NAC and GIPF reach arbitration agreement

18 Dec 2013 14:30pm
WINDHOEK, 18 DEC (NAMPA) – The drawn-out retirement benefit dispute between the Namibia Airports Company (NAC) and the Government Institutions’ Pension Fund (GIPF) has finally been resolved.
The NAC conducted a major restructuring exercise during March 2012, resulting in about 32 workers being dismissed.
These workers then applied to the GIPF for a retirement benefit in terms of GIPF Rule 3.4, which states that an employee who is dismissed due to re-organisation or restructuring can apply for a retirement benefit from the GIPF. The GIPF then proceeded to consider the applications of the dismissed employees.
“In terms of the award delivered by arbitrator Eben de Klerk on 06 December 2013, GIPF’s interpretation of the rules on retirement for affected workers was upheld, and the NAC’s claims were dismissed with costs.
Due to what seemed to be an overly-stretched dispute, the GIPF took cognisance of the financial hardship which the dismissed employees were experiencing while waiting for the arbitration process to be finalised,” a media statement issued by the GIPF on Tuesday said.
The NAC were disputing whether Rule 3.4 was applicable, and instead argued that Rule 7.1, which deals with withdrawal benefits, was applicable.
The difference in the interpretation of the GIPF rules on this specific benefit formed the basis of the dispute. In this regard, the GIPF nonetheless made advance payments to the dismissed employees.
The first advance payment minus income tax was made during November/December 2012, and was equivalent to a cash withdrawal benefit in terms of Rule 7.1.
The second advance payment was made during June /July 2013 minus income tax based on a minimum amount of transfer benefits in terms of Rule 7.2, or a minimum amount of a retirement benefit in terms of Rule 3.4, whichever is less.
The payments were based on minimum amounts, which the dismissed employees would be entitled to, regardless of the outcome of the arbitration.
“The GIPF is committed to maintain mutual relations with all its participating institutions, and urges employers to consult the Fund whenever embarking on restructuring or reorganisation exercises to get all relevant information regarding the impact that such a decision could have on them and their employees’ pension benefits,” the statement added.