Denel ordered to pay outstanding salaries

South Africa’s Labour Court on Tuesday ordered state defence firm Denel to pay workers outstanding salaries for May, June and July by no later than Friday, August  7, a copy of the court judgment showed.

The case against Denel was brought by two trade unions, Solidarity and UASA, on behalf of their members after the weapons manufacturer did not pay salaries in full.

Denel, which makes equipment ranging from armoured vehicles to missiles, has struggled to pay staff salaries amid a liquidity crisis aggravated by the Covid-19 pandemic.

It is one of a number of struggling state enterprises the government has been keeping afloat with bailouts.

A Denel spokeswoman said the company was preparing to comment in a statement.

As well as paying outstanding salaries, Denel will have to meet statutory obligations such as making payments to its employee pension fund, which it has also struggled to do in recent months.

It was not immediately clear where Denel would find the money, given its severe cashflow constraints.