MEMORANDUM OF SETTLEMENT BETWEEN SHELL PAKISTAN LIMITED AND SHELL EMPLOYEES UNION - 2006

New

FORM ‘X’

Under Section 25 (2) of the Industrial Relations Ordinance, 2002

NAME OF PARTIES

1. Shell Pakistan Limited

2. Shell Employees Union (CBA)

REPRESENTING EMPLOYERS

1. Mr. Leon Menezes - General Manager

2. Mr. Rashid Ahmad - Employee Relations Manager

3. Mr. Iftikhar Ali Khan - Installation Manager Keamari

4. Mr. M. Fazlur Rehman - Administration Officer

REPRESENTING WORKERS

1. Mr. Khan Mohammad - Human ResourcesPresident

2. Mr. M. Siddique Bhatti - Vice-President

3. Mr. Muhammad Zamir - General Secretary

4. Mr. Aurangzeb Khan - Joint Secretary

5. Mr. Shakir Ali - Treasurer

6. Mr. Tahir Hussain - Member

7. Mr. Usman Ghani - Member

This Agreement is made on this 27th day of June, 2008 between M/s. Shell Pakistan Limited, a company incorporated in Pakistan under the Companies Ordinance, 1984 and having its registered office at shell House, 6 Ch. Khaliquzzaman Road, Karachi, hereinafter referred to for brevity sake as “the Company” (which expression wherever the context so admits shall include and mean its successors and assigns) and the Shell Employees Union, having its registered office at 4 Oriental Chambers, Altaf Hussain Road, Karachi, an industry wise Trade Union, registered with the National Industrial Relations Commission under the relevant law and certified as the Collective Bargaining Agent by the Registrar, National Industrial Relations Commission vide CBA Certificate No. 6 / 85 dated 5th August, 1985 for the workers employed by the Company at its establishments throughout Pakistan, hereinafter referred to for brevity sake as “the Union” (which expression wherever the context so admits shall include and mean its successors and assigns and all present and future permanent workmen employed by the Company at its establishments throughout Pakistan).

SHORT RECITAL OF THE CASE

WHEREAS the Union in its capacity as the Collective Bargaining Agent of all workmen employed by shell Pakistan Limited Stationed anywhere in Pakistan submitted a Charter of Demands under Section 25 (1) of the Industrial Relations Ordinance, 2002 to the Company vide its letter No. SEU/786/2006 dated 21st August, 2006, which hereinafter is referred to as the “Union Charter of Demands” and is attached hereto as Annexure ‘B’.

WHEREAS the Company submitted a Charter of Demands under Section 25 (1) of IRO 2002 vide letter No. ST.GU.1 dated 22nd August, 2006, which hereinafter is referred to as the “Company Charter of Demands” and is attached hereto as Annexure “C”.

WHEREAS exhaustive discussions and negotiations have taken place on the Charter of Demands and other requests and proposals made during the negotiations and discussions held earlier between the representatives of the Union and the Company.

WHEREAS it is the intent of this Agreement to ensure better efficiency, discipline and higher productivity in order to promote and improve the industrial and economic relationship between the Company and its workers, to provide orderly means to resolve grievances through peaceful negotiations and to increase salary / wages, allowances and benefits in order to provide relief to permanent workers against any rise in the cost of living and also to modify certain non-financial terms of employment applicable to the permanent workers and to set forth herein the basic and complete agreement between the parties hereto.

NOW THE AGREEMENT HEREBY WITNESSETH as under:-

TERMS OF AGREEMENT

1. Salary Increase

Effective 1st July, 2006 workers listed in Annexure ‘A’ will be allowed a one time salary increase as follows:-

a) Workers drawing a basic salary / wage up to Rs. 9,000/-

Per month as on 30th June, 2006 ……………………………………………Rs. 2,450/-

b) Workers drawing a basic salary / wage above Rs. 9,000/-

And up to Rs. 10,500/- per month as on 30th June, 2006……………………Rs. 2, 650/-

c) Workers drawing a basic salary / wage of more than

Rs. 10,500/- per month as on 30th June, 2006………………………………..Rs. 2, 850/-

2. Salary Scales

Salary scales of all the workers have been consolidated and revised and will be those as specified in Annexure ‘A’ which shall from part of this Agreement representing all Unionised Staff of the Company throughout Pakistan.

