COLLECTIVE BARGAINING AGREEMENT BETWEEN PAKISTAN REFINERY LIMITED AND PAKISTAN REFINERY EMPLOYEES UNION - 2013

FORM “X” (RULE-70)

PARTIES TO THE AGREEMENT

1. PAKISTAN REFINERY LIMITED

2. PAKISTAN REFINERY EMPLOYEES UNION

EMPLOYER

1. Mr. Aftab Husain - Managing Director & CEO

2. Mr. Najam Mahmud - General Manager HR

3. Mr. M. Naman Shah - General Manager T&I

4. Mr. Muhammad Azhar - General Manager Operations

5. Mr. Mohammad Khalid - Sr. Manager Maintenance

6. Mr. Muhammad Akhtar Ali - Manager Industrial Relations

COLLECTIVE BARGAINING AGENT

1. Mr. Mohammad Yousuf - President

2. Mr. Yousuf Ali - General Secretary

3. Mr. S. Asif Shah - Joint Secretary

4. Mr. M. Tahir Shah - Finance Secretary

5. Mr. Fazeel Ahmed - Propaganda Secretary

6. Mr. Muhammad Nasir - Member Managing Committee

THIS AGREEMENT is made this 17th day of October, 2014 between Pakistan Refinery Limited (a Company incorporated in Pakistan under the Companies Ordinance, 1984) having its Registered Office at Korangi Creek Road, P.O. Box 4612, Karachi – 74900, hereinafter referred to as the “COMPANY” (which expression wherever the context so admits shall include and mean their successors and assigns) of the ONE PART;

AND

The Pakistan Refinery Employees’ Union, a duly registered and certified body under the relevant laws as the “Collective Bargaining Agent” for Workmen employed or to be employed by the COMPANY at Karachi whether at Korangi Refinery or Keamari Terminal or any other location EXCLUDING Temporary, Probationary, apprentices, Badli (Substitute) and any other category of Workmen, hereinafter called the “UNION” which expression shall include and mean its successor and assigns of the UNION and all present and future Permanent Workmen employed by the COMPANY.

SHORT RECITAL OF THE CASE

WHEREAS the UNION submitted a Charter of Demands to the COMPANY on 1st July, 2013 under cover of its letter No. PREU/2013 dated July 1, 2013;

AND WHEREAS the COMPANY under cover of its letter dated 1st July, 2013 also submitted a Charter of Demands to the UNION for streamlining certain practices, issues and facilities;

AND WHEREAS pursuant to the said Charters of Demands (Annexures ‘A’ & ‘B’), an industrial dispute having arisen, the COMPANY and the UNION entered into bilateral negotiations and discussions and several meetings were held thereafter upto the signing of this settlement;

AND WHEREAS in the process of negotiations and collective bargaining, the COMPANY and the UNION have arrived at an Agreement contained hereinafter representing full and final settlement of all the demands directly or indirectly specified in the Charters of Demands, or proposals, issues and requests otherwise raised from time to time during the course of negotiations between the COMPANY and the UNION verbally or in writing leading upto the signing of this Agreement.

INTENT AND PURPOSE OF AGREEMENT

It is the intent and purpose of this Agreement to ensure industrial peace and to further strengthen the existing harmonious relationship between the parties hereto; to clarify the rights and the responsibilities of the COMPANY, the UNION and the Workmen; to provide orderly and peaceful means of conducting negotiations and resolving any misunderstandings or grievances; to compensate for rising cost of living; to set forth herein the basic and complete Agreement between the parties covering rates of pay, wages and other conditions of employment and to ensure continued efficiency, maximum productivity and economy in order to promote and improve the industrial and economic relationship of the COMPANY and its Workmen.

SCOPE OF AGREEMENT

It is agreed and understood that this Agreement is conferred to and covers only those Permanent Workmen employed by the COMPANY against permanent positions whose pay rates are given in Annexures ‘C’ & ‘D’ (which are attached hereto and which form part of this Agreement) and whose names appear on COMPANY’s Payroll as on the date of signing of this Agreement. However, the benefits under this Agreement will also be available to those workmen on proportionate basis who left the Company’s service from 1st July, 2013 to the date of signing of this Agreement.

