Denel sta ff get pay owed

All outstanding salaries owed to Denel workers have now been fully paid, according to the board chair of the state-owned defence equipment company, Gloria Serobe, yesterday.

She explained that the company has been experiencing serious cash flow challenges, which have hampered its ability to pay its workers.

“Denel went through a massive liquidity crisis in the last two to three years.

“This board … together with the management of Denel Group, had to dig deep looking for solutions to this challenge. At long last, all outstanding salaries owed to employees have now been fully paid.

“Payment plans are in place for pay-as-you-earn as well as the pension fund. We are not proud of this chaos and not being able to meet these obligations.

“As a chair of the board, I need to apologise profusely for the stress and the anxieties caused to the employees and their families,” she said.

Serobe said despite all the challenges Denel has faced, the company remains committed to “sound labour practice” and ensuring the welfare of its employees.

She outlined how Denel was able to access monies accrued through the Denel Medical Benefit Trust (DMBT) to pay the salaries. The trust was established in 2002 to meet Denel’s medical benefits owed to employees.

“Through the years, the assets of DMBT always exceeded the actual valued liabilities by huge amounts.

“It made no sense why this company was designed as such that Denel, the sponsor company, had no access to this large surplus, which as at April 2022 was as high as R1.472 billion.

“The exercise to start unlocking this surplus took as long as two years. Most importantly, it had to be a winwin for all involved, that is the pensioners, the members and Denel.

“To make sure that we had a proper, fair and equitable process, each of these parties had an actuary to interpret and protect them.

“Fast forward to 28 July, R992 million became that surplus which could be transferred and attributed to Denel after this elaborate exercise,” Serobe said.

She warned this would not “answer all Denel’s problems” and the company needed to be restructured. –