3. House Rent Allowance

Effective 1st July, 2006 the House Rent Allowance payable to the workers listed in Annexure ‘A’ will be revised from 52% of the basic salary to 55% of the basic salary per month.

4. Conveyance Assistance Allowance

Effective 1st July, 2006 the Conveyance Assistance Allowance payable to the workers listed in Annexure ‘A’ will be revised from 37% of the basic salary PLUS Rs. 1,050/- to 40% of the basic salary PLUS Rs. 1,350/- per month.

5. Merit Increase

The Company has already introduced a new merit increase system in order to encourage and motivate the performance of workers. The scale of annual increment will remain the same and unchanged i.e.

a) High Performance : 10% of Basic Salary

(Up to 15% of workers population

b) Very Good Performance : 8% of Basic Salary

(Up to 30% - 35% of workers population)

c) Good Performance: 6% of Basic Salary

(Up to 50% of workers population)

The annual increment may be withheld by the Company in accordance with the provisions contained in the Standing Orders Ordinance, 1968 if the performance is below the accepted standard.

6. Leave Fare Assistance (LFA)

Effective 1st July, 2006 the quantum of LFA for workers in Annexure ‘A’ will be revised from Rs. 10,500/- to Rs. 12,500/- per annum, which will be payable to all eligible workers along with their salary in the month of January each year. However, those workers who have already received LFA in the month of January 2006, at the old rate for the year 2006 will be paid the difference of the aforesaid increase i.e. one time proportionate sum as arrears amounting to Rs. 1,000/- for six months (July – December, 2006). Whereas, those workers who have received LFA in the month of January, 2007 and January 2008, at the old rate for the year 2007 and 2008 will be paid one time difference i.e. Rs. 2,000/- each for the year 2007 and 2008 respectively.

7. Festival Allowance

Effective 1st July, 2006, the quantum of Festival Allowance payable to the Muslim workers shall be revised from Rs. 4,500/- to Rs. 5,000/- per annum, which will be paid within 1st week of Ramazan to defray special expenses on account of Eid-ul-Fitr. Similarly the Non – Muslim staff shall be paid this amount at least one week before their important festival i.e. Christmas. The Eid-ul-Fitr / Christmas advance shall cease to be applicable. The aforesaid amount shall not be treated as part of wages for any purpose. Those workers who have already received Festival Allowance in 2006 and 2007 at the old rate will be paid the difference of the aforesaid increase i.e. Rs. 1,000/- each along with the arrears arising out of this Settlement.

8. Ambulatory Medical Treatment for families of Upcountry workers

Ambulatory medical treatment will be allowed through registered medical practitioner having MBBS or higher qualification, for registered family members of upcountry workers (i.e. other than Karachi) in lieu of the family medical allowance which will be discontinued with immediate effect. All upcountry workers should get their family members registered with the Medical Centre at Company’s Head Office. Family means wife, male children upto the age of 22 years and unmarried female children. For claiming reimbursement for expenses relating to ambulatory medical treatment, all original receipts/paid bills and cash memos and Doctor’s prescription shall be sent along with the prescribed medical claim form (duly filled in) to the Chief Medical Officer of the Company at Karachi. Incomplete bills shall not be processed for payment.

9. Bonus

a) The Company shall pay Bonus on annual basis to the workers as listed in Annexure ‘A’ during the currency of the Agreement, which will be equal to 36% of the basic salary and the cost of living allowance paid under Section 3 (2) and (3) of the Employees’ Cost of Living (Relief) Act. 1973 earned / received during the Bonus year.

The bonus under this clause shall be paid during the month of July after the closing of accounts of the Company on 30th June of the respective accounting year.

The word ‘basic salary’ shall have the same meaning as hitherto followed and accepted for the purpose of calculation of bonus paid under the previous Agreements.

In case a worker retires, dies, is retrenched / resigns or is promoted to the Management Cadre during the bonus year, he will be entitled to receive bonus in the same proportion as the number of days he has worked in the bonus year. A probationer confirmed as permanent worker in the bonus year shall be entitled to receive proportionate bonus for the probationary period also worked in that bonus year.

b) During the currency of this Agreement, the Company on making profits during its financial year (July-June) shall pay bonus in accordance with the provisions of Standing Order 10-C of the Industrial & Commercial Employment (Standing Orders) Ordinance, 1968.

