MEMORANDUM OF SETTLEMENT BETWEEN RAFHAN BEST FOODS LTD AND THE EMPLOYEES UNION – RAFHAN BEST FOODS LTD - 2012

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UNDER INDUSTRIAL RELATIONS ACT, 2012

Effective from 1st April, 2012 to 31st March, 2014

REPRESENTING MANAGEMENT

Ahmed Ali Zia – HR Director

Amar Naseer – Legal Director & Company Secretary

M. Irfan Bhatti – Works Manager

Mohsin Nishat – HRBP – SC

Fouzia Ishaque – NERM

Imtiaz Jalil – Commercial Manager

Muhammad Waseem – Controller

Ruhkaam Karimian – Factory HRBP

Moiz Idris Rajput – Finance Business

Tayyab Siraj – JM – HR

REPRESENTING WORKER

Iftikhar Ahmed Anjum – President

Muhammad Aslam – General Secretary

Richard Patrick – Joint Secretary

Muhammad Bilal – Joint Committee Member

Muhammad Asif – Joint Committee Member

SHORT RECITAL OF THE CASE

The Employees Union – Rafhan Best Foods Ltd. Kasur (Regd.), the Collective Bargaining Agent (hereinafter called ‘C.B.A’ of Rafhan Best Foods Ltd. submitted the Charter of Demands (Annexure-A) vide their letter No. Nil dated July 18, 2012 to Unilever Pakistan Foods Ltd. (Formerly Rafhan Foods Ltd.) (hereinafter called the “Company”).

A series of meeting were held between the representatives nominated by the C.B.A and the Company for bilateral negotiations and collective bargaining. Finally, the following Agreement has been arrived at in full and final settlement of the above Charter of Demand which shall remain binding on both the parties w.e.f. 1st April, 2012 to 31st March, 2014 for a period of two years.

1. ANNUAL INCREMENTS

In view of the rise in cost of living, the company agrees to pay to its permanent workers an increase in basic salary amounting to Rs. 1,300 per month w.e.f. 1st April, 2012.

The company has also agreed to pay its permanent workers a further increase in basic salary amounting to Rs. 1,300 per month w.e.f. 1st April, 2013.

2. ANNUAL BONUS

It is also agreed to pay 11 Bonuses and 1 Bonus under 10C to all permanent worker employed in the factory on the date of execution of this settlement. The bonuses are agreed to be paid for the period of 1st April, 2012 to 31st March, 2014. The net entitlement of bonus per worker is 11 agreement bonuses and 1 bonus under section 10C per annum subject to profit earning of company and will be paid in addition to the 11 bonuses agreed.

The above bonuses will be payable to permanent employees who are in the employment of the company on the date of signing of this settlement, however, the employees who have joined company’s service on or after 1st April, 2012 shall be entitled to these bonuses on pro-rata basis as detailed in their appointment letter.

BONUS CALCULATIONS

11 Bonuses: Basic + Cola 205 + 18% indexation

1 Bonus under section 10C Bonus (Profit Based): Basic + Cola 205 +18% indexation + Cola 93 + Cola 94 + Cola 97.

PERFORMANCE BASED APPARISAL SYSTEM

In order to embed performance culture and align ourselves with high performing organizations in the country, it is felt that we need to have a structured program for enhancing team / individual performance and reward employees accordingly.

The achieve this objective, it has been agreed that w.e.f. the bonus for the financial year 2011, a reasonable portion of the agreed amount of bonus will be paid to employed based on their performance, the details etc. for its implementation will be discussed and agreed as detailed in the succeeding paras. To achieve the above objective a committee for this purpose has been constituted. The committee will start its working immediately after the signing of this agreement.

The committee will decide the ratio of bonus to be linked with performance and also formulate a mechanism for determining individual / team performance which will be linked with the apportioned ratio of bonus to be distributed on the agreed basis.

The committee will meet as many times as may be necessary, and all efforts will be made to finalize its recommendation not later than 31st July, 2013 incorporating the following.

• Performance matrix to be applicable to every member of the factory staff.

• Ration of bonus to be apportioned to be linked with performance.

• Criteria for payment of performance bonus with rated which be applied for payment of bonus.

The employees union undertakes that on finalization of the above scheme, it will be its responsibility to communicate the same to all factory staff. It is also agreed that the implementation of the decided mechanism will be done once the hiring of new entrants is completed and the newly hired employees are deployed on their jobs.

3. UMRAH, NON-MUSLIM RELIGIOUS ZIARAT AND HAJJ

The company has agreed to pay Rs. 100,000/- (Rs. One hundred thousand only) to permanent employees for the purpose of performing Umrah/Religious Ziarat (in case of non-Muslims) for 2 persons per annum. However, they have to provide proof of such Umrah/Ziarat to the satisfaction of company. The person will be chosen through balloting and he will be entitled for 15 days leaves with pay. A person who has once been selected for this purpose through the company balloting process and has availed the facility shall not be eligible to the future balloting.

