Definitive Report - REPORT_NO395, June 2021

CASE_NUMBER 3327 (Brazil) - COMPLAINT_DATE: 08-JUN-18 - Closed

Allegations: The complainant organizations denounce the imposition of fines for exercising the right to strike in the oil sector that exceed the trade unions’ capacity to pay

1. 75. The complaint is contained in the communication received on 8 June 2018 from the Single Confederation of Workers (CUT) and the Single Confederation of Oil Workers (FUP).
2. 76. The Government sent its observations in communications dated 10 April 2019 and 1 February 2021.
3. 77. Brazil has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), but it has ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant’s allegations

1. 78. In their communication received on 8 June 2018, the complainants denounce the imposition of fines for exercising the right to strike that exceed the trade unions’ capacity to pay. They allege in particular that:
   • (i) a day before a strike that was called by a number of trade unions in the petroleum sector for 30 and 31 May and 1 June 2018, on 29 May 2018, the State (União) and the enterprise with public participation, Petróleo Brasileiro, S.A. (henceforth, the oil company) filed an action for annulment of the strike, alleging its abusive nature and its political and ideological motivation; and requested that the work of all workers in the oil company and its subsidiaries be ensured, failing which a fine of 1,000,000 Brazilian reals (approximately US$196,000) would be imposed, and that the trade unions refrain from preventing the free movement of goods and persons (or face a fine of same amount);
   • (ii) the competent judge of the Supreme Labour Court issued a decision on the same day, 29 May 2018, ordering the trade unions to refrain from holding the strike or be fined 500,000 reals (approximately US$98,000) per day as it deemed the strike to be of an apparently abusive nature. The judge based the decision on the following grounds: the strike was of a political nature; such strikes had no basis in the prevailing jurisprudence of the collective disputes department of the Supreme Labour Court; a collective labour agreement signed between the social actors was in force until 2019; and, in the judge’s view, the strike bordered on opportunism, was organized to cause disturbance and was void of all sensitivity as it would cause potentially serious damage to the population;
   • (iii) the judge was mistaken in considering the strike was of a merely political nature and that, beyond the issue of the nature of the strike, holding a strike to express discontent regarding certain regulations affecting the workers’ rights is legal. The decision to call the strike had five objectives: (1) reduction of fuel and cooking gas prices; (2) preservation of jobs, and resumption of domestic fuel production; (3) cessation of the importation of petrol and other oil derivatives; (4) action against privatization and the dismantling of the employer system; and (5) resignation of the Chairperson of the company. While the court decision cited these objectives, it failed to conclude, in its interpretation, that the strike sought to preserve the jobs and the public company. The movement was driven by both trade unionists as well as workers, citizens and consumers, which did not undermine the legitimacy of the strike. The planned action cannot be considered a purely political strike, disconnected from the world of work and the productive sector concerned;
   • (iv) having carried out the strike on 30 May 2018, the same Supreme Labour Court judge, highlighting the alleged incompliance with the prior court order, quadrupled the amount of the daily fine initially set, which rose to 2,000,000 reals (approximately US$392,000). The complainants allege that this court decision prevented the effective exercise of the right to strike; and
   • (v) while fuel and gas production and distribution services are mentioned in article 10(1) of Act No. 7783/89, they are not subject to an absolute restriction on striking. Rather, in these sectors, the right to strike is guaranteed insofar as trade unions, employers and workers ensure, through common agreement during the strike, the provision of essential services to meet the basic needs of the community. In the strike in question, the workers’ organizations had given these guarantees.
2. 79. The complainants refer to Case No. 1889, which the Committee had previously examined, concerning excessive sanctions for exercising the right to strike in the same oil company. In this case, the Committee considered that the sanctions must be proportionate to the seriousness of the infringement committed and must in no case compromise the continuation of the activities of the parties thus sanctioned, and highlighted that strikes should not be subject to fines. Warning of the intimidating and inhibitive effect of the amount of the fines (US$100,000 per day of strike), the Committee considered, in that case, that the imposition of fines for exercising the right to strike was not consistent with the principles of freedom of association and requested the Government to take measures to ensure that the fines were annulled.
3. 80. To conclude, the complainants consider that in the present case the judicial authorities imposed fines that were both inappropriate and excessive with respect to the legal exercise of the right to strike which, as they exceeded the trade unions’ financial capacity, compromised their survival.