RECOGNITION OF THE COMPANY’S AND UNION’S RIGHTS AND RESPONSIBILITIES

The COMPANY retains all rights and responsibilities of Management in its absolute form resulting from ownership of the COMPANY and pertaining to the operation of the business.

The rights and responsibilities shall mean and include but not be limited to:

a) The right to direct and control the workforce, i.e., among others, the right to hire, promote, demote, transfer, discipline, discharge, to create or discontinue jobs, to determine the number of employees needed, employee qualifications, standards of performance, job requirements and job contents;

b) To establish rules and regulations for plant, office and other work-sites;

c) To make optimum utilization of its workforce, tools, equipment and other resources;

d) To maintain discipline and production efficiency, safety and security of the plant, workshops, offices and COMPANY property;

e) To determine the means, methods, processes, materials, procedures and schedules of job performance and production;

f) To determine complement of workmen in each rotational shift ace in each particular work unit and office.

The Company’s exercise of its right to manage shall not violate any of the expressed provisions of his Agreement or applicable laws.

It is recognized that the function of the UNION is to serve within its sphere as the Collective Bargaining Agent on matters relative to wages, hours of work and conditions of employment as specifically expressed in this Agreement exclusively for confirmed workmen of the COMPANY in the categories and positions defined in Annexures ‘C’ & ‘D’ of this Agreement.

UNION and the Workmen recognize their responsibility to ensure:-

i) a good day’s work from each of the workmen who are on duty at any site of the COMPANY;

ii) that the workmen do not abandon, quit plant or any work unit whilst on duty without permission of the immediate Supervisor;

iii) that the workmen deployed at the plant and other work units do not fail to perform all the various facets of their assigned job including data recording, preparation and submission of reports and returns etc.;

iv) that all workmen cooperate with the COMPANY and support its efforts to

eliminate unnecessary excessive overtime, unauthorized absence and

safeguarding of the COMPANY’s property against wastage and pilferage.

This recognition of UNION rights and responsibilities should in no way be interpreted as lessening of the COMPANY’s responsibilities to its individual workmen. For this reason and also because of the road responsibilities of the COMPANY to the Government of Pakistan, to its owners/shareholders, and to its workmen, the relationship between the COMPANY and the UNION must be governed by the principle that the COMPANY must maintain the right to initiate action. On the other hand, the UNION must maintain the right to protest and appeal against the actions of the COMPANY whenever they believe the COMPANY’s actions were contrary to the Agreement/Law.

INDUSTRIAL PEACE

It is agreed that during the tenure of this Agreement, neither the UNION nor any of the Workmen will collectively, concertedly, severally or individually engage in or participate, directly or indirectly, in any strike, go-slow, work stoppage, abandonment of employment or any other interference of production or work for any cause arising out of the terms and conditions herein mentioned or any other cause of any nature, whatsoever. Similarly, the COMPANY agrees that during the tenure of this Agreement, it will not declare lockout of any of the workmen covered by this Agreement. The COMPANY retains the right to discipline or discharge any employee who violates this provision.

The UNION undertakes to fully support the COMPANY’s efforts to boost production and efficiency and to fully cooperate with the COMPANY in maintaining strict discipline. The UNION also undertakes not to make any demand involving direct or indirect financial implications to the COMPANY, whatsoever during the operative period of this Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSETH AS FOLLOWS:-

TERMS OF AGREEMENT

1. WAGES / PAY SCALES

This increase shall be adjusted and/or set off against any increase in wages or allowances and/or new allowance, which may, hereafter become payable by the Company to its Workmen under any statute and /or Order of the Government due to a rise in cost of living or otherwise.

1.2 SCALES

It is agreed to revise Pay Scales as per Annexure ‘C’ and ‘D’ of the settlement which inclusive 20% increase in each starting scales and Rs 300/- in each grade increment. The revised pay Scales will be effective from 1st January 2015.

