THE prestigious Pencil Club in Umhlanga, once known as a luxurious and exclusive members-only establishment, which abruptly entered business rescue in February, is being liquidated, leaving many of its staff without jobs or financial security. Employees, who were caught off guard by the sudden closure, want justice and answers regarding their unpaid salaries and severance benefits.

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One former employee, who spoke to Northglen News on the condition of anonymity, described the shock and distress of losing their job without prior notice.

“We were notified that we were out of jobs on February 25, the same day the Pencil Club closed. It was a huge shock to us. We didn’t know what to do, what our legal rights were, or anything. I felt that this should have been a process. There should have been talks and negotiations,” the former employee said.

Warning signs

According to the employee, signs of financial trouble had been evident since October 2024. However, reassurances from management led staff to believe that the situation would improve in the new year.

“In November, we were paid only 50% of our salaries. The same happened at the beginning of this year and that caused enormous stress for me, especially because we had commitments such as school fees and uniforms to pay for.

“By February, we didn’t receive any salary at all. Some of us even borrowed money to get to work on the 25th, expecting to be paid and to afford transportation home. Instead, we left The Pencil Club that day with no salary, no jobs and were only given R100 for transport.”

Staff uncertainty

The source said the affected employees are considering turning to the CCMA to file formal complaints against The Pencil Club for what they believe to be unfair labour practices. They plan demanding outstanding leave pay and partial salary payments that were withheld in previous months.

“We are now considering filing a complaint with CCMA as we feel we were mistreated. We are also owed leave pay and a portion of our salaries when we were not paid in full,” the employee stated.

While the sudden closure has left many scrambling to find new employment, there is a glimmer of hope for some. A number of former Pencil Club staff have already secured jobs at a well-known restaurant in Umhlanga, providing them with much-needed financial relief during this difficult period.

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Eugene Nel of Berrangé Incorporated Attorneys and Conveyancers, who had been handling the initial business rescue process, said the company had been placed under liquidation and a liquidator, Kurt Knoop, has been appointed.

Knoop, of Manci Knoop Financial Services, said the company had been provisionally liquidated and the return date is set down for June 5, on which date the final order will be granted, unless it is opposed.

“Our intention is to realise the assets of the company which includes the contents of the business operations. The net proceeds will be utilised to pay the employees arrear salaries, leave and severance pay outstanding. The remaining creditors will be required to lodge and prove claims in order to receive a dividend. Then sales process will commence as soon as we are authorised to sell the assets and will work together with Eugene Nel in selling the immovable property simultaneously, in order to achieve a greater return for the creditors,” he said.

He added that investigations will be conducted into the affairs of the company and the causes of its failure, which is an ongoing process.

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