South Africa’s High Court ruled on Tuesday that cash-strapped state arms manufacturer Denel must pay taxes and other payments deducted from employees’ pay but not delivered to the tax office and other institutions, the Solidarity union said on Tuesday.
The North Gauteng High Court ruled that Denel must urgently pay over unemployment insurance and tax deductions from staff members' salaries. Trade union Solidarity celebrated its legal victory against state-owned arms utility Denel after the high court ruled.
This comes after Denel applied to the South African Revenue Service (SARS) for a payment deferment amid ongoing liquidity challenges, leaving staff at the mercy of Denel's financial woes.
The ruling comes after an urgent application from union Solidarity which sought to compel the company to do so. In a short statement, Solidarity said the high court ruling was a "major victory" as compulsory payments including pay as you earn, UIF and the skills development levies indicated on salary slips, were not paid over.
Although Solidarity deputy general secretary Johan Botha said in the Solidarity statement that the union remained concerned about Denel's long term survival, in light of the deferment applications and previous remarks by Denel which cast doubt on the company’s ability to pay salaries.
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