MEMORANDUM OF SETTLEMENT BETWEEN SHELL PAKISTAN LIMITED AND SHELL EMPLOYEES UNION - 2015

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FORM ‘X’

NAME OF PARTIES

1. Shell Pakistan Limited

2. Shell Employees Union (C.B.A)

REPRESENTING EMPLOYERS

1. Ms. Madiha Khalid - Human Resource Manager

2. Mr. Masroor Khan - Manager Facilities

3. Syed Rameez Arif - Administration Officer

4. Syed Zubair Ali - Country HR Proximate

REPRESENTING WORKERS

1.Mr. Khan Mohammad - President

2. Mr. Mujibur Rehman - Vice President

3. Mr. Muhammad Zamir - General Secretary

4. Mr. Aurangzeb Khan - Joint Secertary

5. Mr. Shakir Ali - Treasurer

6. Mr. Tahir Hussain - Member

7. Mr. Usman Ghani - Member

8. Mr. Azhar Mehmood - Member

9. Mr. Naubat Khan - Member

This Agreement is made on this 27th day of May, 2014 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 for brevity sake as “the Company” (which expression wherever the context so admits shall include and mean it successors and assigns) and the Shell Employees Union, having its registered office at 4 Oriental Chambers, Altaf Hussain Road, Karachi, as 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 C.B.A Certificate No. 6/85 dated 5th August, 1985 for the workers employed by the Company at its establishments throughout Pakistan, hereinafter referred 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

WHERAS 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 35 of the Industrial Relations Act, 2012 to the Company vide its letter No. 786/SEU-143/CD/2012/2014 dated 2nd July, 2012.

WHEREAS the Company submitted a Charter of Demands under Section 35 of Industrial Relations Act, 2012.

WHEREAS exhaustive discussions and negotiations have taken place on the Charter of Demands and other requests and proposal 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, 2012 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. 22,000/- per month as on 1st July, 2012, Rs. 4,500/-

b) Workers drawing a basic salary/wage of more than Rs. 25,001/- per month as on 1st July, 2012, Rs. 5,000/-.

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 form part of this Agreement representing all Unionized Staff of the Company throughout Pakistan.

3. House Rent Allowance

Effective 1st July, 2012 the House Rent Allowance payable to the workers listed in Annexure-A will be revised from 58% of the basic salary to 61% of the basic salary per month.

4. Conveyance Assistance Allowance

Effective 1st July, 2012 the Conveyance Assistance Allowance payable to the workers listed in Annexure-A will be revised from 43% of the basic salary PLUS Rs. 1,700/- to 46% of the basic salary PLUS Rs. 2,000/- per month.

5. Merit Increase

The Company shall provide a merit increase system in order to encourage and motivate the performance of workers. The scale of annual increment will be as follows, which will be applicable w.e.f. 01.01.2013.

a) High Performance: 10% of Basic Salary

(up to 15% of workers population)

b) Very good performance: 9% of Basic Salary

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

c) Good Performance:8% of Basic Salary

(up to 50% of workers population)

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

6. Leave Fare Assistance (LFA)

Effective 1st July, 2012 the quantum of LFA for workers in Annexure-A will be revised from Rs. 14,500/- to Rs. 17,000/- per annum, which will be payable to all eligible workers along with their salary in the month January, 2012 at the old rate for the year 2012 will be paid the difference of the aforesaid increase i.e. one-time proportionate sum as arrears amounting to Rs. 1,250/- for six months (July – December, 2012). Whereas, those workers who have received LFA in the month of January, 2013 & 2014 at the old rate, will be paid one-time difference i.e. 2,500/- each for the years 2013 & 2014 respectively.

7. Festival Allowance

a. Allowance 1: Eid-ul-Fitr

Effective 1st July, 2012 all Muslim workers shall be paid an amount of Rs. 6,000/- (Rs. Six thousand only) as Festival Allowance I, which will be paid during the first week of Ramzan. Similarly, the Non-Muslim staff shall be paid the amount at least one week before their important festival i.e. Christmas. The aforesaid amount shall not be treated as part of wages for any purpose. Those workers who have already received festival allowance in 2012 & 2013 at the old rate will be paid the difference of the aforesaid increase i.e. Rs. 1,500/- each along with the arrears arising out of this settlement.

b. Allowance 2: Eid-ul-Azha

Effective 1st July, 2012 all Muslim workers shall be paid an amount of Rs. 4,000/- (Rs. Four thousand only) as Festival Allowance II, which will be paid at least two weeks before Eid-ul-Azha. Similarly, the Non-Muslim staff shall be paid the amount at least one week before their important festival i.e. Christmas. The aforesaid amount shall not be treated as part of wages for any purpose. Those workers who have already received festival allowance in 2012 & 2013 at the old rate will be paid the difference of the aforesaid increase i.e. Rs 1,500/- each along with the arrears arising out of this settlement.

