MIBCO recently started to compel employees earning above the earnings threshold, to apply for an exemption to the MIBCO Provident Funds.
Clause 5(1) of the fund provides that if the employee earns below the threshold (currently R205 433.30 per annum), it is compulsory for such an employee to be a member of the MIBCO Provident Funds (Motor Industry Provident Fund and Autoworkers Provident Fund). Clause 5(2) on the other hand provides that employees who are not compulsory members in terms of sub-clause (1) …. may be admitted to voluntary membership of the Fund at the sole discretion of the Regional Council concerned.
Therefore, clauses 5(1) and 5(2) clearly distinguish between two categories of employees namely those employees earning above the threshold and those employees earning below the threshold. MIBCO’s interpretation and consequent enforcement of its interpretation were therefore incorrect in that an employee earning above the threshold was automatically exempted to belong to the fund and need not apply for an exemption to the regional council.
Consequently, the Motor Industry Staff Association (MISA) referred the matter to the MIBCO Dispute Resolution Centre (DRC), declaring a dispute with MIBCO’s interpretation of the matter. The RMI indicated its support for MISA’s application and interpretation of the agreements during the pre-arbitration and did not oppose the matter.
On 4 August 2022 an award was granted in favour of MISA, declaring that:
“Insofar as the Motor Industry Provident Fund Agreement applies to an employee in the motor industry, if the employees earns above the threshold [of R205 433.30 per annum]:
- MIBCO cannot compel such employee, when he did not voluntarily apply for membership to the Fund, to be a member of the Fund and MIBCO cannot compel such employee and his/her employer to contribute to the Fund.”
We believe the award correctly rectifies the position with regard to membership of the Motor Industry Provident Fund.