Effect given to the recommendations of the committee and the Governing Body - Report No 343, November 2006

Case No 2375 (Peru) - Complaint date: 30-JUL-04 - Closed

Effect given to the recommendations of the Committee and the Governing Body

1. 172. In its previous examination of the case in November 2005, the Committee, in the absence of any observations from the Government, made the following recommendations [see 338th Report, para. 1228]:
2. (a) the Committee requests the Government to take the necessary steps to amend article 45 of Decree-Act No. 25593 and article 46 of Act No. 27912 to bring them into conformity with international labour standards and the principles of the ILO with regard to the level of collective bargaining;
3. (b) the Committee requests the Government to invite the most representative workers’ and employers’ organizations to establish a mechanism to resolve conflicts relating to the level at which collective bargaining should take place.
4. 173. In this regard, it should be recalled that in its conclusions, in its previous examination of the case, the Committee noted that Decree-Act No. 25593, relating to collective labour relations, dated 26 June 1992, lays down, in article 45, that “If there is no previously existing collective agreement at any level of those indicated in the previous article, the parties shall decide, by common accord, the level at which they shall enter into the first agreement. Failing accord, collective bargaining shall take place at the enterprise level.” “Should there be an agreement existing at any level, to enter into another at a different level, with substitutory or complementary character, the agreement of the parties is a prerequisite and this may not be established through administrative act or arbitrator’s ruling. [...].” Article 46 of Act No. 27912, which entered into force on 9 January 2003, provides that “should there be an existing level of collective bargaining in a specific branch of activity, this shall remain in force” [see 338th Report, para. 1223].
5. 174. The Committee also noted, in its previous examination, the statement in the preamble to the ruling of the Constitutional Court of 26 March 2003, which highlights the State’s obligation to promote collective bargaining by virtue of article 28 of the Constitution and Article 4 of ILO Convention No. 98:
6. [...] labour organization for workers in the civil construction sector is very different from other sectors, highlighting: (a) contingency, as the labour relation is not permanent and lasts for the period of the labour for which the workers have been contracted or for the duration of the work; and (b) relative location, as there is no fixed and permanent place where construction work is carried out.
7. As a result, during his labour activity, the civil construction worker provides services for a number of different employers, rendering the possibility that he/she can rely on a trade union organization at the enterprise level unclear, and therefore practically non-viable that he/she can bargain several times a year. As a result of this, given the particular situation of the civil construction sector and in order to prevent collective bargaining from becoming inoperable, it is reasonable and justified that the State intervene, establishing measures that favour effective bargaining. Therefore, they shall remove from our regulations those measures that are incompatible with an effective promotion of collective bargaining in the civil construction sector, and, should that be the case, issue regulations that, without disregarding that the level of bargaining should be fixed by mutual accord, establish as the level of bargaining that of the branch of activity when this cannot be reached by said accord.
8. For this reason, the different reasoning that the State uses in this case does not constitute, in itself, any influence on the right to equality, or the right to collective bargaining, as it is based on reasonable and objective criteria. [...]
9. [See 338th Report, para. 1223.]
10. 175. In its communications of 2 November 2005 and 1 June and 29 September 2006, the Government states that there have been no objections voiced by the ILO to article 45 of the Collective Labour Relations Act, and casts doubt on certain claims made by the complainant organizations of employers, providing a detailed account of the development of branch-level collective bargaining in the construction sector since 1962 (with particular emphasis on the era of the dictatorship in the 1990s and its negative effect on trade union membership and collective bargaining) and the various legislation and standards applied in this regard, and pointing out that the negotiating parties (the Civil Construction Federation of Peru and the Peruvian Chamber of Construction) have been engaged in collective bargaining at the branch level since 2001; in 2005, a collective agreement for 2005-06 was concluded without any apparent hesitation or objection on the part of the employer party. The Government refers to a ruling by the judicial authority concerning collective bargaining in the construction sector, which states that the level of negotiation cannot by established by an administrative decision. Nevertheless, the Constitutional Court has expressed the opinion that the principle of equality is not being violated, since the particular nature of the construction sector means that it is “reasonable and justified” for the State to intervene and establish measures to encourage effective bargaining.
