Trade union Uasa has also expressed concern about Denel’s ability to pay employees their December salaries. Picture: THE TIMES
Trade union Uasa has also expressed concern about Denel’s ability to pay employees their December salaries. Picture: THE TIMES

The trade union Uasa says it is seeking a mandate from Denel workers about the legal action they want taken against the company for withholding their "self-funded" bonuses.

Uasa, which has equated the nonpayment to fraud and theft, said its members had been left fuming in November when Denel failed to pay them the 13th cheque towards which they had contributed during 2017.

It has also expressed concern about Denel’s ability to pay employees their December salaries, as indications are that the financially unstable company’s situation has deteriorated.

In a reply to the union’s questions about the issue, Denel said it was awaiting guidance from the Treasury before it could confirm when the payments would be made.

Denel is one of a number of state-owned entities (SOEs) that are in financial distress.

"Uasa interprets this statement, from a technical perspective, as Denel committing fraud by ‘withholding’ or ‘stealing’ the workers’ own money," union leader Willie van Eeden said.

"Noting the serious financial difficulty within Denel, one has to ask the question if there will be funds available for salary payments at the end of December 2017," Van Eeden said.

The union said that the Denel CEO and chief financial officer were due to receive 50% of their annual salaries as performance bonuses, despite the financial setbacks experienced by the company’s personnel.

The company has told Business Day the delays are due to "severe liquidity" problems and it is engaging its stakeholders about the issue.

"We can therefore confirm that employees have unfortunately been affected by this through the delayed payment," Denel spokeswoman Pamela Malinda said.

Denel would not answer questions about the uses that the funds saved by the employees had been put to.

This is also the second year that the company has postponed even its own contractually determined performance bonus payments, Uasa said.

The union said it pushed back when the company cited financial difficulties, securing a staggered payment commitment from Denel for 2017, with the last payment scheduled for March 2018.

Uasa said it was now doubting that guarantee.

Van Eeden said the challenges at the SOE were broader than just its struggles to pay workers, raising concern about the effect of its liquidity problems on suppliers’ payments and other services.

"Serious concerns related to the current management of the business, loyal clients and suppliers losing trust in Denel due to short or no payment, late delivery dates, and their alleged links with the Gupta family, led to an outcry for action from Denel employees," Van Eeden said.

Mahlakoanat@businesslive.co.za

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