MEMORANDUM OF SETTLEMENT BETWEEN FATIMA FERTILIZER COMPANY LIMITED AND WORKERS UNION FATIMA FERTILIZER COMPANY LIMITED - 2014

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UNDER SECTION 2 (XVII) AND SECTION 34(1) OF PUNJAB INDUSTRIAL RELATIONS ACT 2010 READ WITH RULE 77 OF PUNJAB INDUSTRIAL RELATIONS RULES 1973

FORM “X” (Rule 77)

FORM OF AGREEMENT

(MARCH 15, 2014 – MARCH 14, 2016)

1. PARTIES TO THE SETTLEMENT

FATIMA FERTILIZER COMPANY LIMITED, a company incorporated under the Companies Ordinance 1984 having its registered office at E-110, New Super Town, Main Boulevard Defence Road, Lahore Cantt and having it manufacturing facility located at Mukhtar Garh, Sadiqabad, District Rahim Yar Khan, hereinafter referred to as the “Company” which expression wherever the context so admits shall mean and include its successors and assigns of the ONE PART;

AND

WORKERS UNION FATIMA FERTILIZER COMPANY LIMITED a registered Trade Union (Registration No. RTU/RYK/2012/02) holding Collective Bargaining Agent certificate dated: 25th February, 2012 issued by the Registrar Trade Unions Rahim Yar Khan, Labour and Human Resource Department, Government of Punjab, hereinafter referred to as the “C.B.A UNION” which expression wherever the context so admits shall mean and include its successors and assigns of the OTHER PART.

PRESENTING EMPLOYER

1. Brig. (Retd.) Syed Shaukat Ali - GM (Admin & Services)

2. Mr. Asad Waheed - Production Manager (South)

3. Mr. Raza Nazir Khawaja - Finance Manager Plant

4. Mr. Naveed Ahmed - Unit Manager (NP Production)

5. Mr. Waheed Ashraf - Sr. Engineer (O&U Production)

6. Mr. Majid Khan Lodhi - Employee Relations Manager

REPRESENTING WORKERS

1. Mr. Alamgeer - President

2. Mr. Iftikhar Hussain - General Secretary

3. Mr. Sagheer - Senior Vice President

4. Mr. Sheeraz Ahmed Bukhari - Vice President

5. Mr. Tanveer Ahmed Farrukh - Deputy Finance Secretary

6. Mr. Asim Shehzad - Information Secretary

2. SHORT RECITAL OF THE CASE

2.1 WHEREAS the C.B.A UNION, as Collective Bargaining Agent served upon the COMPANY a Charter of Demands dated: March 15, 2014.

2.2 AND WHEREAS the bilateral negotiations between the COMPANY and C.B.A Union were started consisting of series of bargaining sessions with a view to reach an amicable settlement.

2.3 AND WHEREAS the Company maintains that any improvement in the existing wage rates and allowances and other terms of employment of the workmen can be made in order to offset and neutralize the rise in cost of living during the operation of this settlement.

2.4 AND WHEREAS THE C.B.A is conscious of the need as demanded by the Management for improvement in productivity, quality, safety, work, ethics, work culture, discipline and attendance of workmen and optimum utilization of human resources, assured of its full cooperation and assistance to the Management for implementation of suitable measures in future that may be deemed fit in this regard.

2.5 AND WHEREAS in process of Collective Bargaining, in the interest of industrial peace, increase in productivity and better industrial relations it has been mutually agreed upon in full and final settlement of all the demands contained in the above mentioned Charter of Demands as under:

NOW THEREFORE THIS SETTLEMENT WITNESSETH AS UNDER:

3. TERMS OF THE SETTLEMENT

3.1 RECOGNIZATION OF RIGHTS OF PARTIES

Managing operation of the business is the exclusive right of the COMPANY, which includes but not limited to following:

3.1.1The right to direct and control the workforce, i.e. among others, the right to hire, promote, demote, transfer, maintain discipline, discharge, to create, discontinue or to reclassify jobs, to determine the number of employees needed, employees’ qualification, pre-requisites, standards of performance, work hours, job requirements, job contents and evaluation of performance of employees.

3.1.2 To establish plant and offices regulations.

3.1.3 To make optimum utilization of its workforce, tools, equipment and other resources.

3.1.4 To maintain employees’ discipline and production efficiency; and to determine the means, methods, processes materials, procedures and schedules of production. The Management’s exercise of its rights to manage shall not violate any of the expressed provisions of this settlement or applicable laws. No change to be brought through charter of demands in company policies.

It is recognized that the function of the C.B.A Union is to serve, as the Collective Bargaining Agent, on matters expressed in this settlement exclusively for permanent workers of Fatima Fertilizer Company Limited, Mukhtar Garh.

