Trade union Solidarity's deputy general secretary Johan Botha has confirmed receiving notification from Denel on Monday afternoon that the company is not in a position to pay its employees full salaries.
Denel said that it can only be able to pay 85% of salaries stating cash flow problems as the primary reason.
At this point, we are still in the dark for specific reasons as to why they cannot pay salaries they only said it's due to cashflow problems.— Johan Botha, deputy general secretary - Solidarity
Botha says it is a problem and an inconvenience that Denel only informed employees a day before payday that they won't be getting their full salaries.
We had an arrangement with Denel that if there is going to be a problem they should inform organised labour around the 14th or 15th of every month so that we can at least manage our members' expectations and assist Denel to soften the blow.— Johan Botha, deputy general secretary - Solidarity
According to Botha, the union has written to the CEO asking for clarity as to when the 15% will be paid. He says Denel only acknowledged receiving the letter but there was no formal response to the question.
At this point in time employees are concerned that if it happened once, there is a possibility that it might happen in the future. So we don't know if this is a trend that will be followed.— Johan Botha, deputy general secretary - Solidarity
To hear the rest of the conversation, listen below: