Denel, the state-owned arms manufacturer, told the National Union of Metalworkers of South Africa (Numsa) that a 7% wage increase is unaffordable and unsustainable in the long term, but offered a 4% increase instead.

This was made known on Wednesday during a closed-door meeting between the union leaders and Denel’s board members in Centurion, where Numsa-affiliated workers picketed outside the company’s headquarters.

Regional Secretary Jerry Morulane said the meeting aimed to find a resolution on implementing a 7% wage increase.

He said: “Workers at Denel spent the duration of the meeting picketing outside in order to highlight their demands. The meeting was attended by the executive management, the board and recognised unions.”

He said Denel executives had initially approved and communicated a 7% wage increase to employees earlier this year, but the board later intervened, reversed the decision, and unilaterally implemented a 4% increase for the 2025/26 financial year.

Numsa members have rejected the proposal of 4% saying the last time workers received an increase was in 2019.

Morulane noted that during the Covid-19 lockdown, several state-owned enterprises were restructured under the leadership of then Public Enterprises Minister Pravin Gordhan.

He said: “During that time, as part of the plan to ‘save Denel’, workers endured many months without any kind of salary. Many of them lost assets, and even homes. Others were forced to take their children out of school. The financial distress caused so much misery, that unfortunately, it is alleged that two employees passed away due to suicide.”

He said Denel workers feel they made sacrifices to save the entity and now deserve a wage increase, given their struggles with the cost of living.

Acting board chairperson Gloria Serobe explained that Denel cannot afford a 7% wage increase as it would be unsustainable in the long term. 

She said Denel can afford to implement a 4% wage increase.

Morulane said: “After extensive negotiations, it was agreed by all parties that a task team or ‘war room’ would be established to find a sustainable way to fund the increase. The task team has been established to look at the practicality of the successful implementation of the corporate plan, which shall in turn, assist in funding the increase demanded by workers.” 

The task team will meet on June 27, 2025, to determine a way forward.

Numsa general secretary Irvin Jim warned during the picket that if the board did not meet workers’ demands, the union would push for its dissolution.

“We will be left with no option but to convene a meeting with the minister and part of what we will do is to call for a board that has a vision, is responsive, and is not obstructing or polarising industrial relations between workers and management,” he said.

rapula.moatshe@inl.co.za

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