B. The Government’s reply

1. 81. In a communication of 10 April 2019, the Government sent its reply to the complainants’ allegations through a legal brief from the Office of the Attorney General of the Union, which relays the court decision issued on 29 may 2018 ordering the organizations concerned to refrain from carrying out the strike. The court ruling:
   • (i) verified, based on the information submitted, that the strike had five objectives: (1) reduction of fuel and cooking gas prices; (2) preservation of jobs, and resumption of domestic fuel production; (3) cessation of the importation of petrol and other oil derivatives; (4) action against privatization and the dismantling of the employer system; and (5) resignation of the Chairperson of the company;
   • (ii) considered, in view of the abovementioned, that the strike was of a political nature, and that void of all sensitivity, it was carried out to cause disturbance; the strike had an essentially political agenda and a strong interference not only in the management of Petrobras, but also in its own public policy actions, which affected the whole country and which couldn’t be resolved under pressure of a professional category;
   • (iii) highlighted that the claims did not refer to the working conditions of the company’s employees and that a collective bargaining agreement entered into with the social partners was still in force until 2019. In this regard, it stressed that the employer, though it suffered the effects of the stoppage, was unable to resolve such claims, which concerned the public authorities;
   • (iv) also observed that the strike was planned at a time when the country was emerging from a truckers’ strike which had caused serious economic damage in the country and considered that the damage was potentially serious as it may have prolonged the harmful effects caused by the truckers’ strike;
   • (v) considered, in this sense that: the announced strike revealed a strong and combative sector and that.. an eventual strike in the oil sector would entail a potentially serious harm for the Brazilian population, as it would imply a continuation of the damages caused by the truckers’ strike;he strike bordered opportunism and its outbreak was not proportionate to the aims that, in theory, could be achieved with the pursued agenda and the sacrifice of society; and
   • (vi) in light of the apparently abusive nature of the strike and the serious damage that it could entail, ordered the trade unions to refrain from holding the strike and blocking the free movement of goods and persons, or be fined 500,000 reals (approximately US$98,000).
2. 82. Having transcribed the aforementioned court ruling, the Attorney General’s Office highlights that:
   • (i) the complaint challenges a court ruling issued independently and in conformity with the guarantee of an impartial judge, so that the complainant’s allegations question the sovereignty of judicial decisions;
   • (ii) the complainants sought to undermine the judiciary by not respecting the decision taken; furthermore, the complainants filed appeals which are still pending and thus the complaint before the ILO is aimed at limiting the independence of the national jurisdiction;
   • (iii) the right to strike is not absolute and its reasonableness and proportionality must be evaluated with regard to the impact of the strike on other rights and interests;
   • (iv) the proposed strike was intransigent and insensitive, and did not seek to defend the occupational or economic interests of the oil sector workers. In light of the five objectives quoted, it is clear that the objective was rather to sow chaos in the country and destabilize the entire political, economic and judicial system, as well as to upset citizens’ safety and well-being;
   • (v) the organizations did not fulfil the requirements established under Act No. 7783/89, including prior collective bargaining (a collective agreement had been in force until August 2019), public notice of an assembly, or description of how essential services would be provided;
   • (vi) a dispute between professionals and employers must not completely undermine the interests of society and, following the principles of reasonableness and proportionality, the effective impact of the exercise of the strike on other fundamental rights and interests must be assessed;
   • (vii) in another court decision concerning a truckers’ strike which was also considered abusive (the strike consisted of driving at reduced speed and occupying several lanes to slow down traffic), The Federal Supreme Court recalled that the compatibility between fundamental rights must be examined in the light of criteria of reasonableness and proportionality. The Court considered that in the case of the truckers’ strike there was abuse, as it found that the strike had a disproportionate and intolerable effect on the rest of society, causing the interruption of fuel and inputs to provide essential public services; and
   • (viii) by quoting in their complaint one paragraph of the Compilation of decisions of the Committee on Freedom of Association, which indicates that the oil sector does not constitute an essential service in the strict sense of the term, the CUT and FUT, seek to question, with the possible aim of modifying or repealing it, Article 10(1) of Act No. 7783/89, which establishes that services in the oil sector are essential services, without due compliance with the legal process or without any ruling of unconstitutionality on the above-mentioned provision by the judiciary.
3. 83. In a communication dated 1 February 2021, in addition to reiterating the elements contained in its previous communication, the Government refers to the social context in which the public authorities decided to file a legal action to prevent the start of the strike in the present case. The Government states that on 21 May 2018, a truck drivers’ strike was declared and that it lasted 11 days. The truck drivers blocked roads and prevented the circulation of even essential goods. Services such as fuel supply and distribution of food and medical supplies were paralysed. The main demand of the truckers was a reduction in the price of diesel, which was met by the Federal Government. In view of this scenario of social commotion and insofar as the company is the main producer and distributor of fuel in the country, the Federal Government resorted to the courts to prevent further substantial damage to society and the country. The Government states that the above reasons show that the legal action initiated to prevent the strike in the oil sector was not hasty but was intended to prevent this second strike from leading the country into chaos.
4. 84. The Government also refers to the consideration of the right to strike by the Brazilian legal system. The Government indicates in this respect that: (i) article 9 of the Federal Constitution recognizes the right to strike as a fundamental right; (ii) at the same time, the Constitution itself (article 9.1) recognizes that the right to strike is not absolute and that it must coexist with the other fundamental rights, that the perpetrators of abuses committed during strikes must be punished in accordance with the law and that it is up to the legislator to define the essential activities that are indispensable to the community and in respect of which the exercise of the right to strike is conditioned; (iii) based on these constitutional principles, Law No. 7783/89 regulates the exercise of the right to strike; (iv) this law defines in particular the essential activities for the community that must be attended even in case of strike, conditioning but not prohibiting the strike in the sectors concerned; (v) the law establishes some requirements for the validity of the strike movement, such as: the existence of a real attempt to negotiate, before the strike takes place, the approval by the respective assembly of workers, the prior notice to the employer, which in essential activities must occur within 72 hours of the strike; and (vi) the above-mentioned law defines the existence of an abuse of the right to strike when its rules are not complied with or when the strike is maintained after the conclusion of an agreement or after a decision of the labour justice system. The Government states that in the present case: (i) the union did not comply with the formal requirements contained in the law (existence of collective bargaining, meeting of a union assembly and strike notice); (ii) the union could not call a strike as there was a collective agreement in force for the category until 31 August 2019 and the claims had no relation whatsoever with the clauses of the agreement in force; and (iii) the Federal Government’s legal action sought to avoid possible damage to the population which had already been suffering for more than a week with the interruption of essential services resulting from the truck drivers’ strike.

