NATIONAL BARGAINING COUNCIL FOR THE CLOTHING MANUFACTURING INDUSTRY
AMENDING PROVIDENT FUND COLLECTIVE AGREEMENT FOR THE KWAZULU-NATAL REGION
G/N R. 399 - G/G 24603 OF 28 MARCH 2003
GOVERNMENT NOTICE
DEPARTMENT OF LABOUR
No. R. 399 28 March 2003
[GovNR399y2003]
LABOUR RELATIONS ACT, 1995
[a66y1995]
NATIONAL BARGAINING COUNCIL FOR THE CLOTHING MANUFACTURING INDUSTRY: EXTENSION OF PROVIDENT FUND COLLECTIVE RE-ENACTING AND AMENDING AGREEMENT FOR THE KWAZULU-NATAL-REGION TO NON-PARTIES
I, Membathisi Mphumzi Shepherd Mdladlana, Minister of Labour, hereby, in terms of section 32 (2) of the Labour Relations Act, 1995, declare that the Collective Agreement which appears in the Schedule hereto, which was concluded in the National Bargaining Council for the Clothing Manufacturing Industry and is binding in terms of section 31 of the Labour Relations Act, 1995, on the parties which concluded the Agreement, shall be binding on the other employers and employees in that Industry, with effect from 31 March 2003, and for the period ending 30 June 2005.
M. M. S. MDLADLANA
Minister of Labour
SCHEDULE
NATIONAL BARGAINING COUNCIL FOR THE CLOTHING MANUFACTURING INDUSTRY: PROVIDENT FUND COLLECTIVE AMENDING AGREEMENT FOR THE KWAZULU-NATAL REGION
in accordance with the provisions of the Labour Relations Act, 1995, made and entered into by and between the
Natal Clothing Manufacturers' Association
(hereinafter, referred to as the "employers" or the "employers' organisation"), of the one part, and the
Southern African Clothing and Textile Workers' Union
(hereinafter, referred to as the "employees" or the "trade union"), of the other part, being the parties to the National Bargaining Council for the Clothing Manufacturing Industry.
(1) The terms of this Agreement shall be observed in the Clothing Industry (Natal)-
(a) by all employers who are members of the employers' organisation and by all employees who are members of the trade union and who are engaged and employed in the Industry, respectively; and
(b) in the Magisterial Districts of Chatsworth, Durban, Inanda, Pinetown, Pietermaritzburg and Lower Tugela.
(2) Notwithstanding the provisions of subclause (1), the terms of this Agreement shall-
(a) apply in respect of employees for whom wages are prescribed in the Main Agreement; and
(b) not apply in respect of employees whose basic wages exceed two and half times the wage rate for a qualified Grade 1 employee or whose occupation is monthly paid and of a managerial, specialist technical or non-production related nature.
(3) (a) The purpose of this Agreement is to make provision for retirement, disability, death and retrenchment benefits.
(b) Employers employing five employees or fewer shall, upon application to the Council in terms of clause 15 of the Agreement published under Government Notice No. R. 1516 of 27 November 1998 be exempted from this Agreement.
(c) Where an employer or an employee can satisfy the Council that any of the provisions of this Agreement are restricting entrepreneurial initiative and/or employment opportunities such employer or employee may apply to the Council for exemption from those specific provisions in terms of clause 15 of the Agreement, published under Government Notice No. R. 1516 of 27 November 1998.
(d) Clauses 1 (1) (a), 2 and 3 of this Agreement shall not apply to employers and employees who are not members of the employers' organisation and trade union, respectively.
This Agreement shall come into operation on a date to be fixed by the Minister of Labour in terms of section 32 (2) of the Act, and shall remain in force for the period ending 30 June 2005.
The provisions of clause 2 of the Agreement published under Government Notice No. R. 1516 of 27 November 1998 as amended by Government Notice No. R. 1281 of 29 October 1999 (hereinafter referred to as the "Former Agreement"), as further amended and re-enacted from time to time, shall apply to employers and employees.
The provisions contained in clauses 3 to 19 of the Former Agreement (as further amended and re-enacted from time to time), shall apply to employers and employees.