This recognition of C.B.A Union’s rights should be in no way be interpreted as lessening of the COMPANY’s responsibilities to its individual workers. For this reason, relationship between the COMPANY and C.B.A Union must be governed by the principle that the COMPANY must maintain the right to protest within the provisions of law and appeal against the action of COMPANY whenever it believes that the COMPANY’s actions were contrary to the settlement/law.

Both the parties to the settlement agree to respect and recognize each other rights discussed as above in the interest of ensuring harmonious industrial relations.

3.2 INDUSTRIAL PEACE

Agreed that during the period of this settlement neither the C.B.A Union, nor any of the workers covered by this settlement will collectively, tacitly, concertedly or individually engage in or participate, directly or indirectly in any strike, slowdown, stoppage or other interference in the process of production and Management of work during the term of this settlement. Similarly, the COMPANY agrees that during the term of this settlement, it will not declare any lockout of any of the employees covered by this settlement. The COMPANY retains the right to discipline or discharge any employee who violates this provision and to recover such damages as the COMPANY may suffer by reason of a breach thereof.

3.3 INCREASE IN BASIC SALARY

It is agreed that in order to off set neutralize the rise in cost of living and dearness, following increase in basic salary is allowed to all those permanent staff who were on payroll of the COMPANY as on March 14, 2014.

Basic Salary Slab Increase in Monthly Basic Salary
3,500 – 4,500 1300
4,501 – 6,000 1500
6,001 – 9,000 1700
9,001 – 15,000 1900
15,001 – 22,000 2000
22,001 – 30,000 2100
More than 30,000 2200

It is also agreed that during the operation of this settlement, if any financial increase in wages announced by Federal/Provincial Government, applicable to the workers covered under this settlement, will first be adjusted against the financial increase allowed under this settlement.

3.4 HAJJ SCHEME

It is agreed that every year COMPANY shall send 06 workers on Hajj through the Government scheme on Company’s expense.

3.5 ALLOWANCES

3.5.1 OUTLIVING ALLOWANCE

In order to additionally compensate employees and their families residing outside the township, exiting outliving allowance is being increased by Rs. 1,500/- per month all categories.

3.5.2 NP/CAN HARDSHIP ALLOWANCE

In order to compensate extra hardship being faced by employees working in NP/CAN Plants, an allowances of Rs. 1,000/- per month is being introduced for employees permanently deputed at NP/CAN Plants.

3.5.3 MEAL ALLOWANCE

Apart of existing Meal subsidy already being provided to employees, existing meal allowance is being raised by Rs. 500/- per month.

3.6 BONUSES

3.6.1 PROFIT BONUS (10C)

It is agreed that COMPANY shall pay profit bonus equivalent to two month’s year and basic pay for each of the financial years ending on December 31, 2013 and December 31, 2014 under schedule No. 10-C of the Standing order of Punjab Industrial & Commercial Employment Act 2012. Only those workers shall be entitled for this bonus who have at least three months of continuous service in the financial year for which bonus is due and are on payroll of the Company at the time of disbursement. In case of deceased, newly inducted and retired workers, payment will be made on prorate basis.

The above bonus for expired calendar year shall be paid in the first month of new/falling calendar year or whenever requested by C.B.A after expiry of calendar year for which bonus is due.

3.6.2 MAINTENANCE OF INDUSTRIAL PEACE INCENTIVE (MOIPI)

In consideration of the undertaking for maintenance of industrial peace and harmony, provided by the C.B.A UNION and workers, the COMPANY will pay Maintenance of Industrial Peace Incentive for the duration of settlement in the following manner:

3.6.2.1 An amount equivalent to one month’s last basic pay on completion of first year of this agreement.

3.6.2.2 An amount equivalent to two month’s last basic pay on completion of second year of this agreement.

3.6.2.3 In case of deceased, newly inducted and retired workers, payment will be made on prorate basis.

Amount of MOIPI shall not from part of wages for calculation of any other allowance/benefit.

The worker(s) would not be entitled to this incentive if any of the following happens:

• If the C.B.A Union or any other registered Union of the COMPANY serves the Management with Notice Demand or Notice of Strike while this settlement is in force.

• If the workers or any of them jointly or individually resort to any kind of strike, cessation of work, subversive activity, slow down, stoppage, interference in the process of production and Management of work or show to force through any demonstration, violation of safety rules of the company including PSM, refusal to lawful order of seniors including refusal to attend any training, meeting, slogan or displaying banners with slogans or take out procession in any section of the Plant or Township premises or at gates of Plant and /or Township or outside the Plant/Township within 200 meters of the boundary wall collectively or individually.

• Any kind of protest in any form like sticking of posters for discredit of Management of the Company explicitly or implicitly, display of protest bands, or any other impediments to the smooth functioning of Plant operations and maintenance of discipline and good order.

