Compilation of decisions of the Committee on Freedom of Association

Collective bargaining15

Collective bargaining in the public sector

Economic situation, budgetary powers and collective bargaining

1. Adequate mechanisms for dealing with exceptional economic situations can be developed within the framework of the public sector collective bargaining system.

1. Possible avenues for constructive engagement can be based in the elaboration of adequate mechanisms for dealing with exceptional economic situations within the framework of the public sector collective bargaining system.

1. The reservation of budgetary powers to the legislative authority should not have the effect of preventing compliance with collective agreements entered into by, or on behalf of, that authority.

1. The Committee has considered that the exercise of financial powers by the public authorities in a manner that prevents or limits compliance with collective agreements already entered into by public bodies is not consistent with the principle of free collective bargaining.

1. A fair and reasonable compromise should be sought between the need to preserve as far as possible the autonomy of the bargaining parties, on the one hand, and measures which must be taken by governments to overcome their budgetary difficulties, on the other.

1. In so far as the income of public enterprises and bodies depends on state budgets, it would not be objectionable after wide discussion and consultation between the concerned employers and employees organizations in a system having the confidence of the parties for wage ceilings to be fixed in state budgetary laws, and neither would it be a matter for criticism that the Ministry of Finance prepare a report prior to the commencement of collective bargaining with a view to ensuring respect of such ceilings.

1. With regard to the principle relating to the fixing of wage ceilings, the Committee was of the opinion that it was vital for workers and their organizations to have the possibility of participating fully and significantly in the determination of this wider bargaining framework. That would mean their having access to all financial, budgetary or other information to allow them to assess the situation in full knowledge of the facts.

1. With regard to the requirement that draft collective agreements in the public sector must be accompanied by a preliminary opinion on their financial implications issued by the financial authorities, and not by the public body or enterprise concerned, the Committee noted that it was aware that collective bargaining in the public sector called for verification of the available resources in the various public bodies or undertakings, that such resources were dependent on state budgets and that the period of duration of collective agreements in the public sector did not always coincide with the duration of the State Budgetary Law a situation which could give rise to difficulties. The body issuing the above opinion could also formulate recommendations in line with government economic policy or seek to ensure that the collective bargaining process did not give rise to any discrimination in the working conditions of the employees in different public institutions or undertakings. Provision should therefore be made for a mechanism which ensured that, in the collective bargaining process in the public sector, both trade union organizations and the employers and their associations were consulted and could express their points of view to the authority responsible for assessing the financial consequences of draft collective agreements. Nevertheless, notwithstanding any opinion submitted by the financial authorities, the parties to collective bargaining should be able to conclude an agreement freely.

1. The Committee has endorsed the point of view expressed by the Committee of Experts in its 1994 General Survey: While the principle of autonomy of the parties to collective bargaining is valid as regards public servants covered by Convention No. 151, the special characteristics of the public service described above require some flexibility in its application. Thus, in the view of the Committee, legislative provisions which allow Parliament or the competent budgetary authority to set upper and lower limits for wage negotiations or to establish an overall “budgetary package” within which the parties may negotiate monetary or standard-setting clauses (for example: reduction of working hours or other arrangements, varying wage increases according to levels of remuneration, fixing a timetable for readjustment provisions) or those which give the financial authorities the right to participate in collective bargaining alongside the direct employer, are compatible with the Convention, provided they leave a significant role to collective bargaining. It is essential, however, that workers and their organizations be able to participate fully and meaningfully in designing this overall bargaining framework, which implies in particular that they must have access to all the financial, budgetary and other data enabling them to assess the situation on the basis of the facts. This is not the case of legislative provisions which, on the grounds of the economic situation of a country, impose unilaterally, for example, a specific percentage increase and rule out any possibility of bargaining, in particular by prohibiting the exercise of means of pressure subject to the application of severe sanctions. The Committee is aware that collective bargaining in the public sector “calls for verification of the available resources in the various public bodies or undertakings, that such resources are dependent on state budgets and that the period of duration of collective agreements in the public sector does not always coincide with the duration of budgetary laws – a situation which can give rise to difficulties”. The Committee therefore takes full account of the serious financial and budgetary difficulties facing governments, particularly during periods of prolonged and widespread economic stagnation. However, it considers that the authorities should give preference as far as possible to collective bargaining in determining the conditions of employment of public servants; where the circumstances rule this out, measures of this kind should be limited in time and protect the standard of living of the workers who are the most affected. In other words, a fair and reasonable compromise should be sought between the need to preserve as far as possible the autonomy of the parties to bargaining, on the one hand, and measures which must be taken by governments to overcome their budgetary difficulties, on the other.

1. As regards provisions which set a cap on remuneration in the public sector, compensation for unfair dismissal and other causes of termination of the employment relation or prohibit pension schemes which involve contributions of State resources, the Committee stated that it did not doubt the expressed will of the Government to look after the general interest, ensure equality, avoid unreasonable excesses in collective agreements and ensure financial and budgetary balance, but considered that these were permanent and unalterable limitations on the right of collective bargaining of workers organizations incompatible with Convention No. 98, which provides for free and voluntary bargaining of conditions of work. If the Government wishes to pursue a policy which seeks those objectives which, moreover, are legitimate, it can do so in the framework of collective bargaining without resorting to impositions which limit the content of bargaining by the parties to that bargaining.

1. It is acceptable that in the bargaining process the employer side representing the public administration seek the opinion of the Ministry of Finances or an economic and financial body that verifies the financial impact of draft collective agreements.

1. In context of economic stabilization, priority should be given to collective bargaining as a means of determining the employment conditions of public servants, rather than adopting legislation to restrain wages in the public sector.

1. The Committee deplored that, despite its previous calls to the government to refrain from intervening in the collective bargaining process, it once again failed to give priority to collective bargaining as a means of negotiating a change in the employment conditions of public servants, and that the legislative authority felt compelled to adopt the Public Sector Reduced Work-week and Compensation Management Act, particularly in view of the fact that this Act followed immediately the previous legislative intervention which had frozen public sector wages for one year.

1. Even though the principle of the autonomy of the parties in the collective bargaining process remains valid with regard to public servants and public employees covered by Convention No. 151, this may be applied with a certain degree of flexibility given the particular characteristics of the public administration, while at the same time, the authorities should, to the greatest possible extent, promote the collective bargaining process as a mechanism for determining the conditions of employment of public servants.

1. Special modalities of application may be established for collective bargaining within the public administration, but the right to free and voluntary collective bargaining cannot be considered to exist merely on the basis of the presentation of respectful petitions.

1. A system in which public employees may only present appropriate written representations which are non-negotiable, in particular with regard to conditions of employment, which may only be determined by the authorities who have exclusive competence in this matter, is not in conformity with Conventions Nos. 98, 151 and 154.