Note: In case the company changes its financial or accounting year during the currency of the Agreement from ‘July-June’ to ‘January-December’, the financial, accounting or bonus year and the payment month of the bonus mentioned herein above shall stand revised accordingly. However, in the year in which such change takes place, one time proportionate Agreed bonus on the basis mentioned in (a) above will be paid for the period July-December of the respective bonus year in the month of January, and one time proportionate Statutory bonus under Standing Order 10-C of the Industrial & Commercial Employment (Standing Orders) Ordinance, 1968 on the basis mentioned in (b) above will be paid for the period July-December of the respective bonus year in the month of March. It is specifically understood that no duplicate payment will be admissible.

10. Gratuity / Pension

Subject to the approval from the respective Government Authorities :

1. Workers / Members eligible for Pension from Burmah-Shell Pakistan Pension Fund (Applicable to Clerical & Labour Staff) will be allowed Gratuity @ 30 days basic salary for each year of service according to Shell Pakistan Labour & Clerical Staff Gratuity Fund Rules. If such workers / members surrender their Pension rights before receiving any Pension payment, they will be allowed Gratuity @ 60 days basic salary for each year of service according to Shell Pakistan Labour & Clerical Staff Gratuity Fund Rules.

2. Workers / members ineligible for Pension from Burmah-Shell Pakistan Pension Fund (Applicable to Clerical & Labour Staff) will be allowed Gratuity @ 60 days basic salary for each year of service according to shell Pakistan Labour & Clerical Staff Gratuity Fund Rules.

3. For purposes of Gratuity calculation, service will be calculated in completed years of continuous service. Such service will be increased by one-twelfth of a year for each completed month in incomplete years of continuous service.

The company will request the Trustees to make suitable amendments in the Burmah-Shell Pakistan Pension Fund and Shell Pakistan Labour and Clerical Staff Gratutity Fund, through the Supplementary Trust Deeds, in order to reflect the abovementioned provisions.

11. Medical

The present rule with regard to providing financial assistance for Surgical Operation for workers and their families will be revised as follows:-

A. Surgical Operation (for workers)

All rules and other stipulations / conditions with regard to Surgical Operation (for workers) including up-country workers shall remain unchanged except the room charges shall be reimbursed at actual or Rs. 1,500/- per day, whichever is less, upto a maximum of 30 days.

B. Surgical Operations (for families)

The present rule of providing financial assistance to the families of workers including up-country workers for surgical treatment shall be replaced with the following rule:-

i) The Surgical operation charges except in respect of any diet shall be reimbursed at actual subject to a maximum of Rs. 35,000/- for each operation.

ii) Surgical operation shall be defined as follows:-

a) Surgeon’s fee

b) Operation theatre charges including Anaesthesia

c) Medicines

d) Blood charges, if any

e) ‘X’ Ray charges

f) Laboratory charges

g) Room charges at actual or Rs. 1,500/- per day, whichever is less, up to a maximum of 30 days.

iii) Family means wife, male children up to the age of 22 years and unmarried female children, who are registered with the Company.

iv) The following conditions shall apply in each and every case of surgical operation:-

a) The Company’s Doctor shall be consulted by the worker or as the case may be his family, before undergoing any surgical treatment. The choice of Surgeon and/or Hospital for obtaining the surgical treatment shall rest with the Company’s Doctor.

b) For claiming any reimbursement for surgical operation, all receipts / paid bills and cash memos shall be countersigned by the Company’s Doctor.

D. It has also been agreed that the company will continue to co-operate in genuine medical cases.

E. The amount of cash reimbursement of medical claims at the respective location upto Rs. 1,000/- will be revised to Rs. 2,000/- Other rules / stipulations shall remain unchanged.

12. Overtime

In supersession of the previous rule on overtime and at the request of the Union, the impact on overtime on account of increases given in salary and allowances in this Agreement, have been spread and included in such items in order to improve the monthly pay package of workers. The Union undertakes not to reopen this matter before any forum or authority. The Union also agrees on behalf of all workers that no worker individually or collectively will agitate or reopen it before any forum or authority. The Union further agrees that the hourly overtime rate applicable to workers as at 30th June, 2006 will be revised w.e.f. 1.7.2006 by 10% and it shall remain valid and binding during the currency of this Agreement and it shall not be called in question before any forum or authority by the Union or any individual worker.

Without prejudice to the foregoing if there is any adverse decision in the matter by any lawful authority the Company shall be within its rights to make appropriate adjustments and reduce the increase in Salary and Allowances given in this Settlement. It is clearly understood that there shall be no increase in the Company liability/cost in this regard. The Union has undertaken to extend its full support to the Company.