5. CLAUSE 3 OF THE FORMER AGREEMENT: DEFINITIONS
(1) Delete the definition of "`annual rate of return' and `rate of return'".
(2) Insert the following new definitions:
"'basic weekly wage' means the remuneration usually payable in money to an employee in respect of the ordinary hours of work set out in clause 9 (1) of the Main Collective Agreement for the KwaZulu-Natal Region of the Council, regardless of the hours actually worked by an employee;
'child' shall mean a child as defined in the group funeral policy;"
(3) Delete the definition of "disability income benefit".
(4) Substitute the following for the definition of "employer's account":
"'employer's account' means an account established in respect of each member, in which is accumulated-
(a) the employer's share of contributions referred to in clause 6 (12); and
(b) the transferred employer's account;
which amounts shall be taken into account in determining the member's benefits in terms of these rules;".
(5) Insert the following new definitions:
"'group disability benefit' shall mean a disability benefit to which a member may become entitled under a policy of insurance entered into by the Fund for the purpose of providing such benefits;
'group disability policy' means a policy of insurance entered into by the Fund in terms of clause 5 (5) (f) for the purpose of providing a disability benefit to members in terms of clause 8 (1) (e) of this Agreement;
'group funeral benefit' shall mean a death benefit to which a member or the spouse or child of such member may become entitled under a policy of insurance entered into by the Fund for the purpose of providing such benefit;
'group funeral policy' means a policy of insurance entered into by the Fund in terms of clause 5 (5) (f) for the purpose of providing a funeral benefit for members or the spouse or child of such member in terms of clause 8 (1) (c) of this Agreement;".
(6) Delete the definition of "group income protection policy".
(7) Substitute the following for the definition of "interim rate":
"'interim rate' means the rate of return calculated in accordance with clause 10 (3) to be applied in determining benefits in terms of clause 9 for any part of a year;"
(8) Substitute the following for the definition of "member's account":
"'member's account' means an account established in respect of each member, in which is accumulated-
(a) the member's share of contributions in terms of clause 6 (12); and
(b) the transferred member's account;
which amounts shall be taken into account in determining the member's benefits in terms of this Agreement;".
(9) Insert the following new definitions:
"'returns' means-
(a) any income (received and accrued) less an allowance for any tax and, if applicable, part or all of any expenses (paid and accrued); and
(b) any capital appreciation or depreciation (realised and unrealised);
'spouse' shall mean a spouse as defined in the group funeral policy.".
6. CLAUSE 4 OF THE FORMER AGREEMENT: PROVIDENT FUND
Substitute the following for the second paragraph:
"The Fund shall consist of-
(a) contributions paid into the Fund in accordance with the provisions of this Agreement;
(b) money transferred into the Fund from another Fund in respect of a member; and
(c) any other sums to which the Fund may become entitled;
increased or decreased by the rate of return declared in accordance with clause 10.".
7. CLAUSE 5 OF THE FORMER AGREEMENT ESTABLISHMENT AND FUNCTIONS OF MANAGEMENT COMMITTEE
(1) Substitute the following for subclause (1):
"(1) The administration of the Fund shall be vested in the Management Committee, consisting of 3 (three) employers' representatives and 3 (three) employees' representatives appointed by the National Bargaining Council for the Clothing Manufacturing Industry for its KwaZulu-Natal Chamber at a duly constituted meeting of the Council, together with the Chairperson and Vice-Chairperson of the KwaZulu- Natal Chamber, who shall be ex officio members of the Management Committee.".
(2) Substitute the following for the first sentence in subclause (3):
"2 (two) employers' representatives and 2 (two) employees' representatives shall constitute a quorum.".
8. CLAUSE 6 OF THE FORMER AGREEMENT: CONTRIBUTIONS
(1) Substitute the following for subclause (1):
"(1) For the purpose of the Fund, each employer shall deduct from the wages of each of his employees, who have worked during any week or part thereof, 6% (six per cent) of an employee's basic weekly wage, as defined in this Agreement: Provided that no deduction shall be made from the wages of any contributor after retirement age, unless he has elected to defer his retirement;".
