renumeration must be kept on the same level when their contracts of employment are transferred. It is therefore our suspicion that the Air Force, in order to save money, will wait until all the employees have been retrenched before possibly appointing some of them on a lower salary to do the same work.”

Solidarity’s spokesperson affirmed that the senior executives of Denel had “done everything possible” to rescue the contract with the SAAF. Although 40% of the DPS/AMG specialists are based in Pretoria, the rest are scattered across the country at various Air Force bases and stations, including Hoed-spruit, Langebaanweg, Lephalale, Makhado, Overberg and Ysterplaat. Last month, Denel Aviation CEO Mike Kgobe travelled to these and other locations to meet and brief DPS/AMG personnel. He informed them about the situation and the processes that would be followed.