C. The Committee’s conclusions

1. 85. The Committee notes that in the complaint the complainants denounce that, after having called a three-day strike that fulfilled the legal requirements, at the request of the State and the oil company, a court decision was issued that prohibited the strike and prevented it by imposing fines that exceeded the trade unions’ capacity to pay and compromised their survival. On the other hand, the Committee observes that the Government, after describing the social context in which the strike in question was initiated and recalling the constitutional and legal guidelines governing the right to strike, states that the strike was of a political nature and was held to cause disturbance, that it did not fulfil the legal requirements, that a collective agreement was in force and that the formal conditions for declaring a strike had not been respected. The Committee notes that the Government also states that the strike: (i) entailed the risk of significant damage, particularly since a truckers’ strike had recently taken place; and (ii) taking into consideration that the company is the main fuel producer and distributor in the country, the Federal Government’s action sought to avoid throwing the country into chaos after more than a week of interruption of essential services due to the truckers’ strike.
2. 86. In this regard, the Committee notes, that: (i), through a court decision of an independent judicial body, it was found that the strike was political and abusive, and the trade unions were ordered to refrain from carrying out the strike or be fined; and (ii), as they did not comply with the court decision, the same court imposed in the first instance a higher fine of 2,000,000 reals per day of strike (approximately US$392,000). While noting divergences between the parties as to whether minimum services had been established, the Committee notes that the judicial body ordered the organizations concerned to refrain from paralysing activities in light of its qualification of the strike as political, without considering the issue of minimum services. The Committee also notes that in its considerations, the judicial decision alluded not only to the political nature of the strike, but also to the potentially serious harm that its exercise could entail for the population, in particular because it could imply a continuation of the damage caused by a previous truckers’ strike and that its scope was not proportionate to the aims it pursued and to the sacrifice of the society in order to achieve those aims.
3. 87. The Committee also notes that, following an appeal filed by the trade union organizations against the aforementioned judicial decision of first instance, the Supreme Labour Court, in a decision issued on 14 December 2020: (i) confirmed the first-instance decision considering the strike abusive because it was eminently political in nature and that it had ostensibly disregarded the initial judicial determination to abstain from the strike; and (ii) it reduced the fine from 2,000,000 reals to an amount of 250,000 reals for each trade union organization, observing that the strike had lasted one and a half days of the three initially planned and taking into account the financial capacities of the trade unions.
4. 88. On the nature of the strike, the Committee notes that, as it was alleged by both parties, the strike had five objectives: (1) reduction of fuel and cooking gas prices; (2) preservation of jobs, and resumption of domestic fuel production; (3) cessation of the importation of petrol and other oil derivatives; (4) action against privatization and the dismantling of the employer system; and (5) resignation of the Chairperson of the company.
5. 89. The Committee notes in this regard that: (i) national legislation (Law 7,783 of 1989) establishes the conditions for the exercise of the right to strike and in particular provides that the labour courts shall decide on the total or partial admissibility or inadmissibility of the claims (article 8); (ii) the legislation provides that the production and distribution of fuels is an essential service, conditioning the exercise of the right to strike in said sector to the obligation that trade unions, employers and workers guarantee, by mutual agreement, the provision of essential services to meet the unavoidable needs of the communities (articles 9, 10 and 11); (iii) the legislation provides that unavoidable needs are those that, if not met, would endanger the survival, health or safety of the population (sole paragraph of article 11); (iv) the legislation establishes that the exercise of the right to strike is abusive if the law is not observed when the stoppage continues after the conclusion of an agreement, collective agreement or judicial decision on labor (article 14); and (v) in the present case, both in the first and second instance, the national courts have determined that the strike at issue was eminently political in nature and consequently considered it abusive.