(2) Substitute the following for subclause (2):
"(2) In addition to the amount so deducted, the employer shall contribute to the Fund-
(a) 5% (five per cent) of an employee's basic weekly wage, as defined in this Agreement, provided that the employee worked during the week or any part thereof, which contribution shall be applied in accordance with subclause (12); and
(b) 2% (two per cent) of an employee's basic weekly wage, as defined in this Agreement, irrespective of whether or not the employee actually worked during the week and irrespective of whether or not the employee is on maternity leave, sick leave or short time, which contribution shall be allocated to the Risk Reserve Account in terms of clause 7 (1) (B) (a) (i) (aa) and applied in accordance with clause 7 (1) (B) (a) (iii):
Provided that a complying employer shall automatically be exempt from the provisions of subclause (2) (a) above, as provided in clause 15 (9), for the period from 1 July 2001 and until such time as is otherwise agreed by the parties to the Council. The Fund shall immediately refund to a complying employer any contributions made in terms of subclause (2) (a) above in respect of the period from 1 July 2001.".
(3) Delete subclause (11) and renumber subclause "(12)" to read "(11)".
(4) Substitute the following for subclause (12):
"(12)The contributions made by and in respect of each member in terms of subclauses (1) and (2) (a) shall be applied in the ratio of their contributions to the member's account and the employer's account.".
9. CLAUSE 7 OF THE FORMER AGREEMENT FINANCE
(1) Substitute the following for subclause (1):
"(1) (A) Bank Account
All monies received by the Fund shall be deposited in a banking account opened in the name of the Fund. Withdrawals from the Fund shall be by signed cheque or electronic transfer by such persons as may, from time to time, be authorised by the Management Committee.
(B) Reserve Account
(a) Risk Reserve Account
(i) A Risk Reserve Account shall be maintained under the Fund, to which shall be credited-
(aa) the amount required to be credited in terms of clause 6 (2) (b);
(bb) any payment made to the Fund by an underwriter; and
(cc) a portion of the amount (if applicable) required to be credited in terms of clause 10 (5).
(ii) The amount standing to the credit of the Risk Reserve Account shall be increased or decreased by such proportionate share of the returns earned by the Fund as the amount in the Risk Reserve Account bears to the sum of all amounts standing to the credit of the Fund;
(iii) The amount standing to the credit of the Risk Reserve Account shall be used-
(aa) to meet the cost of the premiums in respect of the Group Life Assurance Policy, the Group Disability Policy and the Group Funeral Policy; and
(bb) to pay benefits to members or, if applicable; their beneficiaries in the event of their death or disablement in terms of this Agreement;
(b) Investment Reserve Account
(i) An Investment Reserve Account shall be maintained under the Fund, to which shall be credited-
(aa) a portion of the amount (if applicable) required to be credited in terms of clause 10 (5); and
(bb) that part (if any) of the employer's account in respect of a member to which a member is not entitled on leaving service; and
(cc) a portion of the amount standing to the credit of the Fund excluding the withdrawal benefits of members and unclaimed withdrawal benefits of inactive members of the Fund, which amount shall be agreed by the Management Committee.
(ii) The amount standing to the credit of the Investment Reserve Account shall be increased or decreased by such proportionate share of the return earned by the Fund as the amount in the Investment Reserve Account bears to the sum of all amounts standing to the credit of the Fund.
(iii) The amount standing to the credit of the Investment Reserve Account shall be used-
(aa) at the discretion of the Management Committee, to increase benefits payable by the Fund;
(bb) with specific reference to the amount mentioned in subclause (b) (i) (aa) above, to stabilise the returns of the Fund;
(cc) to meet all or part of the expenses of the Fund for the month concerned;
(dd) to meet all or part of the contributions due by an employer in terms of clause 6 (2) (a) for the period ending 30 June 2002, with specific reference to the amount mentioned in subclause (1) (B) (b) (i) (cc) above.
10. CLAUSE 8 OF THE FORMER AGREEMENT PAYMENT OF BENEFITS
(1) Substitute the following for subclause (1) (c):
"(c) die in service, or whose spouse, child or children dies while such member is in service;".