8. Bonus

a) Effective 1st July, 2012 the Company shall pay Bonus on annual basis to the workers as listed in Annexure-A which will be equal to 40% 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 aid during the month of January after the closing of accounts of the Company on 31st December 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 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) The company on making profits during its financial year (January – December) shall pay bonus in accordance with the provisions of Standing Order 10-C of the Industrial & Commercial Employment (Standing Orders) Ordinance, 1968.

9. Gratuity / Pension

Subject to the approval from the respective Government Authorities:

1. Effective 1st July, 2012 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 @ 64 days basic salary for each year of service according to Shell Pakistan Labour & Clerical Staff Fund Rules.

2. Workers/members ineligible for Pension from Burmah – Shell Pakistan Pension Fund (Applicable to Clerical & Labour Staff) will be allowed Gratuity @ 64 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 year 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 Gratuity Fund, through the Supplementary Trust Deeds, in order to reflect the abovementioned provisions.

10. 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 actuals or Rs. 2,000/- per day, whichever is less, up to 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 worker 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 or Rs. 40,000/- for each operation.

ii) Surgical operation shall be defined as follows:

a) Surgeon’s fee

b) Operation theater charges including Anesthesia

c) Medicines

d) Blood charges, if any

e) X-Ray charges

f) Laboratory charges

g) Room charges at actual or Rs. 2,000/- per day, whichever is less, up to a maximum of 30 days.

iii) Family mean 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 by this 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.

C. Hospitalization other than Surgical Operation:

The Company shall provide financial assistance to the workers and their families in case of hospitalization other than surgical operation as follows:

i) The hospitalization charges except in respect of any diet shall be reimbursed at actual subject to a maximum of Rs. 40,000/- in case of worker himself and Rs. 35,000/- in case of his family.

ii) Hospitalization charges shall be defined as follows:

a) Dr.’s fee

b) Medicine

c) X-ray charges

d) Laboratory charges

e) Room charges at actual or Rs. 2,000/- per day whichever is less up to a maximum of 30 days.

iii) Family has the same meaning as defined in clause 10(B) (iii) above.

iv) The following conditions shall apply in each case of hospitalization other than surgical operation:

a) The Company’s Doctor shall be consulted by the worker or as the case may be, by his family before hospitalization. The choice of the hospital rest with the Company’s Doctor.

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

D. In case the amount of Surgical/Hospitalization charges exceeds the prescribed limit as mentioned above, the worker shall submit his total claim to the Chief Medical Officer of the Company who in consultation with Industrial Relations Department will review/ consider such claim and send his recommendation to General Manager Human Resource for necessary action. The Company will continue to cooperate in genuine medical cases. The decision of the General Manager Human Resources shall be final and will not be called into question.

E. Those workers who wish to take advance in connection with surgical operation/ hospitalization, they may apply along with relevant Doctor/Hospital advice / estimates to the Industrial Relations Department, so that their case in considered in consultation with the Company’s Chief Medical Officer, for allowing them reasonable advance from the General Purposes Loan as agreed under Clause 13(b) of this Agreement. Such advance shall be adjusted against the final medical claim. In case the worker fails to submit final medical claim within a reasonable period, the advance amount will be recoverable from the salary/dues payable to the concerned worker.

11. Overtime

In supersession of the previous rule on overtime and at the request of the Union, the impact on overtime on account of increase 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, 2012 will be revised w.e.f. 1st July, 2012 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.

12. 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. 700/- (Rs. Seven hundred only) to mark the occasion of signing this Agreement.

13. General Purpose Loan

a) The Company’s allocation to General Purpose Loan shall revised from Rs. Eighteen Lacs to Rs. Twenty Lacs for advancing loans for general purpose to the workers.

b) The loan amount to a worker shall not exceed his 8 month’s basic salary or Rs. 150,000/- (Rs. One lac fifty thousand only) whichever is less and shall be recoverable in 40 equal installments. 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.

f) In addition to the above amount, the Company will allocate an amount of Rs. One Lac in the General Purpose Loan Fund for allowing reasonable advance in connection with Operation/Hospitalization charges as per Clause 10 (E) of this Agreement. The advance amount recovered/adjusted from the workers final medical claim shall be available for allowing similar advance to other workers for the same purpose.

