Denel unions win attachment order
The Johannesburg labour court granted two unions a warrant of execution to attach assets belonging to arms maker Denel worth R12.7m to pay outstanding salaries to its workers.
The Johannesburg labour court granted two unions a warrant of execution to attach assets belonging to arms maker Denel worth R12.7m to pay outstanding salaries to its workers.
The arms maker, which is critical to SA’s defence strategy, is facing a cash crisis and has lost R4.4bn in the past three years. It is being run by an acting CEO, the third since August 2020.
Four board members resigned in January and board chair Monhla Hlahla and CFO Carmen le Grange have resigned in recent days. This was because the Treasury, in the budget, failed to provide sufficient funding desperately needed by the arms utility, Reuters said.
Denel is one of the victims of the rampant state capture that marked former president Jacob Zuma’s presidency. Dedicated project funds were misused and key tenders and jobs were awarded to friends and loyalists of the former president and his friends, the Gupta family — according to submissions at the state capture commission.
Turnaround plans, including plans to sell noncore assets, have not yet brought the entity to profitability.
The labour court judgment on Thursday, which allows the sheriff to attach assets, is the result of a lengthy legal battle between unions Solidarity and Uasa, and Denel.
The two unions approached the labour court in 2020 to challenge the arms maker’s decision to cut staff salaries and pension and medical aid benefits from May to July 2020.
At the time, judge Andre van Niekerk ruled against Denel, saying it had “breached the most fundamental obligations of the employer in an employment relationship — to pay for work done”.
He ordered that the money be repaid by August 7. This has not yet been done.
Solidarity’s co-ordinator for defence and aviation, Helgard Cronje, said before winning warrants of execution against seven divisions of the arms marker, it had to first go to court to force Denel to detail exactly what was owed.
He said the unions would be cautious when seizing assets and added the sheriff cannot seize intellectual property, anything that is confidential or necessary to generate income.
Cronje said in a statement that “employees in the public sector are tired of constantly having to bear the brunt of corruption and ignorance in their businesses”.
In a second application, the two unions have also asked the Johannesburg labour court to find former CEOs Talib Sadik, Danie Claassen and Denel directors in contempt of court in their personal capacity for ignoring the order to pay salaries. Judgment in this case has not yet been given.
Sadik, who was CEO from 2008 to 2012 and took on a temporary contract in August, did not have his contract renewed in February.
EMPLOYEES IN THE PUBLIC SECTOR ARE TIRED OF HAVING TO BEAR THE BRUNT OF CORRUPTION AND IGNORANCE IN THEIR BUSINESSES