13. Ex-Gratia Payment

All permanent workers on the pay roll of the Company on the date of signing of this Agreement shall receive a one time Ex-Gratia amount of Rs. 500/- Rupees Five Hundred only) to mark the occasion of signing this Agreement.

14. General Purpose loan

a) The Company’s allocation to General Purpose loan shall be revised from Rupees Fourteen Lacs to Rupees Sixteen Lacs for advancing loans for general purposes to the workers.

b) The loan amount to a worker shall not exceed his 8 month’s basic salary or Rs. 75,000/- whichever is less and shall be recoverable in 40 equal instalments. The loan amount recovered from a worker shall be available for advancing loans to other workers for the same purpose.

c) The loan amount will be administered by a Committee comprising of two representatives of the Company and two representatives of the Union duly nominated in writing by the Company and the Union respectively, for this purpose.

d) The cases of workers recommended by the Committee shall be forwarded to the Company for arranging payment.

e) Other details and procedure in this regard will remain the same as presently applicable, which have already been worked out by the Company in consultation with the Union.

15. Meal / Tea Allowance

The amount of Meal / Tea Allowance will be revised as follows:

Lunch / Dinner - From Rs. 15/- to Rs.30/-

Tea - From Rs. 4/- to Rs.8/-

Other rules / stipulations regarding Meal / Tea Allowance shall remain unchanged.

16. Haj

All rules / stipulations regarding Haj will remain unchanged except that the selection of the workers for Haj will be made firstly from those workers who are retiring from the company service in the respective year from 2009 and onwards and the draw will be held for the remaining number, so that the total number to be sent on Haj under the Government Regular Scheme does not exceed four workers.

17. Washing Allowance

Effective 1st July, 2006 the rule of washing allowance applicable to up-country workers (except located at Karachi) will be revised from Rs. 60/- to Rs. 100/- per month. Other rules / stipulations will remain unchanged.

18. Special Facilities Payment

Effective 1st July, 2006 the special facilities payment applicable to certain workers at Keamari Installation will be increased by Rs.50/- per month. Other rules / stipulations will remain unchanged.

19. Shoes Facility

Effective 1st July, 2006 the quantum of payment in lieu of shoes facility for certain workers in Annexure ‘A’ will be revised from Rs. 2,450/- per annum to Rs. 3,000/- per annum which will be payable to workers alongwith their salary in the month of January each year. However, those workers who have already received shoe facility payment in the month of January 2006, at the old rate will be paid the difference of the aforesaid increase i.e. one time proportionate sum as arrears amounting to Rs.275/- for six months (July-December, 2006). Whereas, those workers who have received shoes facility payment in the month of January 2007 and 2008 at the old rate will be paid one time difference of Rs.1100/- for these years. Other rules / stipulations regarding shoes facility will remain unchanged.

20. Group Life Insurance

The amount of Group Life Insurance will be revised from Rupees two lacs to Rupees three lacs. Other rules/stipulations will remain unchanged.

21. Cost of Living Allowance / Special Allowance / Ad-hoc Relief / Any other allowance

It is agreed that if payments like COLAs / Special Allowances / Ad – hoc relief or any other allowances are announced by the Government during the operative period of this Agreement, the increases in Salary / Allowances given in this Agreement shall be adjusted and set off against such payments.

22. Working Hours Allowance

The amount of Working Hours Allowance presently applicable to S.G. Assistant (Head Office) will be revised w.e.f. 1st July, 2006 from 20% to 25% of the basic Salary per month.

23. Rounding Off

All items including monthly Salary / Wage, Allowances, Overtime and Annual Bonuses payable to a worker shall be rounded off to a rupee. More than paisas fifty will be counted as Rs. 1/- and paisas fifty or less shall be ignored.

24.

The Union undertakes to keep industrial peace & co-operate with the Company in its efforts to increase productivity and not to resort to any activity causing curtailment of production, indiscipline, inefficiency, stoppage of work, go slow, illegal strick or refusal to work overtime by workers of any section of any establishment of the Company.

25.

The Union undertakes that all its members shall abide by and be governed by the:-

• Policy regarding Health & Safety at work & protection of the environment including, but not limited to, seat belt / helmet, mobile phone policies.

• Statement of General Business Principles.

