Trade union Solidarity on Monday threatened to take legal action against state-owned military company Denel following news that it may not be able to pay July salaries to its 3 500 employees on time.
“The implications are immense and far-reaching and Solidarity is ready for the fight,” Helgard Cronjé, Solidarity’s sector coordinator for defence and aviation said.
He added that if salaries were not paid, Solidarity would be left with no other option but to “urgently” proceed with legal action against Denel.
In June the cash-strapped company said it could only pay 85% of salaries due to cash-flow problems.
Public enterprises minister Pravin Gordhan added that all salaries for June had been paid in full.
It was later revealed that Denel staff had been paid their salaries but not their pension contributions.
Denel CEO Danie du Toit indicated on Monday that the arms company was in constant talks with local banks to secure a bridging loan.
Earlier this month Denel asked the state for a R2.8-billion cash injection to help it through its current financial difficulties.
According to Cronjé, “recapitalisation” alone will not solve Denel’s financial crisis as it is a “short-term solution” at best
