|
It is only recently that an official from the Private Organization
Employees Social Security Agency (POESSA) has said
that it is provided in the law that employees
entitled for provident fund may decide by majority
vote of the employees either to choose the pension
fund scheme or to continue with their existing
provident fund.
Reading the private organizations employees’ pension proclamation would
not, however, state this rule of majority decision
explicitly. As a consequence, thereof, it will be
very difficult to conclusively assert that the law
provides for majority decision rule for such a
choice.
It seems that officials' assertion is based on administrative
interpretation of the law. Practical problems
already begin to pop up during the application of
the law in some organizations, where employers and
union leaders manifested their disagreements on the
interpretation and application of the law.
The proclamation clearly provides that employees, who have pension
scheme or provident fund before the coming into
force of it, may either decide to continue to
benefit from the pension scheme or the provident
fund or agree to be covered by the proclamation. In
slightly different wording, in case of consent, the
pension or provident fund of the employees shall be
transferred to the pension fund. These provisions of
the law are open for various legal contentions that
need a close analysis for easy and uniform
application.
Who should decide? Shall employees decide collectively or individually?
On this issue, it will be prudent to primarily ask what does ‘decide’,
‘agree’, and ‘consent’ legally mean. In their
dictionary meanings these words have striking
similarities that allow their interchangeable
usages. For instance, the word ‘consent’ is defined
as ‘to agree to something or give your permission
for something.’ On the other hand, the word ‘agree’
is also defined to mean ‘to decide with somebody
else to do something or to have something’.
Noting that these words are given meanings in terms of one another, the
word ‘decide’ could be seen defined as ‘to choose
something from a number of possibilities.’ From
these meanings, it is obvious that only the word
‘agree’ requires two or more people to decide on
something while ‘consent’ and ‘decision’ can also be
made individually without the involvement of
somebody else. However, it is important to underline
the fact that ‘agreement’ does not necessarily imply
collective or organized body.
Unfortunately, the private organizations pension proclamation does not
define in what sense it is using these words, nor
does it give a clue as to why it is using these
words invariably. The law does not also provide
anything about the role of labour unions in this
respect or as to how a decision should be made by
employees collectively.
Since the law also applies to all employees, including non-unionized
and managerial employees, it is crystal clear from
the outset that the usage of the term “employees” in
the provisions does not necessarily refer
exclusively to organized employees. Accordingly, the
terms decide, agree, and consent in these provisions
do not necessarily imply organized decision.
The usage of ‘agree’ in the law might also refer to agreement of
individual employees with their respective employers
or with the statutory offer of the government,
emphasizing to individual decisions and consents,
not necessarily decisions in a collective way.
Though collective decision is not precluded from
being a possibility, interpreting these provisions
of the law as implying only ‘collective decision’
will, however, provoke a lot of legal issues that
need palatable answers.
Another legally important issue is whether the choice between existing
provident fund and new private pension fund has a
collective or individual impact. At the outset, it
would be useful to understand the fact that the
implementation of the law on an individual basis
does not have any collective impact on employees.
One positive side of the new law is that the
application of the new pension scheme does not
automatically preclude the simultaneous application
of a provident fund scheme. The transitory provision
of the proclamation provides that previous laws and
directives shall remain applicable to legal
situations created before the coming into force of
this Proclamation.
The legal rationale behind the provision is to maintain the validity of
agreements or any other legal situations made
previous to the new law. Had it not been for such a
transitory provision in the law, it would be
plausible to argue that the matter needs collective
decision so as to avoid any possible collective
impact of forfeiting an already existing right
obtained by virtue of an existing collective
agreement or some other legal situation.
However, by virtue of provision, applicable labour laws or income tax
laws shall still be applicable for such existing
legal situation that, in effect, avoid any
collective impact on all employees.
Accordingly, the application of the law, even if made individually,
will not have any collective impact. So, if
employees, either collectively or individually,
prefer to be covered by the new pension scheme and
if they already had a better provident fund scheme
within their existing collective agreement, then,
any excess contribution arising from there shall
still continue in their favour until the expiry date
of the agreement.
On the other hand, however, it will be wise to observe the fact that
any collective decision to continue or to be covered
by the new pension law might have an adverse
collective impact for minority employees.
For instance, what will happen if a decision to continue with existing
provident fund is made by majority vote while there
are some employees wanting to join the new pension
scheme or vice versa? What will be the remedy for
these minor employees?
The law does not give any clue to answer these issues and so the option
of individual decision and consent seems to be the
best pragmatic solution as it will not raise any
legal issue.
Equally contentious are also the rules of quorum, unanimous decision
simle majority or special majority if collective
decision is to be made. The law is expected to
answer such basic issues as some decisions, due to
their sensitivity to the overall system, are not
left to a simple majority decision or to a decision
by only some members. In some instances laws impose
a certain number of quorums to be fulfilled for a
collective decision.
A demonstrative legal rule can be a decision to call for a strike under
our labour law, which requires presence of at least
two thirds of union members and a decision can be
made by simple majority. If we are to pursue
collective decision for the new pension law case,
the first legal impediment will be the issue of
quorum. Even if the answer goes as majority rule,
what type of majority rule should be applied amongst
the rule of unanimity, simple majority, or special
majority will be a pressing legal issue.
This again leads us to resort to individual decision option as it will
have no collective impact at all and is easy for
implementation.
No doubt that amending such decisions and the role of managerial and
non-unionized member would also be debatable in case
of collective decision. As clearly stipulated in the
law, the pension scheme is applicable to all
permanent employees, including managerial employees
and non-unionized employees. Assuming existence of a
provident fund scheme through collective agreement,
defining the clear role of managerial and
non-unionized employees would have been important.
Deciding for the continuity of an already existing provident fund
scheme might not have an effect of amending a
collective agreement. Subject to the issue of
minority employees, if a majority of employees
decide to continue the existing scheme, the existing
collective agreement will not be in danger.
Nevertheless, if a majority of employees are to decide to be covered by
the new pension scheme, then the decision will have
an effect of amending the collective agreement
either positively or negatively depending on the
existing pension scheme.
Thus, the legal issue will be this; can non-members to a union or
managerial employees participate with union members
in any collective decision that will have an impact
of amending a collective agreement somehow? Does the
Ethiopian labour law accommodate such an option of
amending a collective agreement by majority vote of
all employees?
These issues should be well thought at and be given valid and
consistent answers before pursuing the collective
decision option. Undoubtedly, individual decision
does not have such legal complications. |
