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DenelFin24 reports that employees at struggling arms manufacturer Denel have been forced to cancel their private medical aid and are struggling to pay school fees, according to new court filings.

This week, 42 current and former Denel employees won an urgent interdict to compel the embattled defence group to pay them a combined R13.2 million in back pay. The loss-making state-owned arms company has been unable to pay its 2,800 employees their full salaries for the past two years. Staff are paid a percentage of their full salaries every month, in accordance with Denel's cash flow. Some months they are paid nothing at all. It is still unclear when or how Denel intends to pay employees what they are owed, although the group has said it plans to sell over R1 billion worth of "non-core" assets to raise funds. While it received a R3 billion injection from the national government in the recent budget, this has been ring-fenced for interest payments. The drastic reduction in take-home pay has forced many Denel employees to stop paying medical aid contributions and fall behind on school fees. Some employees have had their houses repossessed, while others have sold their properties to move in with family members. Many have run up hefty credit card bills which they are unable to pay off. Advocate Michael Matlapeng, who represented the 42 employees who won their case this week, said the effects of Denel holding back unpaid wages have been "crippling" for his clients. The cash crunch has been particularly hard for partners who are both employed at the arms group.  

  • Read the full original of the report in the above regard by Jan Cronje at Fin24 (subscriber access only)

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