Report in which the committee requests to be kept informed of development - Report No 334, June 2004

Case No 2266 (Lithuania) - Complaint date: 14-MAY-03 - Closed

Allegations: The complainants allege that the authorities interfered in trade union activities by intervening in the distribution of trade union property acquired under the former unitary system; more specifically, they contend that the General Prosecutor’s Office filed an application on behalf of certain complainants to challenge trade union ownership of trade union property and stop its impending sale

1. 600. The Lithuanian Trade Unions Confederation filed a complaint of violations of freedom of association against the Government of Lithuania in a communication dated 14 May 2003.
2. 601. The Government provided its observations in communications dated 12 August 2003 and 14 January 2004.
3. 602. Lithuania has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87).

A. The complainant’s allegations

1. 603. In its communication of 14 May 2003, the complainant organization states that after the country regained independence, the Supreme Soviet of the Republic of Lithuania officially recognized that former trade unions were not representing workers but were part of the existing political system, that the property acquired by these organizations belonged to all Lithuanian people, and that some part of it should be distributed to the most representative trade unions (resolution of 30 July 1990).
2. 604. That property was identified in the Law of 25 May 1993 on Former Governmental Trade Unions Property, and in the resolution of 1 June 1993 of the Seimas of the Republic of Lithuania implementing the said Law. Article 3(2) of that Law also provided for the establishment of the Special Fund, whose objective was to support existing and emerging trade unions by listing, taking over and distributing trade union property. The Special Fund was to be managed by a Board composed of the most representative trade unions.
3. 605. Article 3 of the Seimas decision of 1 June 1993 lists the assets (mostly buildings) to be transferred to the Special Fund, for later allocation. Article 5 of the Law of 25 May 1993 provides in addition that the: "Transfer and use of Lithuanian convalescence homes and resorts will be established by a separate law." That Law, adopted in 1994, provided that administrative buildings would be transferred to the most representative trade unions according to membership; however, the problem of distribution of convalescence homes and resorts (which represent a considerable amount of real estate) persisted.
4. 606. According to the complainant, there was no just way to distribute this real estate, and consultations were held between the Government and the most representative trade unions. The trade unions eventually concluded an agreement concerning the distribution. Parliament adopted on 20 July 2000 a law on trade unions property distribution. That law provided for the allocation of property between the workers’ organizations at various levels, and for the creation of the Trade Unions Support Fund, whose founders were a number of workers’ organizations (including the complainant, after amalgamation). The Trade Unions Support Fund was established within the delay provided for in the law, and the four national trade union centres agreed to sell the relevant property and to transfer the proceeds to the Trade Unions Support Fund. One of the founders, the Lithuanian Workers’ Union (later renamed "Solidarity"), broke the agreement at the end of 2002 and applied to the courts in order to stop the sale of that trade union property.
5. 607. The General Prosecutor’s Office, on behalf of the trade union centres, asked the court to adjudicate on the ownership of the convalescence homes and resorts, and to cancel the decision registering the assets as property of the Special Fund. If this request is upheld, this would mean that the property would be transferred to the State. Complaints on the same grounds were filed with the Vilnius and Klaipeda county courts, which stopped the sale of convalescence homes. The property in question is creating a loss of about €10,000 a month, due to real estate taxes, which damages trade union interests.
6. 608. The complainant submits that, through its actions, the General Prosecutor Office is interfering in the organization of trade union activities and impede the lawful exercise of former trade unions’ property distribution on the basis of the agreement between trade union centres, thereby violating Article 3 of Convention No. 87, since it imposes the will of the authorities on trade unions and exerts pressure through the judicial system. The complainant requests that the Government be ordered to stop without delay the interference of the General Prosecutor Office in trade union organizational activities.

