Report in which the committee requests to be kept informed of development - Report No 350, June 2008

Case No 2584 (Burundi) - Complaint date: 28-JUN-07 - Closed

Allegations: The complainant alleges violations of the right to collective bargaining on the grounds that the Government decided to close down operations at the Bujumbura Textile Complex and lay off its workers without consulting staff representatives, in violation of the regulations and the national interoccupational collective labour agreement. Furthermore, notice periods and severance benefits were calculated in violation of Convention No. 98

1. 274. The complaint is contained in a communication from the Confederation of Trade Unions of Burundi (COSYBU) dated 28 June 2007.
2. 275. The Government sent its observations in a communication dated 9 November 2007.
3. 276. Burundi has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), Right to Organise and Collective Bargaining Convention, 1949 (No. 98), and the Workers’ Representatives Convention, 1971 (No. 135).

A. The complainant’s allegations

1. 277. In a communication dated 28 June 2007, the Confederation of Trade Unions of Burundi explains that the Bujumbura Textile Complex (COTEBU) is a public enterprise governed by the Code of Private and Public Enterprises. According to the complainant, the staff of COTEBU, estimated at 1,700 workers, was temporarily laid off following a decision by the Council of Ministers on 20 July 2006 to close down operations. Subsequently, the Council of Ministers unilaterally decided to terminate the employment of the staff of COTEBU without notice or severance pay. The complainant claims that the Government interfered in the management of an enterprise that should enjoy administrative autonomy.
2. 278. According to the complainant organization, these decisions by the Government violate several regulations and agreements. COSYBU refers to section 8 of Decree No. 100/159 of 5 September 1997 on “Bringing the memorandum of association of the Bujumbura Textile Complex ‘COTEBU-SP’ into line with the Code of Private and Public Enterprises”, under which “the Executive Body has sole responsibility for determining, in accordance with the corporate objectives, the scope of activity of the Complex and for taking all decisions required for its operation”. COSYBU also refers to section 24.2 of the interoccupational collective labour agreement of 3 April 1980, which provides that “an employer who intends to lay off several members of staff for economic reasons, such as reduced activity, must take particular account of the age, professional qualifications, seniority and family responsibilities of the worker concerned. Before taking such a decision, the employer must give advance written notice to the representatives of the workers of the establishment and consider their opinions and suggestions with regard to appropriate measures to take […]”.
3. 279. The complainant organization alleges that the Government’s decisions were taken without prior consultation with the COTEBU staff representatives, who only found out what was happening through the media.
4. 280. The complainant organization indicates that the staff of COTEBU had called for the negotiation of a collective agreement to determine the period of notice and the amount of severance pay, as required under sections 52 and 60 of the Labour Code. The Government had then asked the management of COTEBU to negotiate the collective agreement with representatives of the Free Trade Union of Workers of COTEBU (SYTRACO), an organization affiliated with COSYBU. In disagreement with the management of COTEBU, which wanted to adhere to the minimum entitlements provided for in the Labour Code, SYTRACO had asked the Government to set up a governmental committee to negotiate the collective agreement. This committee, composed of five representatives of the Government, was established by Letter No. 121/VP2/782/2007 of 27 April 2007 of the Chief of Staff of the Second VicePresident of the Republic.
5. 281. The complainant organization indicates that, according to the COTEBU staff representatives, the Government refused to negotiate the collective agreement following a statement by the chair of the governmental committee that the committee’s role was limited to mediation between COTEBU management and staff representatives. According to the complainant, the Government’s position in this regard undermines Article 4 of Convention No. 98.
6. 282. The complainant organization attached to its complaint a copy of Decree No. 100/159 of 5 September 1997 on “Bringing the memorandum of association of the Bujumbura Textile Complex ‘COTEBU-SP’ into line with the Code of Private and Public Enterprises” and a copy of a communication dated 19 June 2007 from COSYBU to the President of the Republic regarding the situation of the laid off COTEBU staff.

