The state arms manufacturer has reportedly been unable to pay full salaries since April.
Reuters has reported that trade union Solidarity has applied to the Labour Court to challenge state arms manufacturer Denel over its failure to pay salaries in full. Denel had also failed to meet its statutory obligations in respect of its employees by not paying income tax and other deductions to third parties since April.
According to the Reuters report Denel is still awaiting a R576 million bailout announced in a budget speech in February.
In a statement released on Tuesday, Solidarity said the state defence firm said employees’ salaries for May were only paid in part with some members of staff receiving only as little as 20 percent of their salaries. Meanwhile, Denel indicated that salaries for June and July were also in jeopardy and suggested that employees should sacrifice their salaries in part from June to August.
“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. 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,.” said Helgard Cronjé, Solidarity’s sector coordinator for defence and aviation, adding that the state had played a role in Denel’s situation by appointing “corrupt board members in the past and by having allowed state capture and corruption to take place right under its nose."
Cronjé said it was not fair that honest employees were paying the price for "the state’s incompetence by receiving only partial or no salaries at all and there is even an expectation that they would sacrifice their salaries altogether for a few months."