Denel backtracks on not paying May salaries

Arms manufacturer, Denel informed unions ealier this month that it cannot pay May salaries. Photo: Reuters
Arms manufacturer, Denel informed unions ealier this month that it cannot pay May salaries. Photo: Reuters

Denel employees will breathe a sigh of relief as most will still be able to pay their bills this month end.

The trade union representing some of the state arms manufacturer's employees, the National Union of Metalworkers of South Africa (NUMSA), said management agreed to pay May salaries to its members, notably the lowest paid workers.

Denel told the unions earlier this month that it won't be able to pay salaries at the end of May. At the time, Solidarity, the other trade union at Denel said management informed it that it was facing liquidity woes that because it has orders to the value of R101 million that it could not deliver due to the lockdown.

NUMSA said upon receiving the news unions have asked for engagement with the board and shareholder, the department of public enterprises, hoping to find a "viable plan long term economic plan" for Denel as this is not the first time the company has struggled to pay salaries.

Denel has found itself in a similar situation in the past - between 2018 and 2019, there were periods where it offered to pay a fraction of workers' salaries. 

"Our members and their families have suffered as a result of this delay. This is not the first time Denel has struggled to pay salaries, and it cannot continue any longer. A sustainable solution to Denel's challenges must be found," said NUMSA in a statement.

The union said Denel management will announce more details about the payment of May salaries in due course.

Compiled by Londiwe Buthelezi

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