The Solidarity trade union has blasted the South African government and the management of State-owned defence industrial group Denel over their mishandling of the affairs of the company, causing it to be in so bad a condition as to be unable to pay its employees their full salaries. In May, some Denel workers had received only 20% of their salaries.

Denel had also been unable to pay employees’ income tax and other statutory deductions to third parties since April. Further, it had indicated to the union that staff salaries for June and July were also at risk and had proposed that its workers should give up part of their salaries for June, July and August. In consequence, Solidarity was taking Denel to the Labour Court, with the hearing scheduled for June 30.

“It is ridiculous to think that a company would impoverish its employees through its failure to meet the financial obligations it has in respect of employees,” asserted Solidarity defence and aviation sector coordinator Helgard Cronjé. “It is even more outrageous to expect these employees to impoverish themselves to help the employer, and in particular the State as shareholder, by sacrificing their salaries at the expense of themselves and their families.”

Solidarity was demanding that Denel pay all the outstanding salaries, plus the outstanding payments to third parties, by July 3. Although the country had been under a lockdown since late March (to counter the Covid-19 pandemic), this was not the only reason why Denel was in such financial distress.

“The State has an undeniable share in this by having appointed corrupt board members in the past and by having allowed State capture and corruption to take place right under its nose,” he charged. “Now, honest employees must pay the price for the State’s incompetence by receiving only partial or no salaries at all and there is even an expectation they would sacrifice their salaries altogether for a few months.”

Denel had a turnaround plan, and the group’s management had told the union that the government supported the plan. But the State had not provided the funding required to implement the plan.

“The State’s inability to steer this ship left us with no choice but to approach the court again,” explained Cronjé. “The State has a chance to avoid a second SAA [South African Airways] and [electricity utility] Eskom, but their reluctance to really support the turnaround plans by providing the necessary funding is slowly but surely sending Denel on the same path as other State-owned enterprises. The State must accept responsibility for its mistakes and not shift it onto employees. Solidarity will continue to take a stand against employers like Denel and the State who abuse and exploit Solidarity’s members.”