B. The Government’s replies

1. 609. In its communication of 12 August 2003, the Government states that the Constitution and the law on prosecution make it a duty for the General Prosecutor to defend public interest, and the rights of persons and society, under the rule of law.
2. 610. In March 2002, the President of the Lithuanian Solidarity Trade Union had written to various officials (including the President of the Republic, the Chairman of Parliament, the General Prosecutor, the State Ombudsman and the media) asking to stop the selling of trade union property, to avoid that irreparable harm be done to trade union members. The General Prosecutor’s Office received about 20 similar letters from local branches of Solidarity. The Parliamentary Commission on Anti-corruption also sent a message (on the legitimacy of the actions of the Special Fund) to the General Prosecutor’s Office, whose officials were obliged by law to carry out an investigation; to that end, they had to define the status of the assets to be given to trade unions.
3. 611. Resolution No. I-437, passed by the Supreme Soviet on 30 July 1990, stated that "... former trade unions were governmental and not public organizations; therefore, the property acquired in the name of trade unions with accumulated funds and state subsidies belongs to all people of Lithuania". This resolution also authorized the Government to make an inventory of the property owned by former trade unions. Accordingly, all that property was taken over by the State; only the Government was competent to decide on its legal status and to dispose of it. The Seimas resolution No. I-166 of 1 June 1993 defined which property would be recognized as being transferred to the Fund. Law No. I-160 of 25 May 1993 decided that the transfer and operation of health rehabilitation institutions and rest homes would be regulated by a separate statute (Law No. I-934 of 8 June 1995) which stipulated that some rehabilitation institutions were recognized as the ownership of Lithuanian trade unions. Analysis of the legislation leads to the conclusion that the Fund did not become the owner in full of the property, as it was restricted by law to perform temporary functions in distributing and transferring the property to trade unions; in spite of this, certain branches (Klaipeda and Alytus) of former state entities registered some of these assets as being the property of the Fund. The investigation also revealed that the Board of the Fund had breached other legislation regulating its activities: some decisions were adopted unlawfully, e.g. deciding to sell assets that were to be transferred to trade unions, without following the legally approved procedure. All these acts breached constitutional principles and the property rights of trade unions and their members, and also amounted to violations of public interest.
4. 612. Being in possession, upon investigation, of sufficient grounds to believe that the Board of the Fund had violated the legislation regulating its duties in managing the former trade unions property, and seeking to defend the interests of trade unions and their members, the General Prosecutor brought two civil lawsuits in the Vilnius and Klaipeda courts, in order to invalidate the registration of health rehabilitation and rest homes as property owned by the Fund.
5. 613. In its communication of 14 January 2004, the Government indicates that on 26 August 2003, the district court of Klaipeda closed the civil case concerning the request for cancellation of the registration of the Fund’s title, a decision which was confirmed by the Court of Appeal on 23 October 2003. Regarding the lawsuits filed in the Vilnius court, the court upheld the public prosecutor’s claim on 16 December 2003 and invalidated the registration of the Fund’s title in the disputed objects. The Government adds that the Constitutional Court ruled on 30 September 2002, that the law providing for the right of ownership of sanatoria and rest homes (under which these establishments were assigned to trade unions and transferred to the Fund) was unconstitutional. The Court also ruled that the powers of the Fund expired as of 1 July 2001.
6. 614. The complainant’s allegations that "there could be no just way to distribute this estate", that "the ownership of the property would be transferred to the State" and that the General Prosecutor "seeks to distribute former trade union property without taking into account the trade unions opinion" are an attempt to mislead the institutions investigating disputes on the property of trade unions, and the Committee on Freedom of Association. The lawsuits were instituted not for the purpose of distributing the property to certain trade unions as alleged in the complaint, but rather to restore justice and invalidate some unlawful decisions of the Board of the Fund concerning the disposition of trade union assets.
7. 615. The complainant’s allegations that "the property seized creates monthly losses of €10,000 and that the General Prosecutor’s actions are damaging trade unions interests" are also false. In fact, the Board of the Fund, being aware of the investigation led by the General Prosecutor’s Office on its activities, hastily decided, without proper planning, to sell the property that was to be given to trade unions. It made a contract with a real estate firm, which concluded 12 sale transactions on 28 October 2002; within a month, that private firm resold the major part of that real estate property for a much higher price to third parties, without being accountable to the Fund. These transactions had been made possible in part because of the delay in deciding to initiate lawsuits, with the result that the judicial order attempting to block the sale was issued only after that property had already been sold. This is why the Vilnius and Klapeida courts had decided to apply temporary protective measures immediately upon receiving the next lawsuits.
8. 616. The lawsuits filed by the General Prosecutor are in no way related to violations or unlawful restrictions of freedoms and rights provided for in Article 3 of Convention No. 87, as alleged by the complainant. Quite the contrary, these actions aim at protecting the interests of trade unions, as well as those of the Lithuanian Trade Unions Confederation. These lawsuits were filed against the Special Fund, an ad hoc body established by Parliament to administer the property of former trade unions before transferring its ownership to existing and emerging trade unions. The activities of the Fund are regulated by legislation, not by trade union arrangements. The monitoring of the Fund’s activities was delegated by Parliament to the State Control Authority which found, upon investigation, that the Fund and its Board had committed a series of serious breaches in disposing of trade unions property. The Government concludes that the complaint is wholly unfounded and should be rejected.