B. The Government’s reply

1. 283. In a communication dated 9 November 2007, the Government rejects the complainant’s allegations regarding the violation of Convention No. 98 and the national regulations governing collective bargaining. The Government denies that it prevented the COTEBU staff representatives from enjoying the right to organize and collective bargaining. Its position is supported by the fact that COSYBU took no domestic legal action in this regard.
2. 284. The Government explains that COTEBU had not made any payments since 2006 and had accumulated a debt of more than 10 billion Burundian francs. Under these circumstances, the intervention of the Government – the sole holder of equity interests in the enterprise – was legitimate. The Government points out that it is the prerogative of the holder of equity interests in an enterprise to lay off staff and to close down an enterprise, in strict compliance with the laws and regulations in force.
3. 285. The Government points out that the COTEBU management and staff representatives have always negotiated, even though such negotiations have not always led to an agreement. Nevertheless, the Government is surprised at the interest in engaging in a negotiation on notice and severance pay when the employer has already demonstrated its willingness to pay in full the compensation owed in accordance with the relevant laws and regulations. The Government adds that the closure of an enterprise is not the right time to negotiate a collective agreement and expresses its surprise that union leaders are refusing to allow workers to receive their final settlement outside the negotiation of a collective agreement.
4. 286. The Government adds that it has provided supporting documentation to demonstrate that negotiations were held with regard to the COTEBU industrial dispute and that the staff representatives were therefore well informed of the imminent closure of the enterprise. The Government attached to its response to the allegations copies of:
   • – the communication dated 29 January 2007 from the Free Trade Union of Workers of COTEBU (SYTRACO) to the Minister of Trade and Industry regarding the claims of COTEBU staff after workers were temporarily laid off;
   • – the minutes of the meeting of the committee set up to propose solutions to the Government in response to the end of the period of temporary layoff of COTEBU staff (22 February 2007);
   • – the letter from the Minister of Public Service, Labour and Social Welfare to the Second Vice-President of the Republic, providing information about the representatives of the Ministry in the negotiations scheduled between the management of COTEBU and the staff representatives (23 March 2007); and
   • – the minutes of the meeting of 26 March 2007 between the management of COTEBU and the staff representatives of the enterprise.