• Security & Safety Policy.

• Drug & Alcohol Policy.

• Code of Conduct.

The Union assures for the enhancement of awareness of such matters among workers in this regard and ensuring that the workers adopt safe and healthy practices at work.

26.

The Union assures the Company its support in enforcement of new systems for better control and discipline including access and card punching systems.

27.

This Agreement is the full and final Agreement of all demands raised including those mentioned in the Charter of Demands and disputes in existence upto the signing of this Agreement.

28.

The Union undertakes not to raise or pursue, directly or indirectly during the currency of this Agreement, any demands involving direct or indirect financial commitment on the part of the Company or touching upon any matter covered by the demands enumerated in the Charter of Demands. The Union shall not raise any dispute or any demand whatsoever during the operation of this Agreement.

29.

The Union represents only the permanent workers who are presently employed and are on the roll of the Company or who may be employed hereafter by the Company at its establishment throughout Pakistan and the Company remains the sole judge for the suitability and number of workers required for various jobs, classification and types of jobs.

30.

This Agreement shall apply and its benefits be applicable to the permanent workers mentioned in Annexure ‘A’ who are on the roll of the Company, on the date of signing of this Agreement at the Company’s establishments throughout Pakistan in respect of which the Union is presently the Collective Bargaining Agent, or those who may be employed hereafter by the Company as permanent workers at such establishments.

31.

The benefits of revision of Salary, House Rent Allowance, Conveyance Allowance, LFA, Bonus, Festival Allowance (where applicable) and Gratuity / Pension under this Agreement shall also be payable on proportionate basis to all those workers who were on the roll of the Company on 1st July, 2006 and have since ceased to be in the employment of the Company.

32.

The term ‘worker’ wherever appearing in this Agreement shall mean, unless mentioned specifically otherwise, those permanent workmen only who are presently employed by the Company and are on the roll of the Company or who may be employed in future as permanent workmen at Company’s establishments throughout Pakistan as mentioned in Annexure ‘A’

33.

All existing terms and conditions of service shall continue to remain in force except to the extent modified by this Agreement.

34.

Any dispute or difference arising out of the construction or interpretation of any clause of this Agreement may be referred to a Court or Authority having jurisdiction, either by the Union or the Company, for decision. This reference shall be made only if the discussions between the Company and the Union result in disagreement on the issue in question.

35.

This Agreement shall remain in force and in effect till 30th June, 2009 and thereafter indefinitely until terminated by either party hereto upon giving to the other party, two months notice in writing of its intention to terminate this Agreement in accordance with Section 60 (2) of the IRO, 2002.

36.

If at any time after signing this Agreement, any other Trade Union is certified to be the Collective Bargaining Agent in respect of all or any of the workers employed by the Company at its establishments throughout Pakistan, the finality, validity and sanctity of this Agreement shall neither be adversely affected nor the same be challenged directly or indirectly by any other Trade Union who may become a CBA or by any worker covered under this Agreement.

37.

It is agreed that if any benefits similar to those contained in this Agreement are legislated in future then such legislated benefits shall replace, but shall not be in addition to those contained herein. Provided that if the benefits by this Agreement are more than those provided by law, the provisions of this Agreement shall prevail.

38.

The benefits given under this Agreement shall be effective from the date of signing of this Agreement unless specifically mentioned otherwise in a particular clause of this Agreement.

IN WITNESS WHEREOF the parties hereunto set their respective signatures the day, month and year first above written.

*****

Memorandum of Settlement between Shell Pakistan Limited and Shell Employees Union - 2006

Start date: → 2009-06-30
End date: → Not specified
Ratified by: → Other
Ratified on: → 2008-06-27
Name industry: → Extraction, mining, quarrying
Name industry: → Extraction of crude petroleum, Extraction of natural gas
Public/private sector: → In the private sector
Concluded by:
Name company: →  Shell Pakistan Limited
Names trade unions: → 

WAGES

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

Wage increase

Wage increase: → PKR 2450.0
Wage increase starts: → 2006-07

Once only extra payment

Once only extra payment: → 36 %
Once only extra payment due to company performance: → Yes

Extra payment for annual leave

Extra payment for annual leave: → PKR 12500.0

Premium for overtime work

Allowance for commuting work

Allowance for commuting work: → 40 % of basic wage

Meal vouchers

Meal allowances provided: → Yes
→ 30.0 per meal
Free legal assistance: → No
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