In addition, 1 seat has also been introduction for Hajj at the rate prescribed by the Government. The procedure for selection of the eligible candidate has been discusses and agrees with the C.B.A. Moreover, the number of days spent on Hajj will be allowed as a special leave with pay.

4. COMPANY LOAN FUND

It has been agreed that the company will provide total company loan fund of Rs. 60,000/- (Rs. Sixty thousand only).

The maximum amount to an individual will be paid on the basis of maximum 3 salaries i.e. (Basic pay, Cola 205 & 18% indexation). To be eligible for such loan, the individual must a permanent employee of the company for 5 years. The loan will be paid back to the company in eighteen equal installments without interest.

5. HOUSE BUILDING/MOTORCYCLE/COMPUTER LOAN

It is agreed that total amount of Rs. 1,600,000/- will be available to permanent employees as House Building loan with maximum loan of Rs. 80,000/- per permanent employee. The interest will be charged @ 9% for five years. The loan will be returned in sixty equal installments (50% deduction from the salary + 50% from bonus). To be eligible for such a loan, the individual must be a permanent employee of the company for 3 years and the registry of the property must be valid. The above facility will also be available for purchase a motorcycle & computer, however, an employee can exercise this option only once for either house building, motorcycle or computer.

6. COMPUTER ALLOWANCE

It has been agreed that permanent employees operating computers will be given an allowance of Rs. 250/- per month provided that they are spending at least 75% of their time on the computer.

7. MONTHLY POD

Purchase of company products of worth Rs. 1,800/- (Rs. Eighteen hundred only) at 50% discount per month. UPFL permanent workers can also buy product of the affiliate company, Unilever Pakistan Ltd.

8. BURIAL EXPENSES

It has been agreed that the company will pay Rs. 15,000/- (Rs. Fifteen thousand only) at as funeral expenses on the death of a permanent employee to the widow of employee and if the widow is not surviving to the legal eldest child of permanent employee.

9. ANNUAL LEAVES

It has been agreed that 21 leaves will continue as per previous practice.

10. LONG SERVICE AWARD

The Management agrees to give the following Service Award to permanent employees on completion of their respective service periods.

Service Period Award
10 years Rs. 7,000
15 years Rs. 14,000
20 years Rs. 16,000
25 years Rs. 18,000

11. EDUCATION SCHOLARSHIP

The company agrees to grant 10 scholarships to the children of permanent employees of the company which will be allowed as per following amount.

a) Matric Rs. 400/- per month plus Rs. 200/- on securing 60% or more marks.

b) Intermediate Rs. 450/- per month plus Rs. 200/- on securing 60% or more marks.

c) Graduation Rs. 500/- per month plus Rs. 200/- on securing 60% or more marks.

d) Post-Graduation Rs. 550/- per month plus Rs. 200/- on securing 60% or more marks.

12. MARRIAGE ALLOWANCE

It has been agreed to pay to permanent employees an amount of Rs. 10,000/- (Rs. Ten thousand only) on marriage as ex-gratia for marriage of self, daughter and dependent sister. An employee can have a maximum 02 cases per annum. In total, there can only be a maximum of 07 such double cases in a calendar year. The left over double cases can be carried forward in the next year. It has also been agreed that claims will be disposed-off on monthly basis. In case an employee is left out of the double during the calendar year due to the completion of double cases, the individual will have the right to apply out of the quota of the next year. To be eligible for this allowance the individual must be a permanent employee of the company for 02 years. In all 14 single cases or 7 double cases will be entertained in each calendar year.

13. MEDICAL FACILITY

It has been agreed that medical facility will be continued as per previous practices for those three employees who are not covered under social security scheme.

These permanent employees will be paid allowance of 07% of basic salary + COLAS + 18% indexation + House Rent + Conveyance Allowance + Special Allowances (Rs. 450/-).

The 07% medical allowance will also be admissible at the close of the year at the actual earning of night and evening shift allowances.

14. NIGHT / EVENING / FOOD ALLOWANCE

It has been agreed to pay an evening shift allowance of Rs. 25/- and night shift allowance Rs. 50/- per shift.

15. OVERTIME

It has been agreed that overtime will be paid to all permanent employees on the basis of basic + colas + 18% indexation + house rent + conveyance allowance. Prior approval from supervisor and/or other authorized personnel is required for overtime as per previous practice.

16. PROVIDENT FUND STATEMENT

Provident Fund annual statement will be arranged for factory staff.

17. RECREATION / PASSAGE ALLOWANCE

It is agreed that Passage Allowance for permanent employees will be paid inclusive of (basic salary, COLAS and 18% indexation) x 1.07. However, it will be admissible up to eight absences during the year.

18. WHEAT ADVANCE

It has been agreed that Government applicable price will be final for advancing loan to permanent employees, for buying 20 mounds of wheat. This amount will be deducted from employee’s salary every month in 12 equal installments without any interest.

19. COLAS

No change in previous practices. Follow law of the land.

