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Real Economy News in Real Time
R/€ = 15.65 Change: -0.04
R/$ = 13.93 Change: -0.09
Au 1436.79 $/oz Change: 16.84
Pt 856.95 $/oz Change: 8.03
 
 
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Denel’s liquidity crisis plunges employees into new financial crisis

12th July 2019 BY: Simone Liedtke
Writer

Following a further breakdown in trust between the management of State-owned defence company Denel and labour after this week’s announcement that the company had not paid over either workers’ or the company’s retirement fund contributions, a special labour forum was held on Thursday to discuss the crisis.

According to a letter to employees, pension fund contributions for the month of June had been deducted from employees’ salaries, but not paid over to the pension fund.

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“There is still some uncertainty about exactly what has been paid and what not. According to feedback we received yesterday, medical aid contributions were paid, but not pay-as-you-earn (PAYE) tax, Unemployment Insurance Fund (UIF) contributions or pension fund contributions for June,” Solidarity defence and aerospace sector coordinator Helgard Cronjé said on Thursday.

Trade union UASA said it was “deeply concerned” about Denel being “less than honest” with its employees.

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In a statement on Friday, UASA said that, last month, Denel CEO Daniel du Toit had indicated to workers that it remained Denel’s priority to ensure that employees’ salaries, pension fund contributions, PAYE tax and UIF were the first to be paid on a monthly basis.

"Du Toit had said, on June 26, that these payments were up to date, which was not true,” the union lamented.

UASA and other unions present at Thursday’s forum have requested a follow-up meeting with Denel’s management next week and will be requesting a thorough report indicating the proof of the exact dates of payment to the pension fund, specifying each Denel division, as of December 2018, including late or no payments.

Additionally, unions are asking for clarity, by September, on the arrangement with Sars regarding the payment of tax, as well as clarity and/or the arrangements that have been made regarding the UIF nonpayment.

Meanwhile, according to UASA, it had been agreed that Denel would have a meeting with the employees’ pension fund, Denret, on July 15 to discuss interim arrangements. UASA further stated that Denel would have to accept full responsibility for any claim made by any member as it would be acting in terms of the conditions of service contract between it and the employees.

Solidarity said it would “not hesitate to take the necessary action to protect the interests of its members”.
 
“Solidarity is most upset by Denel’s inability to communicate proactively with its workforce when it comes to challenges of this nature. The legal action Solidarity is currently considering is to hand over Denel to the relevant financial authorities for its defaulting,” Cronjé said. 

EDITED BY: Chanel de Bruyn Creamer Media Senior Deputy Editor Online
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