Union blasts Denel for last-minute unilateral three-month salary cut

21st May 2020 By: Rebecca Campbell - Creamer Media Senior Deputy Editor

Trade union UASA announced on May 21 that it was “rejecting” the letter sent out by South Africa’s State-owned defence industrial group Denel’s CEO Danie du Toit in which he announced that the company would not be paying its employees for the next three months (May, June and July). The union described Du Toit’s decision as “unilateral”.

UASA stated that it had written to Denel board chairperson Monhla Hlahla to express their “dismay” at, and refusal to accept, the CEO’s letter. The union affirmed that it expected that its members would receive their normal salaries until it has had “meaningful engagements” with the group.

“The problems at Denel are by no means a new development and it boggles the mind that the State-owned enterprise [SOE] waited to the last minute to make such an important announcement,” asserted UASA in its statement. “Various meetings have taken place between organised labour and the SOE, and it is apparent that our concerns regarding Denel’s financial situation were not being taken seriously.”

The union pointed out that the Department of Public Enterprises had given the group a cash injection of R1.8-billion in April 2019, but there was no clarity on how that amount had been spent. Denel had also told the unions that it was constantly in talks with various institutions, including banks, for assistance.

“UASA takes note that the current Covid-19 pandemic does not make it easier for Denel to ensure income generation, but we are of the opinion that such could only be used as a mere excuse at this stage, noting the history and performance of Denel over the last 24 months,” affirmed the union. “Management has to accept responsibility for the situation at Denel. Taking the ‘easy way out’ via Section 189 [retrenchment] notices and cutting staff will not work.”

UASA was originally founded in 1894 and was previously known as the United Association of South Africa. It represented nearly 73 000 workers across a range of sectors and was a member of the Federation of Trade Unions of South Africa.