11. 176. The Government underlines the following points:
12. – since 1992, the provisions of national legislation with regard to collective bargaining have been gradually adjusted in order to ensure that they correspond with the relevant international conventions;
13. – the ILO has not raised any objections to the provisions of article 45 of the Collective Labour Relations Act (despite the fact that it has been examined in a number of cases brought before the Committee on Freedom of Association), nor has it considered that the third transitional provision of the Act represents an infringement of the abovementioned article, since it states that all current collective bargaining must be concluded at the level on which it is taking place, and that, in the absence of agreement, it is to be understood that collective bargaining shall be conducted at the enterprise level;
14. – the differences between the positions held by CAPECO and the State, which have been successfully reconciled by the judicial authority, are as follows:
15. (a) in the case of the civil construction sector, there is no so-called new collective bargaining taking place. Since 1965, this sector has had a tradition, for various well-established reasons accepted by the parties (custom), of branch-level bargaining, such that article 45, paragraph 1, of the Collective Labour Relations Act does not apply;
16. (b) activities performed within the civil construction sector do not equate to ordinary work, owing to the particular characteristics of this sector, as set out in the ruling by the Constitutional Court, concerning the duration of the employment relationship (temporary), the conditions under which it is pursued and the dispersal of the workforce, all of which mean that it is to be expected that branch-level collective bargaining should take place in this productive sector. Lower-level negotiation is not possible and when it does (occasionally) arise, it is not undertaken under balanced circumstances;
17. (c) Ministerial Resolutions Nos. 053-93-TR and 051-96-TR, issued as national legislation, are defective in normative terms, since both administrative decisions dictate the level of negotiation applicable to the civil construction sector;
18. (d) article 45, paragraph 2, of the Collective Labour Relations Act (the section to which the employers object) does not violate any ILO standard – and has received no objections – since it does not dictate the level at which negotiation must be pursued by the parties, but rather sets out a potential solution (drawing on precedent or previous actions by the parties) to failure by the parties to reach an agreement, on the basis of an acknowledged source of law in labour legislation: custom. In the absence of an agreement, negotiation will continue to take place within the same context as was previously the case. Employers have tended not to object to this aspect, which entails negotiation being taken to the enterprise level in the event of new collective bargaining;
19. (e) in view of the above, no violation of the principle of bargaining freedom enshrined in Convention No. 98, Article 4, is considered to be taking place, since the promotion of collective bargaining, which falls to the State, is provided for in article 45, paragraph 2, of the Collective Labour Relations Act, as applied by the national judiciary;
20. (f) the administrative ruling to the effect that collective bargaining within the civil construction sector should be continued is consistent with provisions whose overall goal is to promote collective bargaining and prevent it from becoming ineffective. Thus, any provisions or allowances whereby a refusal by one of the parties entails an obligation for negotiation to take place at the enterprise level constitute a total violation of the principles enshrined in both Convention No. 87 and Convention No. 98;
21. (g) in the event that the position being put forward by the complainant employers’ organization were to be accepted, in spite of the longstanding national tradition of branch-level bargaining, workers in the Peruvian civil construction sector would be required to obtain agreement from employers on the level of negotiations for every proposed negotiation, and in the absence of such agreement from the business sector, collective bargaining could not take place. Given the above, it is clear that this solution does nothing to encourage, and much less promote, the exercise of the right to collective bargaining enshrined in ILO Convention No. 98;
22. (h) article 45, paragraph 2, of Decree-Act No. 25593 makes reference to prior negotiation and good faith in the course of bargaining, which we understand to entail obligatory observance of the level at which negotiations have historically taken place, but also a requirement for good faith and a willingness to at least engage in dialogue and initiate bargaining at that level, without the need for a decision or resolution to be imposed from beyond the sphere of the economic dispute. The fact that an employers’ organization is declining to engage in dialogue or negotiations at the branch level, or indeed at any proposed level, does not appear to be consistent with the principle of good faith in negotiations, particularly bearing in mind that collective bargaining at an enterprise or site level is not substantively possible, with unilateral regulation by the employer the most usual outcome.