6. 90. In this regard, the Committee recalls that while it has considered that to determine situations in which a strike could be prohibited, the criterion which has to be established is the existence of a clear and imminent threat to the life, personal safety or health of the whole or part of the population, [see Compilation of decisions of the Committee on Freedom of Association, sixth edition, 2018, para. 836], it has also considered that what is meant by essential services in the strict sense of the term depends to a large extent on the particular circumstances prevailing in a country. Moreover, this concept is not absolute, in the sense that a non-essential service may become essential if a strike lasts beyond a certain time or extends beyond a certain scope, thus endangering the life, personal safety or health of the whole or part of the population [see Compilation para. 837].
7. 91. While observing that the Brazilian legislation provides for guarantees for the exercise of a strike and measures to resolve disputes through an independent judicial body and that the right to strike is not absolute, can be restricted in essential services in the strict sense of the term, including to meet the unavoidable needs of the communities, the Committee also recalls that the occupational and economic interests which workers defend through the exercise of the right to strike do not only concern better working conditions or collective claims of an occupational nature, but also the seeking of solutions to economic and social policy questions and problems facing the undertaking which are of direct concern to the workers. In addition, the Committee recalls that the right to strike should not be limited solely to industrial disputes that are likely to be resolved through the signing of a collective agreement; workers and their organizations should be able to express in a broader context, if necessary, their dissatisfaction as regards economic and social matters affecting their members interests [see Compilation, paras 758 and 766].
8. 92. In view of the above, the Committee considers that in addition to judicial decisions on this matter, the situation should be examined in light of the circumstances of time, manner and place, in order to assess the reasons put forward. The Committee recalls that while purely political strikes do not fall within the scope of the principles of freedom of association, trade unions should be able to have recourse to protest strikes, in particular where aimed at criticizing a government’s economic and social policies [see Compilation, para. 763]. At the same time, the Committee recalls that it does not have the authority to interpret the scope of national legislation, which falls to the national competent authorities and ultimately the courts [see Compilation, para. 20].
9. 93. With regard to the sanctions denounced by the complainants, the Committee notes that in the case under examination, they were linked to the non-compliance with a judicial decision ordering to refrain from strike action which if not implemented would result in a daily fine and that the trade unions concerned, which could resort to an appeal body to enforce their claims, were responsible for complying with the decision issued by independent judicial bodies. The Committee observes, on the other hand, that the complainants denounce the inappropriate and excessive character of the fines issued, which, exceeding the trade unions’ financial capacity, compromised their survival.
10. 94. In this regard, the Committee recalls that, in the past, it examined the issue of the imposition of excessive fines for an allegedly abusive strike in the same petroleum company, where the Committee had recalled that the imposition of sanctions, including fines, on the social partners in the case of infringement of labour legislation is not in itself a matter of objection; however, such sanctions must be proportionate to the seriousness of the infringement committed and must in no case compromise the continuation of the activities of the parties thus sanctioned [see the 306th Report, Case No. 1889 of March 1997, paras 171–175].
11. 95. While noting that the fines initially issued (approximately US$98,000 per day of strike in the decision prior to the initiation of the strike and US$392,000 in the decision of first instance following the initiation of the strike) were very high and likely to have a disproportionate impact on the life of the unions concerned, the Committee notes that, in the second instance, the Supreme Labor Court significantly reduced the amount of the fines imposed and the final amount (of approximately US$49,000 for each trade union) was based on the short duration of the strike and the financial capacity of the unions. Observing that the legislation may establish the parameters in this matter, and in light of the points previously mentioned, the Committee invites the Government to submit the issue of fines imposed for the abusive exercise of the right to strike for tripartite dialogue with the most representative organizations.

The Committee’s recommendation

1. 96. In the light of its foregoing conclusions, which do not call for further examination, the Committee invites the Governing Body to approve the following recommendation:
   • Observing that the legislation may establish the parameters in this matter, and in light of the points highlighted in the foregoing conclusions, the Committee invites the Government to submit the issue of fines imposed for the abusive exercise of the right to strike for tripartite dialogue with the most representative organizations.