Where are you, Pravin Gordhan, when Denel needs you?

“Where is Pravin Gordhan? Where are the political leaders with all their empty promises? Where are the trade unions? Are we, the Denel employees, also part of the South African democracy? Employees need answers urgently.”

This is the simple plea of a Denel employee who wrote an open letter on Monday to draw attention to the plight of Denel employees, who have now not been paid for second consecutive month. They have lost their houses, their cars and everything they have worked for.

Their credit records are littered with missed payments. Their creditors do not want to hear stories of their salaries that will be paid someday soon, because the money never comes. They feel abandoned and scared. Just the other day, one of the managers stopped an employee from taking her own life because of financial stress.

ALSO READ: Unpaid Denel workers killing themselves, living out of their cars

Denel employees did not receive a full salary since May 2020

The open letter says it all: Denel is in a financial crisis and since May 2020, employees receive a letter every month informing them that the company will not be able to pay their full salaries. Until the end of May this year, they still received a late payment of 20% of their salaries every month.

However, at the end of June and now at the end of July, they have not been paid at all. Denel has also not paid employees’ pension payments for months now.

“In the beginning, Covid was to blame for this, but now we all know it is due to corruption and mismanagement of finances. Some employees even lost their houses due to this. Some employees are living out of their vehicles. Some even took a more severe route and committed suicide. For some, the only option is to resign,” the employee writes.

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“When all of this started, the majority of employees had a perfect credit record, but now some of them cannot even get assistance from the banks due to a bad credit record. Denel is to blame for this. Employees even told me that they think this is what Denel wants. It will save them a lot of money if employees resign instead of the company giving them retrenchment packages.”

‘What are we supposed to do?’

And then comes the heart-wrenching plea: “What surprises me the most is that nobody is doing anything. We keep on hearing about Solidarity that is going to court. We realise court action takes time, but some employees cannot afford to wait for months. Try and explain that to your bank.

“The last time the CEO had something to say, he told employees ‘we are trying everything possible, we are expecting answers at the earliest in October 2021’. What are the employees supposed to do in the meantime until October?”

ALSO READ: Suffering Denel employees’ in for more hell, with no pay in May

The employee writes that when South African Airways (SAA) was in the same position, it was front-page news all over South Africa.

“Why not the same with Denel? Nothing is different. They are all human beings or maybe there is some other hidden agenda when it comes to SAA. Not once did we hear our dearest minister of SOEs [state-owned enterprises] say anything regarding Denel, but with SAA he was all over the place.”

No cash flow at Denel Land Systems

Another employee, who spoke to The Citizen on condition of anonymity, said Denel Land Systems had no cash flow and if any cash comes in, it is swallowed by the overdraft.

“Management says nothing and we do not know if they do not know or if they are actually doing something.”

He says many people are literally on the street. Many have resigned to get their pension money to pay their debts, but they have not received the full amount. Denel Land Systems used to have 780 employees, but after all the resignations, only 311 are left. About 99% of the employees who resign do not have another job lined up.

Those who are left are allowed to work from home and go into the office once a week. They have to buy their own data and airtime. According to this employee, Denel owes millions of rands in tax, pension and salaries. The SOE owes South African Revenue Service [Sars] employee tax to the value of R83 million and the staff about R60 million in salaries.

Letter from the CEO

Phaladi Petje, interim CEO of Denel Land Systems, wrote in the latest letter to staff that had management “explored and exhausted all possible cash generating projects in the immediate term”.

“Regrettably, we were unable to realise any cash to pay overdue salaries for June and July. Employees in need of individual and personalised letters to communicate this reality to creditors are welcome to forward their requests to the relevant HRBP [human resources business partner].

“We are monitoring all cash collection efforts on a regular basis and remain positive that the situation will improve in the next few months. We would like to call upon all employees to stand together, help each other where possible and remain united as a division. These are trying times for Denel Land Systems and only unity and commitment can take us out of this,” he writes.

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“We urge all employees who can to avail themselves and help as much as possible with the execution of available orders so we can invoice and generate cash. We further call upon all employees with the means (no matter how limited) to help and support fellow employees with basics. This can be done by contacting the wellness office or fellow employees directly.”

Addressing the problem employees reportedly have with IRP5s, Petje writes that an investigation was conducted and it was confirmed that all employees’ IRP5 forms had included their Temporary Employer-Employee Relief Scheme (Ters) payments as taxable income, which was not the case. New IRP5s were generated and sent out to all employees.

“Employees may now file their returns and those who had already done so using the previous IRP5s, can also re-submit their tax returns, as we have communicated the updated information to Sars

“We wish to thank you for your patience and support throughout this difficult period of uncertainties. Please stay safe and observe all Covid protocols. We need all the required hands on deck as we endeavour to unlock sales in the short term,” Petje writes.