All employees in private security sector must belong to provident fund

All employees in the private security sector, irrespective of their job description, must become members of the Private Security Sector Provident Fund, and likewise all employers in the sector must participate in the provident fund.

If this seems to be stating the obvious, the Financial Services Tribunal found it necessary to spell this out in some detail in a recent judgment.

In November 2020, the Pension Funds Adjudicator ordered the fund to, among other things, register Savika Armed Response as a participating member from 22 November 2004 and to register a deceased man as a member from September 2008 to 30 April 2018.

Savika asked the tribunal to reconsider the PFA’s order. A key issue in its submission was the deceased’s eligibility to be registered with the fund.

According to Savika, the deceased did not qualify to be registered, because he was a mechanic, and mechanics are excluded from membership of the fund.

It asserted that because the deceased was not a “general worker”, as defined by sub-clause (31)(d) of the Sectoral Determination for the Private Security Sector, he had not been registered as a member of the fund. In Savika’s view, apart from security guards, only general workers (as defined by the sectoral determination) are eligible to be registered with the fund.

But the tribunal did not accept this, for the following reasons:

• The fund’s rules state that each eligible employee shall, as a condition of employment, become a member of the fund with effect from the commencement of the fund or the commencement of the employer’s business in the private security sector, whichever is later.
• The fund’s rules define an eligible employee as a person who is in the employment of an employer in the private security industry and who is, inter alia, regarded as an employee in terms of the sectoral determination and the Labour Relations Act (LRA).
• Clause 27 of the sectoral determination states that each employee who falls within the definition of “eligible employee”, as contained in the fund’s rules, shall on or after the coming into operation of the sectoral determination become a member of the provident fund.
• In terms of the sectoral determination, an employee is any person who works for another person or who in any manner assists in carrying on or conducting the business of an employer, and who receives, or is entitled to receive, any remuneration.
• If a person qualifies as an “employee” in terms of the sectoral determination and the LRA, such person would be an “eligible employee” for purposes of the fund’s rules and is not only entitled to become a member of the fund but is obliged to become a member.
• Nothing in the fund’s rules excludes a “general worker” as defined in the sectoral determination from the ambit of the definition of an “eligible employee” in the fund’s rules. Nothing in the fund’s rules disqualifies a “general worker”, as defined in the sectoral determination, from membership of the fund.

The tribunal said the sole criterion for eligibility for membership of the fund is that a person should be an employee within the meaning of that word as found in the sectoral determination, the fund’s rules and the LRA.

“In our view, the submission on behalf of the applicant to elevate a definition of a category of employee above what the rules enjoin as the requirement for a person to qualify for membership of the provident fund is misplaced, as it seeks to introduce a definition of employee which is not contemplated by the fund rules.”

The tribunal also found that although Savika had started trading in November 2004, it had become a participating employer only in March 2016.

The application was dismissed.