Denel needs R600 million to pay withheld salaries
CAPE TOWN - Denel executives met yesterday with trade unions to discuss what steps will be taken, to ensure that workers salaries and bonuses are paid.
This comes after the arms deals supplier failed to pay workers self-made bonuses at the end of November this year.
Workers forgo a part of their monthly salary which is then due to be paid out to them at the end of November. This money essentially serves as a bonus for December.
It should be noted that this is also the second time that bonuses have been withheld.
The first time that Denel withheld bonuses was in August last year. Workers were supposed to receive a bonus in August but only received it on December 23, 2016.
READ: Denel workers enraged after bonuses withheld
“We were briefed yesterday by Denel CEO and CFO on the company’s financial state. They acknowledged that they are facing huge liquidity problems”, said United Association of South Africa (UASA) Sector Manager, Willie van Eeden.
“They said they have met with Treasury prior to attending this meeting and are expecting feedback this Thursday to get relief”, added van Eeden.
According to Denel, they are in need of R600 million. Of this amount, approximately R350 million is needed to pay suppliers while the remaining R250 million is needed to pay salaries and bonuses.
“Employees are disgusted and in tears”, said van Eeden.
Although this scenario is devastating to Denel employees, van Eeden said that the unions will not embark on strike action.
They simply want to receive the money that is due to them.
If the entire amount cannot be paid to them, at least an interim payment will keep the workers on their feet, said van Eeden.
Until then, Denel and its employees are anticipating the outcome from Treasury tomorrow, December 14.
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- BUSINESS REPORT ONLINE