14. Motor Cycle Loan

a) The company’s total allocation to motor cycle loan fund shall be revised from Rs. 8 Lacs to Rs. 10 Lacs for advancing loan to workers, whose period of service in the Company is not less than 10 years for the sole purpose of purchasing motor cycle.

b) The loan amount shall not exceed Rs. 80,000/- (Rs. Eighty thousand only) in each case and shall be recoverable through payroll deduction in 50 equal monthly instalments. The loan amount recovered from workers will be available for advancing loans to other workers for the same purpose.

c) The above loan shall be given to the eligible workers only twice in their service period with the Company.

d) Other details and procedures in this regard will be 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. 30/- to Rs. 50/-

Tea from Rs. 8/- to Rs. 12/- per cup

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

16. Washing Allowance

Effective 1st July, 2012 the rule of washing allowance applicable to up-country workers (except located at Karachi) will be revised from Rs. 150/- to Rs. 200/- per month. Other rules/stipulations will remain unchanged.

17. Special Facilities Payment

Effective 1st July, 2012 the special facilities payment applicable to certain workers at Keamari Installation will be increased by Rs. 50/- per month. Other rules/stipulations.

18. Shoes Facility

Effective 1st July, 2012 the quantum of payment in lieu of shoes facility for certain workers Annexure ‘A’ will be revised from Rs. 3,500/- per annum to Rs. 4,000/- per annum which will be payable to workers along with their salary in the month of January each year. However, those workers who have already received shoe facility payment in the month of January 2012, at the old rate will be paid the difference of the aforesaid increase i.e. one-time proportionate sum as arrears amounting to Rs. 250/- for six months (July – December, 2012). Whereas, those workers who have received shoes facility payment in the month of January 2013 and 2014 at the old rate will be paid one-time difference of Rs. 1,000/- for year 2013 and 2014. Other rules/stipulations regarding shoes facility will remain unchanged.

19. 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 /wages increases 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.

20. Long Service Award

In order to facilitate the workers arriving from up-country stations to receive their Long Service Awards, it has been agreed that a sum of Rs. 50,000/- per annum will be earmarked for this purpose, which will be distributed equally among such workers, after receiving their awards.

The aforesaid amount includes all travelling, accommodation and daily expenses. It will be the worker’s responsibility to make his own travelling/accommodation and other arrangements. Except for the aforesaid amount no TA/DA, Taxi/Rickshaw fare etc. will be paid.

21.

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, stoppages or work, go slow, illegal strike or refusal to work overtime by workers of any section of any establishment of the Company.

22.

The Union undertakes that all its member 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, No Smoking Policies.

• Statement of General Business Principles.

• Security & Safety Policy

• Drug & Alcohol Policy

• Code & Conduct

• Life Saving Rules

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

23.

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

24.

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

25.

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.

26.

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

27.

This Agreement shall apply and its benefits be applicable to the permanent workers mentioned in Annexure ‘A’ who are on the pay roll of the Company, on the date 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 establishment.

28.

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 pay roll of the Company on 1st July, 2012 and have since ceased to be in the employment of the Company.

29.

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 pay 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’.

30.

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

31.

Any dispute of 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 discussion between the Company and the Union result in disagreement on the issue in question.

32.

This Agreement shall remain in force and in effect till 30th June, 2015 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 the relevant provisions of law.

33.

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 C.B.A or by any worker covered under this Agreement.

34.

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 provision of this Agreement shall prevail.

35.

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 - 2015

Start date: → 2015-06-30
End date: → Not specified
Ratified by: → Other
Ratified on: → 2014-05-27
Name industry: → Extraction, mining, quarrying
Name industry: → Extraction of crude petroleum, Extraction of natural gas, Support activities for petroleum and natural gas extraction
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 375.0
Wage increase starts: → 2012-07

Once only extra payment

Once only extra payment: → PKR 6000.0 %
Once only extra payment due to company performance: → No

Extra payment for annual leave

Extra payment for annual leave: → PKR 17000.0

Premium for overtime work

Allowance for commuting work

Allowance for commuting work: → 46 % of basic wage

Allowance for seniority

Allowance for seniority: → PKR 50000.0 per month
Allowance for seniority after: → 1 years of service

Meal vouchers

Meal allowances provided: → Yes
→ 50.0 per meal
Free legal assistance: → No
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