DENEL EMPLOYEES INFORMED ABOUT FUTURE OF SAAF CONTRACT

13 December 2012

Denel has initiated a process of communication with employees of the Denel Personnel Solutions (DPS) / Aero Manpower Group (AMG) regarding the future of a contract to supply personnel to the South African Air Force to ensure its operations.

The CEO of Denel Aviation, Mike Kgobe, is currently conducting a road show to all affected employees across the SAAF bases, squadrons and units to explain the situation and the process to be followed.

The company will also engage with relevant unions in terms of Section 189A of the Labour Relations Act, 1995 in an effort to reach consensus on issues that will affect the potential future employment of the relevant employees.

Denel Personnel Solutions has sub-contracted expertise and employees to the SAAF since 1986 through the AMG contract. The contract was terminated and the termination notice period comes to an end on 31 March 2013.

The SAAF has informed DPS that the existing contract will come to an end at the termination date. Because DPS has no contract or order cover beyond this date the company has no other option but to consider retrenchment for the entire DPS/AMG workforce.

However, Denel is currently considering alternatives to retrenchments for the 538 affected DPS / AMG employees, including all possibilities for alternative employment..

Denel has initiated the requisite consultation process with the representative unions.

Denel will continue to negotiate with the SAAF to determine whether alternative solutions for the future of the contract can be found. Denel is still hopeful and believe that it will find an amicable solution through our on-going discussions with the SAAF and the SANDF.

Statement issued by Sinah Phochana, Group Communications Manager, Denel, December 13 2012

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