(2) Substitute the following for subclause (1) (e):
"(d) become disables, are unable to work and become entitled to a benefit under the Group Disability Policy effected by the Fund on behalf of its members;".
(3) Delete subclause (1) (d) and renumber subclauses (1) (e) and (f) to (1) (d) and (e), respectively.
(4) Delete subclause (10) and renumber subclauses (11) to (19) to (10) to (18), respectively.
11. CLAUSE 9 OF THE FORMER AGREEMENT AMOUNT OF BENEFIT
(1) Substitute the following for subclause (1):
"(1) Withdrawal benefits:
Upon a member becoming entitled to a withdrawal benefit, he shall be entitled to-
(a) a refund of his member's account; and
(b) a refund, for each completed year of service [subject to a maximum of 10 (ten) years of service], of 10% (10 per cent) of his employer's account; and
(c) 50% (fifty per cent) of the annual rate of return and the interim rate, as applicable, declared in clause 10:
Provided that a member who withdraws in terms of this subclause (1), may elect in writing to the Management Committee prior to the date of his withdrawal that, instead of receiving the above benefit as a lump sum, he receive the following benefit to be transferred in respect of him to another provident fund or a pension fund operated by his employer:
(i) A refund of his member's account; and
(ii) a refund of his employer's account; and
(iii) the full annual rate of return and the interim rate, as applicable, declared in terms of clause 10.".
(2) Substitute the following for subclauses (2) (b) and (2) (c):
"(b) a refund of his employer's account; and
(c) the full annual rate of return and the interim rate, as applicable, declared in terms of clause 10.".
(3) Substitute the following for subclause (3) (a) (iii):
"(iii) #9; the full annual rate of return and the interim rate, as applicable, declared in terms of clause 10.".
(4) Substitute the following for subclause (3) (b):
"(b) if the member remains in employment and does not claim his retirement benefit within 3 (three) months of the date he reaches retirement age, the provisions of subclause (5) shall apply to him."
(5) Renumber existing subclause "(4)" to subclause "(4) (1)".
(6) Insert the following new subclause (4) (ii):
"(ii) Notwithstanding the provisions of subclause (4) (1) above, a member who is subject to ill-health may, at any time before the normal retirement age, apply to the Management Committee to be placed on early retirement, without having to obtain the consent of his employer. Such application shall be considered by the Management Committee, which shall call for and obtain such medical evidence as it may require in order to determine the state of the member's health. For the purposes of this clause, the Management Committee shall be the sole arbiter as to whether a member is subject to ill- health. If the Management Committee so decides, the member shall be entitled to an ill-health early retirement benefit, which shall be determined in the same manner as in subclause (3) above.".
(7) Substitute the following for subclause (6):
"(6) Disability benefit: Upon a claim admitted by the underwriter of the Group Disability Policy effected by the Fund; a contributor shall be retired from the Fund and, in addition to the benefit he receives in terms of subclause (3) (a) upon such retirement, the member shall also receive the full amount of the proceeds of any claim so admitted under the Group Disability Policy.".
(8) Renumber the existing subclause (8) and (9) to subclauses (9) and (10), respectively.
(9) Insert the following new subclause (8):
"(8) Funeral Benefit:
(a) In the event of the death of a member in service prior to his Normal Retirement Age, the full amount of the proceeds of any claim admitted by the underwriter under a Group Funeral Policy affected by the Fund shall become payable in addition to the benefit referred to in subclause (7) (a).
(b) In the event of the death of a spouse or child of a member in service prior to his Normal Retirement Age, the full amount of the proceeds of any claim admitted by the underwriter under a Group Funeral Policy effected by the Fund shall become payable to the member in accordance with the provisions of that policy.".
(10) Substitute subclause (9) for the following:
"(9) (a) For a period of up to three (3) months, contributions from a contributor shall, for the purposes of determining a member's benefits, be deemed to have been received by the Fund, provided that such contributions were deducted from his earnings, notwithstanding the fact that such contributor's employer may not have actually paid such amount of money to the Fund.
(b) No. contributor shall be prejudiced in respect of any period of employment of up to three months during which he should have contributed to the Fund, but in respect of which his employer failed to submit contributions.