C. The Committee’s conclusions

1. 617. The Committee notes that this complaint concerns allegations of the Government’s interference in the organizational activities of trade unions, more specifically the distribution of trade union assets in the context of a transition from a trade union monopoly regime to a situation of trade union pluralism. According to the complainant, the actions of the General Prosecutor’s Office violated Article 3 of Convention No. 87.
2. 618. The Committee notes that when the country regained independence, the authorities acknowledged that the property acquired by trade unions under the monopoly regime belonged to all the people of Lithuania, and proceeded to establish a transitional system whereby these trade union assets would be inventoried, kept under control in a containment legal structure, and managed so that they could be later distributed to existing and emerging trade unions. The Government entrusted these tasks to a Special Fund which, in the Committee’s view, was essentially a temporary caretaker; based on the legislation and implementing resolutions annexed to the complaint, it appears to the Committee that the Fund never acquired ownership of the assets. Be that as it may, it is not within the Committee’s competence to decide whether or not the registration of some assets in the name of the Fund was lawfully obtained, nor to decide on the fate or allocation of said assets; this task belongs to Lithuanian judicial institutions.
3. 619. Regarding more specifically the alleged violation of Article 3 of Convention No. 87, the Committee notes at the outset that the acts complained of by the Lithuanian Trade Unions Confederation, i.e. the lawsuits filed by the General Prosecutor, were neither directed towards the complainant nor other workers’ organizations. Rather, acting on information gathered during an investigation by the official body in charge of government audits, the General Prosecutor’s Office applied to the courts, on behalf of all trade unions and workers, so that an independent judicial body could examine whether the actions of the Fund’s Board were in the larger interest of all trade unions and workers. In that context, the Fund was not a "workers’ organization" within the meaning of Article 3 of Convention No. 87, which has therefore no relevance here.
4. 620. The Committee also notes that the information collected from the Government during the investigation on the quick-flip sale of 12 buildings at a much higher price within one month gave reasonable grounds to the General Prosecutor’s Office to file conservatory lawsuits, before further negative consequences could ensue for the wider interests of all trade unions and workers. The Committee noted that the authorities took action in establishing the inventory and distribution scheme, arguing that the interests of trade unions and workers were at stake.
5. 621. In addition, the Committee notes that there obviously exist serious differences of opinion between the various workers’ organizations about the decisions made by the Fund in the administration and disposal of trade union assets. The Committee therefore requests the Government to hold further discussions with all interested parties with a view to finding a satisfactory solution to all concerned, and to keep it informed of developments in this respect.

The Committee's recommendations

1. 622. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • The Committee requests the Government to hold further discussions with all interested parties with a view to finding a satisfactory solution for all concerned, and to keep it informed of developments in this respect.