1.3 ANNUAL INCREMENTS

All permanent workers completing one year of continuous service with the Company will receive an annual increment as provided in the revised Pay Scales (Annexure ‘C’ & ‘D’). More than 3 months service period will be required for award of annual increment on 1st January each year. A worker having less than 3 months service with the company will NOT be eligible for annual increment on 1st January.

The Company further agrees to grant single increment to all permanent workers effective January 1, 2014 as follows irrespective of salary grades:

• Workers drawing basic salary below Rs 20500/-Rs 250/-p.m.

• Workers drawing basic salary Rs 20,500/- and above Rs 386/-p.m.

Those permanent workers who have been awarded double increment on January 1, 2014 will be entitled to receive above increase accordingly.

2. REFINERY ALLOWANCE

3. LEAVE FARE ASSISTANCE

4. UNIFORM ALLOWANCE (DRIVERS & DISPENSERS)

5. LONG SERVICE AWARDS

6. SCHOLARSHIPS

7. PENSION

8. MEDICAL AFTER RETIREMENT

The Company agrees to revise the limit of OPD expenses from Rs. 10,000/- to Rs. 18,000/- per annum per eligible person effective January 1, 2015.

All other existing entitlements, terms and conditions concerning this benefit / payment shall remain unchanged.

9. TAXATION

It is agreed by the UNION that all benefits/ facilities and allowances etc., that are available to the workmen shall be subject to tax in accordance with the tax rules of Pakistan.

10. SERVICE RULES

The “Service Rules” have been updated and attached as Annexure ‘E’ to this Agreement. These Rules will form part and parcel of the Agreement and constitute one of the terms and conditions of employment/contract of employment of the workmen.

11. SEPARATION

Any workman who may have separated from the Company during this period i.e., from 1st July, 2013 to the date of signing of this Agreement, shall be entitled to the benefits accruing from this Agreement on proportionate basis.

12. BENEFITS UNDER THIS AGREEMENT

All benefits under this Agreement shall accrue from the date of signing of this Agreement unless otherwise specified against the individual item.

It is further agreed that the benefits covered under this Settlement are with the object of setting off the increasing/rising Cost of Living and therefore, any benefit or any allowance which may be introduced, during the period of this Settlement, through legislation or otherwise by any Government announcement will not be in addition to the benefit(s) admissible under this Settlement. Should any benefit(s) introduced by Government, as aforesaid, be more than admissible under this Settlement, the difference between the benefit(s) introduced by the Government and those admissible under this Settlement will be paid to make up the difference only and not the whole introduced by the Government.

13. INTERPRETATION OF AGREEMENT

A dispute of difference arising out of the construction or interpretation of any clause of this Settlement may be referred to a Court 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.

14. SAVING CLAUSE

All existing terms and conditions will continue to remain in force except where modified, altered/changed and introduced under this Agreement.

15. EFFECTUVE DATE OF BENEFITS UNDER THIS AGREEMENT

It is agreed by both the parties that all benefits under this Agreement will, unless otherwise noted against individual item, accrue from 1st July, 2013 but in case of workmen who joined on a date subsequent to 1st July, 2013, the benefit(s) in question shall be allowed from his date of joining the COMPANY.

16. DURATION OF AGREEMENT

16.1 It is agreed between the parties that this Agreement will remain in force for a period of 2 years commencing from 1st July, 2013 and ending on 30th June, 2015 and thereafter, to remain binding on both the parties until such a date as the new Agreement is signed between them.

16.2 The UNION and the COMPANY expressly agree and undertake not to reopen this Agreement during the period this Settlement is effective or raise any matter, demands or issue of financial nature or implications, whether or not covered by the provisions of this Agreement.

WITNESS WHEREOF THE PARTIES HERETO HAVE HEREUNDER TO

SET THEIR HANDS ON THIS 17TH DAY OF OCTOBER,2014

SIGNATURE OF PARTIES