The North Gauteng High Court in Pretoria ruled on Tuesday morning that state-owned arms utility Denel must urgently pay over unemployment insurance and tax deductions from staff members' salaries.
The ruling comes after an urgent application from union Solidarity which sought to compel the company to do so.
This comes after Denel applied to the South African Revenue Service (SARS) for a payment deferment amid ongoing liquidity challenges, leaving staff at the mercy of Denel's financial woes. Subscribe to Fin24's newsletter here
In a short statement, Solidarity said the high court ruling was a "major victory" as compulsory payments including pay as you earn, UIF and the skills development levies indicated on salary slips, were not paid over.
Solidarity deputy general secretary Johan Botha said in the Solidarity statement that the union remained concerned about Denel's long term survival, in light of the deferment applications and previous remarks by Denel which cast doubt on the company's ability to pay salaries.
Denel spokesperson Pam Malinda told Fin24 on Monday afternoon that the arms utility had no intention of reneging on its contractual obligations towards staff in terms of salaries or unemployment insurance."Please note that Denel is committed and will always strive to meet the company's contractual obligations towards the employees in line with the employment contracts," said Malinda.