(c) If an employer fails to contribute amounts due by him in terms of clause 6 (2) (b), for a period longer than 3 (three) months, the contributors then in the employment of that employer shall, in accordance with the policy of insurance issued by the underwriter, no longer be covered for the death and disability benefits referred to in subclauses (6), (7) and (8).
(d) The trade union shall be advised after one month's non-payment of contributions by an employer as contemplated in subclause (9) (c) above.
12. CLAUSE 10 OF THE FORMER AGREEMENT: DECLARATION OF THE ANNUAL RATE OF RETURN AND INTERIM RETURN
(1) Substitute the following for clause 10:
"10: DECLARATION OF THE ANNUAL RATE OF RETURN AND INTERIM RATE
(1) The Management Committee may each year after 31 December, following the tabling of the annual audited statements of account, increase or decrease the benefits stated herein by declaration of an annual rate of return.
(2) Each declaration of the annual rate of return shall be in respect of the period ended 31 December of the year to which it applies and, once made, will be applied to determine the member's benefits in terms of clause 9, for that year.
(3) At the same time as the declaration of the annual rate of return, the Management Committee shall declare an interim rate which shall be used to determine benefits payable in terms of clause 9 in respect of the period commencing on 1 January of the year following the last declared annual rate of return to the date upon which the member became entitled to the benefit.
(4) Should it be necessary, the Management Committee shall declare a new interim rate at any time during the year.
(5) If, after the declaration of the annual rate of return as contemplated in subclause (2) above, such rate of return exceeds the interim rate declared by the Management Committee in terms of subclauses (3) or (4) above for the preceding year, the difference may be allocated in such proportions as the Management Committee may determine, to the Risk Reserve Account and the Investment Reserve Account in terms of clause 7 (1) (2).".
13. CLAUSE 13 OF THE FORMER AGREEMENT DISSOLUTION OF THE FUND
(1) Substitute the following for subclause (1) (a):
"(1) (a) In the event of the expiry of this Agreement or any extension thereof and a subsequent Agreement for the continuation of the Fund not being negotiated within a period of 2 (two) years of the date of such expiry, or the Fund not being transferred by the Council within such period to any other fund constituted for the same purpose as that for which the original Fund was created, the Management Committee shall appoint an independent liquidator who shall liquidate the Fund as though the contributors had left the industry.".
(2) Substitute the following for subclause (1) (c):
"(1) (c) In the event of the Fund being liquidated as provided above, a list of the names of those members whose whereabouts cannot be traced shall be published by the liquidator in three newspapers circulating in the area of the jurisdiction of the KwaZulu-Natal Chamber of the National Bargaining Council for the Clothing Manufacturing Industry.".
(3) Substitute the following for the second paragraph of subclause (2):
"(2) In the event of there being no Council in existence, the Committee functioning in terms of this subclause, or the trustee or trustees, as the case may be, shall upon the expiry of this Agreement appoint a liquidator who shall liquidate the Fund in accordance with the manner set forth in subclause (3) below, and, if upon the expiry of this Agreement, the affairs of the Council have already been wound up and its assets distributed, the balance of the Fund shall be distributed by the liquidator to the parties in equal shares.".
14. CLAUSE 15 OF THE FORMER AGREEMENT: EXEMPTIONS
Insert the following new subclause (9):
"(9) A complying employer shall automatically be exempt from the provisions of clause 6 (2) (a) for the period from 1 July 2001 and until such time as is otherwise agreed by the parties to the Council.".
Notwithstanding any other provisions of this Agreement, and with the consent of the Management Committee, a member or group of members may transfer from the Fund to another provident fund or pension fund for which they are eligible for membership. In such case an amount determined in accordance with the proviso to clause 9 (1) shall be transferred to such other provident fund or pension fund to be applied thereunder in accordance with the rules of such a fund, and the member shall thereafter have no further claim on the Fund.".
Signed at Cape Town on behalf of the parties this 5th day of December 2002.
C. O. JEFTHA
Chairperson
M. W. SIDDONS
Vice-Chairperson
W. A. ROBERTS
Acting General Secretary