Definitive Report - Report No 123, 1971

Case No 614 (Peru) - Complaint date: 19-NOV-69 - Closed

1. 16. By means of a direct communication to the ILO dated 19 November 1969, the Workers' Confederation of Peru transmitted a complaint by the Federation of Peruvian Bank Employees.
2. 17. The complaint was communicated to the Government for its observations, which were received in a communication dated 18 March 1970. After examining this case at its meeting in May 1970, the Committee decided to obtain certain additional information from the Government with a view to formulating its conclusions. This information was supplied to the ILO on 1 December 1970.
3. 18. Peru has ratified both the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. A. The complainants' allegations

1. 19. The complainants allege that during the course of the negotiation and settlement of the most recent set of collective claims advanced by the Federation of Peruvian Bank Employees, the Peruvian labour authorities took action affecting collective bargaining and violating the provisions of Convention No. 98.
2. 20. The complainants first of all describe the procedure provided by Peruvian law for the settlement of workers' collective claims for wage increases or improvements in working conditions. There are three principal stages:
   • (a) direct negotiation between workers and employers;
   • (b) in the event of direct negotiations breaking down the claims are discussed before a conciliation board presided over by an official of the labour administration;
   • (c) if both parties agree the claims may be settled by way of arbitration; if not the claims will be settled by the labour administration. Further, a Presidential Decree of 4 July 1966 provides that " claims concerning wage increases and conditions of work may be submitted thirty days before the expiry of the period fixed by agreement or by law for previous wage increases to apply. In such cases, any agreements reached by the parties shall come into force upon the expiry of the current agreements ".
3. 21. The complainants state that, in the present case, it was on the basis of this latter enactment that, on 20 May 1969, they submitted to the Banks of Peru their file of collective claims, which were to come into force on 1 June of that year since the agreement reached in respect of the previous claims was due to expire on 31 May 1969.
4. 22. The complainants allege, however, that these claims were not dealt with in accordance with the legal provisions governing collective bargaining. Thus at the stage of direct negotiations the banks adopted a totally obstructionist attitude quite incompatible with their obligation to co-operate in finding a settlement by suggesting bases for agreement. Again during the conciliation stage their failure to discuss all the points raised in the claims flew right in the face of a decision of the Administration Division of 23 July 1969 that " the parties must be informed that both during direct negotiation as well as before the Conciliation Board, all points of claims must be discussed; likewise account must be taken of the Presidential Decree of 1954 " (which obliges both parties-especially the employers to co-operate in settling collective claims).
5. 23. The complainants allege, moreover, that in a manner quite incompatible with its professed policy of " supporting and encouraging the principle of collective bargaining as the most suitable means of reconciling the interests of both employers and workers" the labour administration arbitrarily cut short the proceedings of the Conciliation Board on the grounds that it had failed-thereby ensuring that it did fail. Moreover, when, immediately after halting the proceedings of the Conciliation Board, the labour administration pronounced on the claims, it did so by decreeing a general rise of 600 soles a month for a period of eighteen months from 1 July 1969 instead of a period of one year as is customary and as had been agreed with the banks for many years and ratified by administrative provisions-in particular, by Resolution No. 251 RT dated 8 November 1966. This Resolution lays down in clause 8 that " advantages acquired through previous agreements shall remain in force, provided that they are not mentioned in the present claims. Banks which grant greater advantages than those sought, or which grant advantages in settlement of these claims, may neither reduce nor withdraw such advantages ".
6. 24. The complainants further allege that in fixing a period of eighteen months instead of the twelve months provided for under collective agreements and custom, the labour administration has acted in contempt of collective bargaining, of Convention No. 98 and of statutory provisions and its own previous practice in affairs of this nature.
7. 25. The Government in its observations states that the allegations of the complainants are unfounded since the decisions of the Directorate General of Labour on the subject of the collective demands of the Federation of Peruvian Bank Employees were taken in accordance with the substantive and procedural rules governing such demands. According to the Government, collective disputes are the subject of a series of legal provisions (some of which were cited by the complainants in the second part of their allegations), which the labour administration has strictly observed. More particularly, Presidential Decrees of 30 May 1939 and 11 January 1942 provide that when conciliation proceedings are under way as a result of a collective dispute or any other dispute affecting the interests of the workers, the two sides shall abstain from taking any action detrimental to the interests of the other and from illegal activities such as lockouts, go-slows, strikes and collective stoppages of work whatever their purpose. The bank employees failed to observe these regulations and repeatedly interrupted their labours; a fact which, as is public knowledge, affected the normal functioning of the banking system in the country. As a consequence the labour administration was legally obliged under the Presidential Decree of 23 March 1936 to declare that the Conciliation Board had failed. The Government goes on to state that by virtue of this Decree the Peruvian labour administration has the power to declare that conciliation has failed whenever the dispute is of such a nature or has arisen in such a manner as to render it impossible.
8. 26. As regards the allegation that the labour administration was at fault in fixing the new wage scale for eighteen instead of the usual twelve months, the Government states that the increase of 600 soles a month amounted to an increase of some 11.2 per cent over the previous rate, whereas the increase in the cost-of-living index during the preceding year had been only 3.8 per cent. In view of the magnitude of the increase it was felt to be only reasonable and equitable that it should be binding over a longer period than the normal twelve months. In adopting this procedure, the Peruvian labour administration was acting quite correctly since the refusal of the parties to go to arbitration and their submission of the matter to the decision of the labour administration entail binding acceptance of its recommendations as is provided in Presidential Resolution No. 2 DS of 17 September 1957. The intervention of the Peruvian labour administration in the affair, which constitutes the subject-matter of the present complaint, was therefore in strict accordance with the legal provisions governing the consideration and settlement of collective disputes in Peru (inter alia, the provisions of ILO Convention No. 98 which forms part of the Law of the Republic). Moreover, its decisions were taken in pursuance of powers granted under Presidential Decree No. 36 DT of 31 August 1957.
9. 27. The Committee notes that the Government makes no reply to the allegations concerning the attitude adopted by the employers in the course of the proceedings. With regard to the termination of the conciliation proceedings the Government refers to national legislation which provides that during the course of these proceedings both parties shall refrain from taking action detrimental to the interests of the other party; and states that, in the present case, the workers by repeatedly stopping work acted in breach of this legislation. The Government further makes reference to certain provisions of national legislation which empower the Peruvian labour administration to declare that conciliation has broken down whenever the dispute is of such a nature or has arisen in such a manner as to render it impossible. The Government states that it was because of the stoppages of work that the labour administration terminated the conciliation proceedings. As regards the decision of the labour administration to give a general wage increase of 600 soles a month for a period six months longer than the period agreed in previous collective agreements, the Government states that this measure was justified by the fact that it was a particularly large increase compared with the rise in the cost-of-living index over the past year.
10. 28. Regarding the allegations concerning the attitude adopted by the employers during the direct negotiation and conciliation stages the Committee observes that Peruvian legislation provides that employers shall co-operate in finding a settlement to a set of collective claims put forward by the workers and shall discuss all points raised therein.
11. 29. The Committee asked the Government for additional information showing whether restrictions on strikes during the course of conciliation continue to be applied after the labour authority has given its decision in the case of a collective dispute. In its reply the Government states that the right to strike is not restricted; nevertheless, it also mentions that measures adopted by the labour authority during the course of the proceedings relating to collective claims in order to prevent attitudes prejudicial to the interests of the other party are kept in operation subsequently only in cases where the workers' side prolongs the dispute notwithstanding the settlement of the matter by the authority, in lieu of the arbitrator. It would therefore appear that the workers may not strike in support of their claims once the labour authority has adopted a decision regarding the questions at issue.
12. 30. This conclusion is also suggested by Decree No. 009 of 1963 concerning the settlement of labour disputes, which the Committee has examined and under which, following the breakdown of direct negotiation and conciliation, the dispute, if the parties do not consent to submit it to arbitration, has to be settled by the labour authorities specified therein.
13. 31. From this it appears that under the law, the claims advanced by the Federation of Peruvian Bank Employees had to be settled by binding decision of the labour authority after the breakdown of conciliation and the refusal to go to voluntary arbitration. This means that the Federation was not entitled to declare a strike during the conciliation proceedings and, as seen above, that it was not entitled either to have recourse to a strike after the authority had reached its decision on the claims advanced.