23. 177. Lastly, the Government requests the Committee to consider three key points:
24. – there is a need to differentiate the specific case of bargaining within the civil construction sector, resolved by the Constitutional Court through a ruling resulting in the re-entry into force of the agreement on branch-level collective bargaining, which had been affected by the application of the third final and transitional provision of Decree-Act No. 25593. In strict terms, if a historical agreement of a permanent nature exists with respect to level of negotiation, article 46 of Decree-Act No. 25593 does not have any specific effect, provided that the permanent status results from the agreement and is not the result of state regulation;
25. – the item concerning article 46 of Decree-Act No. 25593 does not refer to the question of collective bargaining in the civil construction sector, since this sector contains an agreement on the determination of the level of negotiation, which is once again in force following a ruling by the Constitutional Court with the status of res judicata. An examination of article 46, bearing in mind that this is a general regulation, gives an appreciation of the condition of trade union membership in Peru and of the power imbalances in the labour market, which give rise to unfair remuneration and working conditions. This situation has led the Peruvian State to put in place measures to promote the right to collective bargaining, one of which is supra-enterprise collective bargaining, involving a less symmetrical relationship between employers’ and workers’ organizations than at the enterprise level. Legislation takes the form of affirmative action (positive assurance) to encourage supra-enterprise bargaining in a “post-traumatic” social context in which the weakness of existing trade unions means that collective bargaining requires a coherent setting if it is to be conducted effectively (in real and tangible terms). The above does not prevent the parties from proposing other levels; Decree-Act No 25593 even provides for the possibility of parallel negotiations at various levels, enabling these to be linked;
26. – assessing the appropriate level at which collective bargaining is to be carried out is a form of positive assurance on the part of the State. Each party’s right to bargain is promoted, with due respect for content, since either party may opt not to negotiate or arrive at an agreement, with the collective dispute thus remaining open. The special ability to promote a level of negotiation derives from the fact that the legally regulated collective bargaining procedure involves stages, with intervention by the Administrative Labour Authority to facilitate the transmission of lists of demands, the drafting of economic reports, mediation, conciliation, etc. As can be seen, the State plays a collaborative role at every stage, whilst the autonomy of the parties is guaranteed;
27. – in this particular case, branch-level collective bargaining was a result of historical negotiations which took place between the parties.
28. 178. Lastly, the Government, to sum up, quotes a conclusion by the CEACR, given in paragraph 236 of its General Survey of 1994, in which it warns against the tendency to give precedence to individual rights over collective rights in employment matters and against structural change being used to undermine the trade unions if the necessary measures are not taken by the authorities to prevent this.
29. 179. The Government encloses a lengthy report from the Federation of Civil Construction Workers of Peru, dated 25 April 2006, which covers all the main points of the complaint. The Federation, which in essence draws on the arguments and information given by the Government and the Constitutional Court, is of the opinion that the current system does not run counter to the spirit of Convention No. 98, and is opposed to the position adopted by the complainant organizations in Case No. 2375, who wish to see a return to enterprise-level bargaining. The Government adds that industry-level bargaining has an historical precedent and is the only viable means of giving effect to the right to collective bargaining in the construction sector.
30. 180. The Committee notes the comprehensive reply by the Government that contains information on the special characteristics of the industrial relations system and collective bargaining in the construction sector and the comments made by the Federation of Civil Construction Workers of Peru annexed to the Government’s reply. Whilst the Committee did indeed examine the case in November 2005, having received no reply from the Government and after having made an urgent appeal for it to send such a reply, the Committee emphasizes that the complainant organizations (OIE, CONFIET and CAPECO) transmitted a copy of the Constitutional Court ruling on this matter, and that the Government (in its reply) and the abovementioned federation draw arguments from that ruling.
31. 181. The Committee notes the arguments in respect of the conclusions reached in the previous examination of the case put forward by the Government, as well as the comments of the Federation of Civil Construction Workers of Peru and the decision of the Constitutional Court in favour of branch-level collective bargaining within the construction sector. The Committee wishes to make quite clear that in its previous conclusions, it had not adopted a stance either in favour of bargaining at the level of the branch of activity (which has been taking place for many years) or at the enterprise level. The fundamental principle mentioned by the Committee concerns the need for the level of collective bargaining to be freely determined by the parties concerned. In this regard, the Committee notes that in applying national legislation and invoking ILO Convention No. 98, the Constitutional Court has ruled that all collective bargaining within the construction sector should take place at the branch level, thereby overriding the principles of freedom of the parties and free and voluntary bargaining, both of which cannot be dissociated from the right to collective bargaining as enshrined in Convention No. 98. The Committee was of the opinion that in the event of disagreement between the parties concerning the level of negotiations, and in place of a general ruling by the judicial authority in favour of branch-level bargaining, it would be more in keeping with the letter and spirit of Convention No. 98 and Recommendation No. 163 for a system to be established by the parties by common agreement in which their interests and points of view can be specifically expressed. Bearing the above in mind and noting the Government’s declaration that it is legally possible for links between collective bargaining at the branch and enterprise level to be established, the Committee reiterates the conclusions and recommendations made at its meeting in November 2005 and requests the Government to invite the most representative workers’ and employers’ organizations to establish a system of settling disputes regarding the level at which collective bargaining is to take place (for example, a body with independent membership, which has the confidence of the parties) and to take steps to amend article 45 of Decree-Act No. 25593 and article 46 of Act No. 27912, which regulate the question of the level of collective bargaining.