Compilation of decisions of the Committee on Freedom of Association

Collective bargaining15

Restrictions on the principle of free and voluntary bargaining

Intervention by the authorities in collective bargaining

1. In cases of government intervention to restrict collective bargaining, the Committee has considered that it is not its role to express a view on the soundness of the economic arguments used by the Government to justify its position or on the measures it has adopted. However, it is for the Committee to express its views on whether, in taking such action, the Government has gone beyond what the Committee has considered to be acceptable restrictions that might be placed temporarily on free collective bargaining

1. In any case, any limitation on collective bargaining on the part of the authorities should be preceded by consultations with the workers and employers organizations in an effort to obtain their agreement.

1. In cases in which governments had, on many occasions over the past decade, resorted to statutory limitations on collective bargaining, the Committee pointed out that repeated recourse to statutory restrictions on collective bargaining could, in the long term, only prove harmful and destabilize labour relations, as it deprived workers of a fundamental right and means of furthering and defending their economic and social interests.

1. Repeated and extensive intervention in collective bargaining can destabilize the overall framework for labour relations in the country if the measures are not consistent with the principles of freedom of association and collective bargaining.

1. State bodies should refrain from intervening to alter the content of freely concluded collective agreements.

1. State bodies should refrain from intervening in free collective bargaining between workers and employers organizations.

1. In general terms, the Committee wishes to underline the importance it attaches to the principle of the autonomy of the parties to the collective bargaining process, a principle generally recognized in the preparatory discussions that led to the adoption by the Conference in 1981 of the Collective Bargaining Convention (No. 154). It follows from this principle that the public authorities should not as a rule intervene in order to modify the contents of collective agreements freely concluded. Such intervention would be justified only for cogent reasons of social justice and the general interest.

1. Respect for the rule of law implies avoiding retroactive intervention in collective agreements through legislation.

1. The intervention by a representative of the public authorities in the drafting of collective agreements, unless it consists exclusively of technical aid, is inconsistent with the spirit of Article 4 of Convention No. 98.

1. The Committee recognizes that there comes a time in bargaining where, after protracted and fruitless negotiations, the authorities might be justified in stepping in when it is obvious that the deadlock in bargaining will not be broken without some initiative on their part.

1. The Committee has expressed the view that the mere existence of a deadlock in a collective bargaining process is not in itself a sufficient ground to justify an intervention from the public authorities to impose arbitration on the parties to the labour dispute. Any intervention by the public authorities in collective disputes must be consistent with the principle of free and voluntary negotiations; this implies that the bodies appointed for the settlement of disputes between the parties to collective bargaining should be independent and recourse to these bodies should be on a voluntary basis, except where there is an acute national crisis.

1. Where intervention by the public authorities is essentially for the purpose of ensuring that the negotiating parties subordinate their interests to the national economic policy pursued by the government, irrespective of whether they agree with that policy or not, this is not compatible with the generally accepted principles that workers and employers organizations should enjoy the right freely to organize their activities and to formulate their programmes, that the public authorities should refrain from any interference which would restrict this right or impede the lawful exercise thereof, and that the law of the land should not be such as to impair or be so applied as to impair the enjoyment of such right.

1. Legislation which permits the refusal to approve a collective agreement on grounds of errors of pure form is not in conflict with the principle of voluntary negotiation. If this legislation, however, implies that the filing of a collective agreement may be refused on grounds such as incompatibility with the general policy of the government, it would amount to a requirement that prior approval be obtained before a collective agreement can come into force.

1. While the Committee appreciates that the introduction of wage restraint measures must be timed in order to obtain the maximum impact on the economic situation, it nevertheless considers that the interruption of already negotiated contracts is not in conformity with the principles of free collective bargaining because such contracts should be respected.

1. While it is not its role to express a view on the soundness of the economic arguments invoked to justify government intervention to restrict collective bargaining, the Committee must recall that measures that might be taken to confront exceptional circumstances ought to be temporary in nature having regard to the severe negative consequences on workers terms and conditions of employment and their particular impact on vulnerable workers.

1. The harmonious development of labour relations would be facilitated if the public authorities, when dealing with the problems concerning the workers loss of purchasing power, adopted solutions which did not involve modifications of agreements without the consent of the parties.

1. Giving by law a special incentive encouraging one of the parties to denounce/cancel collective agreements by which pension funds were set up constitutes interference with the free and voluntary nature of collective bargaining. Moreover, the Committee considers that after the collective agreements by which pension funds were set up were denounced by one of the parties, it pertained to the parties themselves to determine whether and under which terms and conditions the funds would be dissolved and what would become of their assets. Nothing in Convention No. 98 enables the Government to step in and unilaterally determine these issues, much less to unilaterally determine that the assets of a private pension fund, established by collective agreement, would be appropriated and automatically transferred to a public pension scheme. These measures are contrary to Article 3 of Convention No. 87 and Article 4 of Convention No. 98.

1. The Committee has highlighted the importance, in the context of an economic crisis, of maintaining permanent and intensive dialogue with the most representative workers and employers organizations.