20. CONVEYANCE

It has been agreed that the company will provide conveyance to permanent employees travelling from Lahore during the regular shift. It is expected that not more than 13 employees will avail this facility. In case the number increase, C.B.A will inform the company accordingly well in advance in order that the appropriate conveyance can be arranged. It has been further agreed that factory management and C.B.A will sit together and optimize the route for existing transport facility to accommodate patoki as well in the existing route throughout the shifts. It will be insured that the cost remains within the budgeted amount.

21. TOP GRADE WORKERS

Company will encourage the factory staff to apply for management positions through company’s Open Job Posting and follow the company’s recruitment process.

22. SPORT FOR FITNESS

Sports Facility will be provided as agreed in the last agreement dated 23rd June, 2011.

23. BREAKFAST

It has been agreed breakfast will be provided to:

(i)Shift “A” at arrival (6:00 a.m.)

(ii)Shift “C” at departure (6:00 a.m.) only for declared chronic diseases employees on recommendation of Company Doctor.

24. REFRESHMENTS

It has been agreed that in shift “C” 2 biscuit tikki packs worth Rs. 5/- will be served along-with tea to all on duty workers.

ACCEPTABILITY & APPLICABILITY

This settlement applies only to the permanent workers presently employed and on roll of the company at the time of signing of this settlement. The terms and condition of the settlement shall not be applicable to any employee if employed by the company in future nor shall the C.B.A raise any dispute in this regard. The new employees recruited in future shall be governed on the basis of terms of employment to be stated in their appointment letters.

GENERAL

This settlement is subject to compatibility with Federal Government Laws and Ordinance or Regulations there under. Any provision of the settlement which violates any Federal Government Law and Ordinance or Regulations made there under shall be amended to bring it in accordance with relevant laws. The benefits received under this settlement will not be admissible in addition to any similar or comparable benefit/s under any other law for the time being in force or is likely to be enforced by the Provincial and Federal Government provided that it is specifically mentioned in such laws, Ordinance or Rule framed there under.

The C.B.A undertakes not to raise any demand having financial implication during the period that this settlement remains in force i.e. up to 31st March, 2014.

This agreement will continue to remain in force up to 31st March, 2014 and can be terminated by either party by giving two months notice in writing to the other party communicating their intention to be no longer bound by the settlement.

It is agreed between the parties that this SETTLEMENT has finally settled all the demands included in Charter of Demand and also all the matters raised or could have been raised and discussed in the dialogue proceedings and the C.B.A agrees and undertakes that it will not raise any demand during the aforesaid operation of this SETTLEMENT.

The C.B.A undertake and guarantee good behavior and full cooperation for maintenance of discipline and industrial peace during the tenure of the settlement and agrees to the development of work force time to time and as and when considered expedient by the Company according to the work requirements. The C.B.A further undertakes that in case of any difference it would seek redress or grievance in accordance with provision of law and will not indulge in indiscipline or disturbance of industrial peace and will ensure that there is no stoppage or working on the part of workers nor will they adopt any go-slow tactics.

This settlement has been signed on June 07, 2013 at Lahore.

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Memorandum of Settlement between Rafhan Best Foods Ltd and The Employees Union – Rafhan Best Foods Ltd - 2012

Start date: → 2012-04-01
End date: → 2014-03-31
Ratified by: → Other
Ratified on: → 2013-06-07
Name industry: → Manufacturing
Name industry: → Manufacture of beverages, Manufacture of food products
Public/private sector: → In the private sector
Concluded by:
Name company: →  Rafhan Best Foods Ltd
Names trade unions: → 

WORK AND FAMILY ARRANGEMENTS

Job security after maternity leave: → 
Prohibition of discrimination related to maternity: → 
Prohibition to oblige pregnant or breastfeeding workers to perform dangerous or unhealthy work: → 
Workplace risk assessment on the safety and health of pregnant or nursing women: → 
Availability of alternatives to dangerous or unhealthy work for pregnant or breastfeeding workers: → 
Time off for prenatal medical examinations: → 
Prohibition of screening for pregnancy before regularising non-standard workers: → 
Prohibition of screening for pregnancy before promotion: → 
Facilities for nursing mothers: → No
Employer-provided childcare facilities: → No
Employer-subsidized childcare facilities: → No
Monetary tuition/subsidy for children's education: → Yes

WORKING HOURS, SCHEDULES AND HOLIDAYS

Paid annual leave: → 21.0 days
Paid annual leave: →  weeks
Provisions on flexible work arrangements: → No

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: → 2012-04

Once only extra payment

Once only extra payment due to company performance: → No

Premium for evening or night work

Premium for evening or night work: → PKR 12.0 per month
Premium for night work only: → Yes

Premium for overtime work

Allowance for commuting work

Allowance for seniority

Allowance for seniority: → PKR 7000.0 per month
Allowance for seniority after: → 10 years of service

Meal vouchers

Meal allowances provided: → No
Free legal assistance: → No
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