3.6.3 PRODUCTION BONUS

COMPANY on his own discretion shall pay worker Production bonus as per following detail:

For year ending December 2013 - Three month’s year end basic pay

For year ending December 2014 - Two month’s year end basic pay

Only those workers shall be entitled for production bonus who have completed at least three month service with the Company for the financial year in which production targets achieved and are on payroll of the COMPANY at the time of disbursement.

In case of deceased, newly inducted and retired workers, payment will be made on prorate basis.

The above bonus for expired calendar year shall be paid in the first month of new/falling calendar year or whenever requested by C.B.A after expiry of calendar year for which bonus is due.

3.7 ESTABLISHMENT OF FUND FOR TREATMENT OF HEPATITIS B & C CASES

It has been agreed that for treatment of Hepatitis B & C cases (Employees / eligible family members) for staff and Management, a contributory fund shall be established with following amount contribution:

• Rs. 200/- per month shall be contributed by each of staff employee deducted from their salaries.

• Rs. 400/- per month be contributed by each of Management employee deducted from their salaries.

Fund established shall be solely used for the treatment of Hepatitis B & C cases and priority of treatment shall be defined by Company’s doctor. Separate rules shall be developed to manage this fund.

3.8 ABOLISHING DEDUCTION OF PROJECT ALLOWANCE DURING ANNUAL LEAVE

Deduction of project allowance during annual leaves shall be ceased w.e.f. January 01, 2015.

3.9 MOTORCYCLE LOAN

No. of motorcycle loan to workers shall be increased to 30. All other terms and condition will remain same.

3.10 INCREASE IN MEAL AMOUNT DURING OFFICIAL TRAVELLING

It has been agreed to raise meal payment during official travelling to Rs. 400/- for complete day. All others terms and conditions of Company’s policy on subject shall remain same.

3.11 FINALITY

It is understood and agreed between the parties that increase in wages and improvements in other conditions of employment of workmen as specified in this Settlement/Agreement are inclusive of the increase in the Cost of Living. Accordingly, the increases in wages have been made to fully offset any increase in cost of living and/or such increase(s) that may be allowed in future. This will also adjust any increase(s) given by the Federal of Provincial Governments through any circular or directive issued/announced during the currency of this Agreement irrespective of whether or not any provision for setoff and/or adjustment is provided for therein. However, if any benefit or allowance announced by Federal/ Provincial Government which has not been addressed under scope of this settlement, the COMPANY on request of C.B.A / Union may consider said increase.

The C.B.A UNION agrees and assures that during the currency of this settlement, it shall ensure industrial peace and cooperate fully with the COMPANY in its efforts to improve efficiency, productivity, Safety, economy, discipline, work ethics etc. and guarantees to meet qualitative production norms.

The C.B.A undertakes that during the subsistence of this settlement there shall be no strike, work stoppage, violation of company rules including safety requirement, slow down or any curtailment of production / work by any means and for any reason whatsoever and it shall abide by the laws of the land, maintain complete industrial peace, ensure disciple, increase productivity, smooth and uninterrupted working of the factory/ company and its operations.

3.12 OPERATION OF THE SETTLEMENT/AGREEMENT

Subject to what has been agreed above it has been further agreed that all other demands and/or any part thereof as contained in the Charter of Demands dated March 15, 2014 at Annexure “A” will be deemed to have been dropped and/or withdrawn as having been finally settled and will not be raised again in any from whatsoever during the pendency/operation of this Settlement/Agreement. Further, any other additional/fresh demands whatsoever in future which may be involve direct or indirect financial implications or commitment or consequences on the Company will not be raised during the tenure of this Agreement.

As regard the validity of the Agreement, it is mutually agreed that the period of operation of this Settlement will be for two years i.e. effective from March 15, 2014 and up to March 14, 2016.

Thereafter, it shall continue to be binding even after the expiry of the aforesaid period unless notice in writing of the intention to terminate the Agreement is given by either party two months in advance on the expiry of which period it will be deemed to have been terminated.

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Memorandum of Settlement between Fatima Fertilizer Company Limited and Workers Union Fatima Fertilizer Company Limited - 2014

Start date: → 2014-03-15
End date: → 2016-03-14
Ratified by: → Other
Ratified on: → 2014-03-15
Name industry: → Manufacturing
Name industry: → Manufacture of chemicals and chemical products
Public/private sector: → In the private sector
Concluded by:
Name company: →  Fatima Fertilizer Company Limited
Names trade unions: → 

WAGES

Wages determined by means of pay scales: → No
Adjustment for rising costs of living: → 

Wage increase

Wage increase: → PKR 1300.0
Wage increase starts: → 2014-03

Once only extra payment

Once only extra payment due to company performance: → Yes

Premium for hardship work

Premium for hardship work: → PKR 33.0 per month

Meal vouchers

Meal allowances provided: → Yes
→ 500.0 per meal
Free legal assistance: → No
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