1. Making the validity of collective agreements signed by the parties subject to the approval of these agreements by the authorities is contrary to the principles of collective bargaining and of Convention No. 98.

1. Legal provisions which make collective agreements subject to the approval of the ministry of labour for reasons of economic policy, so that employers and workers organizations are not able to fix wages freely, are not in conformity with Article 4 of Convention No. 98 respecting the promotion and full development of machinery for voluntary collective negotiations.

1. The Government must ensure that the process of registration and publication of collective agreements only involves checks on compliance with the legal minima and questions of form, such as, for example, the determination of the parties and the beneficiaries of the agreement with sufficient precision and the duration of the agreement.

1. The requirement of Cabinet approval for negotiated agreements and of conformity with the policy and guidelines unilaterally set for the public sector are not in full conformity with the principles of freedom of association, which apply to all workers covered by Convention No. 98.

1. The requirement of previous approval by a government authority to make an agreement valid might discourage the use of voluntary collective bargaining between employers and workers for the settlement of conditions of employment. Even though a refusal by the authorities to give their approval may sometimes be the subject of an appeal to the courts, the system of previous administrative authorization in itself is contrary to the whole system of voluntary negotiation.

1. Objections by the Committee to the requirement that prior approval of collective agreements be obtained from the government do not signify that ways could not be found of persuading the parties to collective bargaining to have regard voluntarily in their negotiations to considerations relating to the economic or social policy of the government and the safeguarding of the general interest. But to achieve this, it is necessary first of all that the objectives to be recognized as being in the general interest should have been widely discussed by all parties on a national scale through a consultative body in accordance with the principle laid down in the Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113). It might also be possible to envisage a procedure whereby the attention of the parties could be drawn, in certain cases, to the considerations of general interest which might call for further examination of the terms of agreement on their part. However, in this connection, persuasion is always to be preferred to constraint. First, instead of making the validity of collective agreements subject to governmental approval, it might be provided that every collective agreement filed with the ministry of labour would normally come into force a reasonable length of time after being filed; if the public authority considered that the terms of the proposed agreement were manifestly in conflict with the economic policy objectives recognized as being desirable in the general interest, the case could be submitted for advice and recommendation to an appropriate consultative body, it being understood, however, that the final decision in the matter rested with the parties to the agreement.

1. The requirement of ministerial approval before a collective agreement can come into effect is not in full conformity with the principles of voluntary negotiation laid down in Convention No. 98. In cases where certain collective agreements contain terms which appear to conflict with considerations of general interest, it might be possible to envisage a procedure whereby the attention of the parties could be drawn to these considerations to enable them to examine the matter further, it being understood that the final decision thereon should rest with the parties. The setting up of a system of this kind would be in conformity with the principle that trade unions should enjoy the right to endeavour to improve, by means of collective bargaining, the conditions of living and of work of their members and that the authorities should refrain from any interference which might limit this right.

1. A provision which establishes as a ground for refusing approval the existence in a collective agreement of a clause which interferes with the right reserved to the State to coordinate and have the overall control of the economic life of the nation involves the risk of seriously restricting the voluntary negotiation of collective agreements.

1. The interruption by law of provisions in already concluded collective agreements is not in conformity with the principles of free collective bargaining.

1. A legal provision which modifies unilaterally the content of signed collective agreements, or requires that they be renegotiated, is contrary to the principles of collective bargaining, as well as to the principle of the acquired rights of the parties.

1. In a case in which, in the context of a stabilization policy, the provisions of collective agreements relating to remuneration were suspended (in the public and private sectors), the Committee emphasized that collective agreements which were in force should be applied fully (unless otherwise agreed by the parties).

1. The suspension or derogation by decree without the agreement of the parties of collective agreements freely entered into by the parties violates the principle of free and voluntary collective bargaining established in Article 4 of Convention No. 98. If a government wishes the clauses of a collective agreement to be brought into line with the economic policy of the country, it should attempt to persuade the parties to take account voluntarily of such considerations, without imposing on them the renegotiation of the collective agreements in force.

1. Repeated recourse to legislative restrictions on collective bargaining can only, in the long term, prejudice and destabilize the labour relations climate, if the legislator frequently intervenes to suspend or terminate the exercise of rights recognized for unions and their members. Moreover, this may have a detrimental effect on workers interests in unionization, since members and potential members could consider it useless to join an organization the main objective of which is to represent its members in collective bargaining, if the results of such bargaining are constantly cancelled by law.

1. The question of whether serious economic problems of enterprises may, in certain cases, call for the modification of collective agreements must be addressed, and, since it can be handled in various ways, the way to proceed should be determined within the framework of social dialogue.

1. Legislation which obliges the parties to renegotiate acquired trade union rights is contrary to the principles of collective bargaining.

1. In examining allegations of the annulment and forced renegotiation of collective agreements for reasons of economic crisis, the Committee was of the view that legislation which required the renegotiation of agreements in force was contrary to the principles of free and voluntary collective bargaining enshrined in Convention No. 98 and insisted that the government should have endeavoured to ensure that the renegotiation of collective agreements in force resulted from an agreement reached between the parties concerned.

