Simnikiwe Hlatshaneni
Premium Journalist
2 minute read
16 Jul 2019
6:05 am

Solidarity warns Denel of legal action over pension contributions

Simnikiwe Hlatshaneni

After the late payment of salaries last month, the state arms manufacturer is now in arrears with workers’ pension contributions.

A G6 155mm self-propelled artillery gun, one of Denel's products. Picture: Denel website

At least one union has threatened legal action against state arms manufacturer Denel for the non-payment of statutory contributions to salaries over the past month.

This comes against the backdrop of the state company’s liquidity crisis, which led to late salary payments last month.

Trade union Solidarity, which represents 1,200 of Denel’s approximately 4,000 permanent staff, was in talks with its legal department yesterday after demanding clarity from management on the non-payment of workers’ pension contributions last month.

Yesterday Denel’s board met its fund manager, Denel Retirement Fund, and unions hoped it would be clarified how long workers would wait for the late payments.

“We gave management a heads up this morning that we need feedback regarding that meeting before noon today, failing which we will be meeting with our legal team to discuss whether to proceed with some form of legal action,” said Solidarity’s Johan Botha.

He added the union was concerned this might not be the last time the company struggled to pay salaries.

“There may be a light at the end of the tunnel, but it’s not clear how long that tunnel is.”

Denel spokesperson Pam Malinda said Denel was still “facing challenges”, despite continuously engaging with the department of public enterprises on its liquidity crisis.

“Denel’s management is working tirelessly to correct a situation in which it was unable to make the June payment of the employer’s contribution to the Denel Pension Fund. Denel is also engaging banks to secure bridging finance until recapitalisation is received.”

Trade union UASA would not comment on whether it would follow suit with its own legal action.

According to UASA spokesperson Stanford Mazhindu, employees were still waiting to find out about back payments from previous defaults on monthly contributions.

“We are waiting for the follow-up meeting with management to discuss back payments as well. It was more than one month. Medical aid was paid, the issue now is payments to the retirement fund.”

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