Trade union UASA has set up a fund to assist its members after the embattled state-owned enterprise, Denel, abruptly announced that it would not be able to pay its employees in May. The union says they will be taking the matter to court.
State-owned defence and technology company, Denel has not paid its employees for May and says the same may apply to the months of June and July. Danie du Toit, group chief executive officer of Denel, attributes the situation to "liquidity issues" exacerbated by the Covid-19 pandemic. The company has been unable to pay its employees despite bringing back only 30% of its workforce since lockdown regulations were eased.
Trade union, UASA, has slammed Denel's decision not to pay staff, saying it came at the eleventh hour and that workers cannot afford to lose their income, especially at this crucial time.
"We were disappointed that it was a very last minute decision," said UASA spokesperson, Stanford Mazhindu.
According to Denel's public affairs group manager, Pam Malinda, employees were informed of the decision on 19 May - less than a week before employees were to receive their salaries.
"Denel is not in a position to pay salaries to employees...