1. It would not be objectionable if, once it became clear that the implementation of an agreement concerning pension funds dependent on the State budget would be practically impossible, and after having exhausted all good faith efforts to achieve the implementation of the agreement, the Government undertook concrete efforts to renegotiate the agreement in order to find a solution that would be commonly acceptable to the parties.

1. Referring to an Act on the extension of collective agreements which followed other government interventions in collective bargaining, the Committee pointed out that such action, involving as it did statutory intervention in the collective bargaining process, should only be taken in cases of emergency and for brief periods of time. The Committee hoped that in future no similar measures would be taken to interfere with free collective bargaining or to restrict the right of workers to defend their economic and social interests through industrial action.

1. If, as part of its stabilization policy, a government considers that wage rates cannot be settled freely through collective bargaining, such a restriction should be imposed as an exceptional measure and only to the extent that is necessary, without exceeding a reasonable period, and it should be accompanied by adequate safeguards to protect workers living standards.

1. A three-year period of limited collective bargaining on remuneration within the context of a policy of economic stabilization constitutes a substantial restriction, and the legislation in question should cease producing effects at the latest at the dates mentioned in the Act, or indeed earlier if the fiscal and economic situation improves.

1. Restraints on collective bargaining for three years are too long.

1. Where wage restraint measures are taken by a government to impose financial controls, care should be taken to ensure that collective bargaining on non-monetary matters can be pursued and that unions and their members can fully exercise their normal trade union activity.

1. The Committee is not mandated to decide on acceptable amounts of financial restraint, but where possible these measures should only extend to the sectors actually facing an emergency situation.

1. As regards the obligation for future collective agreements to respect productivity criteria, the Committee recalled that if, within the context of a stabilization policy, a government may consider for compelling reasons that wage rates cannot be fixed freely by collective bargaining (in the present case the fixing of wage scales excludes index-linking mechanisms and must be adjusted to increases in productivity), such a restriction should be imposed as an exceptional measure and only to the extent necessary, without exceeding a reasonable period and it should be accompanied by adequate safeguards to protect workers living standards. This principle is all the more important because successive restrictions may lead to a prolonged suspension of wage negotiations, which goes against the principle of encouraging voluntary collective negotiation.

1. The impossibility of negotiating wage increases on an ongoing basis is contrary to the principle of free and voluntary collective bargaining enshrined in Convention No. 98.

1. Legislative provisions prohibiting the negotiation of wage increases beyond the level of the increase in the cost of living are contrary to the principle of voluntary collective bargaining embodied in Convention No. 98; such a limitation would be admissible only if it remained within the context of an economic stabilization policy, and even then only as an exceptional measure and only to the extent necessary, without exceeding a reasonable period of time.

1. In a case where government measures had fixed the base reference for the indexation of wages, whereas the parties had fixed another indexation system, the Committee recalled that the intervention of a government in areas which traditionally have always been negotiated freely by the parties could call into question the principle of free collective bargaining recognized by Article 4 of Convention No. 98, if it is not accompanied by certain guarantees and in particular if its period of application is not limited in time.

1. The determination of criteria to be applied by the parties in fixing wages (cost-of-living increases, productivity, etc.) is a matter for negotiation between the parties and it is not for the Committee to express an opinion on the criteria that should be applied in fixing pay adjustments.

1. In one case it was alleged that Article 4 of Convention No. 98 had been infringed because, when lengthy negotiations had reached a deadlock, the Government gave effect to the claims of the union by an enactment. The Committee pointed out that such an argument would, if carried to its logical conclusion, mean that, in nearly every country where the workers were not sufficiently strongly organized to obtain a minimum wage, and that this standard was prescribed by law, Article 4 of Convention No. 98 would be infringed. Such an argument would clearly be untenable. If a government, however, adopted a systematic policy of granting by law what the unions could not obtain by negotiation, the situation might call for reappraisal.

1. In a case in which general wage increases in the private sector were established by law, which were added to the increases agreed upon in collective agreements, the Committee drew to the Governments attention the fact that the harmonious development of industrial relations would be promoted if the public authorities, in tackling problems relating to the loss of the workers purchasing power, were to adopt solutions which did not entail modifications of what had been agreed upon between workers and employers organizations without the consent of both parties.

1. It is not contrary to Conventions Nos. 87 and 98 for a minister to urge the social partners, within the framework of the encouragement and promotion of the full development and utilization of collective bargaining machinery, to find a mutually acceptable solution to the conflict.

1. The presence of police forces in close proximity to the room where minimum wage negotiations take place is liable to unduly influence the free and voluntary nature of negotiations. Any police presence in the vicinity of meeting rooms where negotiations are taking place must be strictly justified by the circumstances.

1. Obliging the parties to a collective agreement to meet the extremely high cost of publication of that agreement in the Official Journal seriously impedes the application of Article 4 of Convention No. 98, which enshrines the principle of promotion of collective bargaining.