State-owned arms utility Denel was ordered yesterday by the Gauteng High Court (Pretoria) to urgently pay over unemployment insurance and tax deductions from staff members' salaries. Fin24 says the ruling comes after an urgent application from union Solidarity which sought to compel the company to do so.

This comes after Denel applied to SARS for a payment deferment amid ongoing liquidity challenges, leaving staff at the mercy of Denel's financial woes. Denel spokesperson Pam Malinda said the arms utility had no intention of reneging on its contractual obligations towards staff in terms of salaries or unemployment insurance.

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The urgent application came after Denel announced it was only able to pay a certain portion of salaries for June and July, notes a Business Day report. It then came to light that it had not paid over certain statutory compulsory payments such as PAYE, UIF and skills development levies, despite making the deductions from employees’ salaries.

Malinda said Denel would always strive to meet its contractual obligations towards employees. Denel would not say how much it owes SARS.

‘Unfortunately, we are not in a position to disclose the amount at the moment as it would compromise our discussions with SARS,’ Malinda said.

Solidarity’s Anton van der Bijl said Denel did not oppose yesterday’s court application, nor did it file any answering affidavits.

‘It is a major victory for Solidarity and the Denel employees. However, it is regrettable that we had to go to court just to draw Denel’s attention to payments that it should have made a while ago.’

Full Business Day report