C. The Committee’s conclusions

1. 287. The Committee observes that, in this case, the complainant’s allegations relate to the Government’s refusal to engage in collective bargaining with the trade union of an enterprise that it decided to close down. According to the complainant, this refusal to negotiate the terms under which workers are laid off and compensated violates not only Convention No. 98, but also national laws and regulations in this regard.
2. 288. The Committee notes that the Council of Ministers decided on 20 July 2006 to close down the operations of COTEBU, a public enterprise governed by the Code of Private and Public Enterprises under Decree No. 100/159 of 5 September 1997. The Committee notes that, under section 8 of that decree, the Executive Body of COTEBU is responsible for determining the scope of activity of the Complex and for taking all decisions required for its operation. The Executive Body is composed of three representatives of the Government, including the general manager of the Complex; one member who is selected for his/her specific skills and experience; two representatives of consumers; and one staff representative (section 6 of the Decree). In this regard, the Committee can only regret that the decision to close down the operations of COTEBU, which has an impact on the working and living conditions of a significant number of workers, was not subject to prior discussion or decision by the Executive Body of the enterprise, as required by the memorandum of association. The Committee observes in this case that the decision by the Council of Ministers was not likely to facilitate dialogue, negotiation and dispute settlement in an atmosphere of mutual trust.
3. 289. With regard to the termination of the employment of COTEBU staff in January 2007, which was done, according to the complainant, without prior consultation with the workers’ representatives, who only found out what was happening through the media, the Committee refers to the note outlining the claims of COTEBU staff that was sent by SYTRACO to the Minister of Trade and Industry on 29 January 2007. The Committee draws the following points from this note:
   • – On 20 July 2006, the Council of Ministers decided to lay off the entire staff of COTEBU on a temporary basis, with the exception of certain units that were to handle existing orders.
   • – The period of temporary layoff began on 1 August 2006 and, in accordance with the provisions of the Labour Code, was required to end on 31 January 2007 with the termination of suspended contracts either with notice or compensation in lieu of notice and severance pay. Alternatively, the employer was required to reinstate the workers. The Committee notes that these requirements are laid down in section 56(d) of the Labour Code.
   • – SYTRACO is calling for, among other things, the continuation of the productive activities of COTEBU, the payment of the housing allowances owed to workers since 1 August 2006 and the negotiation of a collective agreement between the management of the enterprise and the union to determine the amount of compensation in lieu of notice and severance pay to be paid to all workers.
4. 290. In addition, the Committee notes the minutes of the meeting held on 20 February 2007 by the committee set up to propose solutions to the Government in response to the end of the period of temporary layoff of COTEBU staff. It is clear from the document that the committee’s proposal was to postpone the granting of minimum entitlements calculated in accordance with the provisions of sections 52 and 60 of the Labour Code and to initiate negotiations between the employer and the staff representatives to reach an agreement on the period of notice and the amount of severance pay. In addition, the committee called for the payment of housing allowances to workers while temporarily laid off.
5. 291. Finally, the Committee notes the minutes of the meeting held on 26 March 2007 between the management of COTEBU and the staff representatives. The aim of this meeting was to agree on the procedure for negotiating a collective agreement on the period of notice and the amount of severance pay for the staff of the enterprise. According to the minutes, agreement was reached on a schedule of negotiations, with a deadline set for 5 April 2007 (item 16).
6. 292. The Committee understands, from the information received, that the Government decided in May 2007 to grant severance pay to the staff of COTEBU in accordance with the minimum entitlements provided for in the Labour Code. According to the complainant, the Government therefore refused to negotiate a collective agreement on this issue (open letter from COSYBU to the President of the Republic, dated 19 June 2007).
7. 293. The Committee takes note of all the supporting information provided by the complainant and the Government. It notes that, following claims by the COTEBU union, a government committee proposed the adoption of measures in response to these claims, which involved in particular deferring the minimum entitlements provided for in the Labour Code, calling for the negotiation of a collective agreement on notice and severance pay and requesting the payment of housing allowances. The Committee notes that agreement was subsequently reached at a meeting between the management of COTEBU and the staff union on the procedure for negotiating the collective agreement and on a timetable for the negotiations. The Committee notes that neither the complainant nor the Government provided information on the substance of the negotiations and their outcome. The Committee also notes that, in May 2007, the Government apparently took a decision to grant severance pay to the workers of COTEBU in accordance with the minimum entitlements provided for in the Labour Code. In this regard, the Committee wishes to recall the importance which it attaches to the obligation to negotiate in good faith for the maintenance of the harmonious development of labour relations. Accordingly, it is important that both employers and trade unions make every effort to reach an agreement, genuine and constructive negotiations being a necessary component to establish and maintain a relationship of confidence between the parties [see Digest of decisions and principles of the Committee on Freedom of Association, fifth edition, 2006, paras 934 and 935].
8. 294. The Committee believes that the Government should have shown greater consideration for the negotiations which were recently held between the management of COTEBU and the workers’ representatives with a view to concluding a collective agreement, as well as for the clear recommendations made by the governmental committee that it set up on the situation of the staff of COTEBU. The Committee believes that, if the negotiations were not successful because of disagreement, the Government should have considered with the parties ways of overcoming such an obstacle through a conciliation or mediation mechanism, or, if the disagreements persisted, through arbitration by an independent body trusted by the parties. The Committee believes that the Government’s decision of May 2007 is not likely to encourage the conduct of collective bargaining in an atmosphere of mutual good faith and trust.
9. 295. Accordingly, the Committee requests the Government to provide detailed information on the outcome of the negotiations held in April 2007 between the management of COTEBU and SYTRACO with a view to concluding a collective agreement and, if the negotiations were unsuccessful, to consider with the parties ways of overcoming any obstacles through a conciliation or mediation mechanism or, if disagreements persist, through arbitration by an independent body trusted by the parties. The Government is also requested to report on the situation regarding the granting of severance pay to COTEBU workers and to indicate any action taken pursuant to the Government’s decision of May 2007, including any possible legal recourse, and the outcome.

The Committee's recommendations

1. 296. In the light of its foregoing conclusions, the Committee requests the Governing Body to approve the following recommendations:
   • (a) The Committee requests the Government to provide detailed information on the outcome of the negotiations held in April 2007 between the management of COTEBU and SYTRACO with a view to concluding a collective agreement and, if the negotiations are unsuccessful, to consider with the parties ways of overcoming any obstacles through a conciliation or mediation mechanism or, if disagreements persist, through arbitration by an independent body trusted by the parties.
   • (b) The Government is requested to report on the situation regarding the granting of severance pay to COTEBU workers and to indicate any action taken pursuant to the Government’s decision of May 2007, including any possible legal recourse, and the outcome.