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Trade union Solidarity today received a written retrenchment notice confirming the possibility that up to 523 aircraft specialists at Denel Aviation/AMG would be retrenched because of the South African Air Force’s (SAAF’s) cancellation of its contract for aircraft maintenance with the company.
 
The trade union received a formal section 189 notice today and the first consultation on the retrenchments will take place on 14 January 2013.
 
According to Jack Loggenberg, Solidarity’s spokesperson, this announcement is extremely bad news for the 523 Denel employees who will be affected by the planned retrenchments. ‘It is, however, still not clear how many employees will be retrenched. This news could hardly have come at a worse time. These employees are stationed at various squadrons all over the country. They will probably not only lose their jobs, but also their air force housing within a matter of months,’ said Loggenberg. ‘There is also a dark cloud over 523 families’ Christmas holidays which is traditionally a time for relaxing and spending time with family and friends.’
 
Meanwhile, the SAAF has, to date, not said a word about the possibility of taking over the contracts of employment of some of Denel’s technicians. According to Loggenberg, the air force’s silence is understandable given its dire financial position. He added that if the air force took over some of the contracts of employment, a section 197 notice would have to be issued as well for the transfer of the contracts. Section 197 of the Labour Relations Act stipulates that employees’ conditions of service and remuneration must be kept on the same level when their contracts of employment are transferred. ‘We are concerned that the air force, to cut on expenses, will wait until all the employees have been retrenched before appointing some of them on a lower salary to do the same work.’
 
Loggenberg further said there was still no clarity on the dispute between Denel Aviation/AMG and the air force regarding who would be responsible for paying the severance packages worth millions of rands of the employees who would be retrenched. ‘According to the contract the air force will be responsible for paying out severance packages should retrenchments arise out of its contract with Denel Aviation/AMG. However, there is uncertainty over whether or not the air force will be responsible for paying out severance packages after the contract has expired. Denel Aviation/AMG maintains that the air force will still be responsible for paying the severance packages. We are concerned that if Denel Aviation/AMG were to pay the severance packages, more retrenchments would follow at the company. Denel has just gone through a process of restructuring.’
 
The Department of Defence gave notice on 20 June 2011 that it was going to cancel its contract for aircraft maintenance with Denel Aviation/AMG. Negotiations were held to amend and possibly review the contract, but last month the air force unexpectedly disclosed in a letter that it had reviewed its decision and would not be going ahead with the new contract with Denel Aviation/AMG after 31 March 2013.