B. B. The Committee's conclusions

1. 32. The Committee has always applied the principle that questions relating to the right to strike are not outside its competence in so far as they affect the exercise of trade union rights. In doing so it has pointed out that the right of workers and their organisations to strike as a legitimate means of defending their occupational interests is generally recognised.
2. 33. With regard to the decision of the labour authority to declare the conciliation proceedings concluded owing to the stoppage of work during those proceedings, the Committee recalls that it has in many cases in the past observed that, although the right of workers and their organisations to strike as a legitimate means of defending their occupational interests is generally recognised, this right may be subject to temporary restrictions, such as the suspension of strikes during conciliation and arbitration proceedings in which the parties can take part at every stage. In doing so, the Committee has stressed that when restrictions of this kind are placed on the exercise of the right to strike, the ensuing conciliation and arbitration proceedings should be adequate, impartial and speedy.
3. 34. With regard to the binding settlement of disputes by decision or arbitration given by the labour authority, the Committee recalls that although it has stated in previous cases that, where strikes are prohibited or are subject to restrictions, the workers should enjoy adequate, impartial and speedy conciliation and arbitrary procedures in order to protect their interests, it has also pointed out that such principles do not apply to the absolute prohibition of the right to strike but to the restriction of that right in the essential services or in the civil service, in which case adequate guarantees should be provided to safeguard the interests of the workers.
4. 35. The Committee observes that in Peru binding arbitration on the part of the labour authority if a dispute is not settled by other means is part of the general procedure applicable to collective disputes. The Committee believes that this system may result in a considerable restriction of the right of workers' organisations to organise their activities and may indirectly entail an absolute prohibition of strikes, contrary to the principles generally recognised in regard to freedom of association.
5. 36. The Committee notes the Government's declaration that there are no measures restricting the right to strike but it also observes that there are legal provisions which would appear to result in voiding the lawful exercise of this right.

The Committee's recommendations

1. 37. In these circumstances, the Committee recommends the Governing Body:
   • (a) to point out to the Government that the system for the settlement of collective disputes as laid down by law may result in a considerable restriction of the right of workers' organisations to organise their activities and indirectly impose an absolute prohibition of strikes, contrary to the principles generally recognised in regard to freedom of association;
   • (b) to restate the principle that the right to strike may be subject to temporary restriction such as the suspension of strikes during conciliation and arbitrary proceedings, which should be adequate, impartial and speedy and allow either party to act at every stage;
   • (c) to draw the Government's attention to the desirability of re-examining the legislation with a view to clarifying the legal situation in this regard in the light of the above considerations, keeping the Committee of Experts on the Application of Conventions and Recommendations duly informed.