Definitive Report - Report No 353, March 2009

Case No 2615 (El Salvador) - Complaint date: 31-OCT-07 - Closed

Allegations: Violation of the collective agreement clause on regrading and wage adjustment; submission of a collective agreement signed by the parties in the Salvadorian Tourism Institute (ISTU) for approval by the authorities (the ministry concerned and the Ministry of Finance); dissolution of the ISTU and future inapplicability of the collective agreement

1. 842. The complaint is contained in a communication from the Trade Union of Workers in the Tourism, Hotel and Allied Industries (STITHS) dated 31 October 2007. That organization sent additional information in a communication dated 19 May 2008.
2. 843. At its November 2008 meeting, the Committee observed that, despite the time which had elapsed since the submission of the complaint, it had not received the observations of the Government. The Committee drew the attention of the Government to the fact that, in accordance with the procedural rules set out in paragraph 17 of its 127th Report, approved by the Governing Body, it might present a report on the substance of the case at its next meeting, even if all the Government’s observations had not been received in due time, and requested the Government to transmit its observations as a matter of urgency [see 351st Report, para. 9]. To date, no observations have been received from the Government.
3. 844. El Salvador has ratified 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. The complainant’s allegations

1. 845. In its communication dated 31 October 2007, the STITHS states that it was established on 24 March 1998, obtained legal personality on 19 May 2000 and concluded a collective agreement with the Salvadorian Tourism Institute (ISTU).
2. 846. According to the complainant, the ISTU violated the collective agreement in force and refused to take the necessary legal steps to register a new collective agreement.
3. 847. Specifically, in 2006, the trade union presented a proposal to the ISTU intended to give effect to the clause reproduced verbatim below:
4. Regrading or wage adjustment
5. The ISTU undertakes to carry out a study on the regrading of certain posts or wage adjustment, in a commission consisting of two representatives each of the ISTU and the trade union. This will be done in accordance with sections 123, 124 and 125 of the Labour Code.
6. The results of the commission’s study will be communicated promptly to the office of the President of the ISTU and the ISTU will take the necessary steps as soon as possible to complete the legal formalities.
7. 848. For several weeks, the ISTU management ignored the proposal for a study on the regrading of certain posts or wage adjustment by the commission referred to in the clause.
8. 849. On 30 July 2007, in the presence of representatives of the different recreation parks, a representative of the ISTU made a commitment to carry out the wage adjustment within 45 days at the latest from 30 July 2007, with retroactive effect from the month of April. This agreement was consigned in record No. 12 dated 28 March 2007 (sent as an attachment).
9. 850. Instead of implementing and honouring the agreement, the ISTU authorities again failed to abide by their signed undertaking and on 7 September 2007, the managing director of the ISTU wrote to the Ministry of Finance cancelling the request for a wage adjustment and regrading which he had submitted under the terms of the abovementioned agreement (the letter from the ISTU authorities cancelling the request is sent as an attachment).
10. 851. The complainant trade union further alleges that on 3 January 2007, it wrote to the Ministry of Labour and Social Welfare requesting a revision of the collective agreement in force. On 22 January 2007, the Ministry notified the parties (the STITHS and the ISTU) of its assent and on 23 January, the managing director of the ISTU convened the STITHS bargaining committee. The committee agreed on the dates and times of its meetings to revise the draft collective agreement presented by the STITHS, consisting of 89 clauses, at the direct negotiation stage. The bargaining process lasted 29 weeks. On 30 July 2007 only three of the 89 clauses had not yet been approved: clause 62 (“Workers’ birthdays”), clause 67 (“Wage scale”) and clause 89 (“Effect and term of the agreement”). Since none of the three clauses had been approved, despite the more than reasonable time allowed by the trade union (47 days, until 30 July 2007) for their approval, and given that partial agreement had been reached, with 86 clauses having been approved and only three remaining pending, the STITHS, in accordance with the Labour Code, informed the ISTU of its intention to declare the direct negotiation stage closed and move on to the stage of administrative conciliation before the Director-General for Labour. The Ministry of Labour was informed of this on 8 August 2007.
11. 852. On 10 August 2007, the Directorate-General for Labour issued a decision initiating the conciliation stage and summoned the STITHS and the ISTU. During the conciliation stage, both parties declared the collective bargaining process concluded on 19 September 2007 and signed and approved the negotiated collective agreement in its entirety.
12. 853. In El Salvador, when a collective agreement is signed with an autonomous official institution such as the ISTU, in order to be valid it must first be approved by the ministry concerned (in this case the Ministry of Tourism), after the Ministry of Finance has given its opinion. The relevant section provides as follows:
13. Section 287. To be valid, a collective agreement signed with an autonomous official institution shall first be approved by the ministry concerned, after the Ministry of Finance has given its opinion.
14. The official autonomous institution which has concluded the collective agreement shall forward it to the Comptroller of the Republic.
15. 854. In this case, the ISTU, without justification, delayed sending the collective agreement that had been negotiated to the two ministries mentioned above, which meant that the agreement could not be registered in the Ministry of Labour, thus preventing it from entering into force and denying the trade union members coverage by the agreement. The trade union requested administrative conciliation. The employer did not appear on the appointed date (8 October 2007). The next day, a conciliation hearing was held in the presence of the STITHS and the ISTU, which had issued a special power of attorney. At the hearing, the ISTU’s agent stated that: (1) he had only been granted limited power of attorney, for the sole purpose of appearing at the hearing; (2) on 5 October 2007, the President of the ISTU had submitted the collective agreement to the managing board of the ISTU for consideration; (3) the board was currently studying and discussing all the clauses of the collective agreement, and therefore no date could be fixed for sending the negotiated agreement to the Ministry of Tourism, neither could the decision of the managing board be determined.
16. 855. The trade union states further that the bargaining committee was set up by the ISTU in January 2007, and concluded its work in September of the same year with the signature of the president of the ISTU, declaring the bargaining process closed and approving the collective agreement. It therefore considered that the line of conduct that had been adopted had held up the process, given that the period allowed for negotiation and revision had elapsed and the time had come to register the agreement.
17. 856. The complainant trade union sees this as a case of sluggishness, negligence, bad faith and unjustified refusal to act.
18. 857. In its communication dated 19 May 2007, the complainant trade union highlights the Government’s general stance of not responding to complaints, and states that the executive branch has threatened the existence of the trade union by planning to dissolve the ISTU and set up a Family Recreation Institute (IRF). According to the complainant, the executive branch has used different forms of pressure and deception to get the workers of the ISTU to accept its dissolution. On the other hand, under pressure from the workers, on 13 March 2008, during the inauguration of Los Chorros Aquatic Park, the President of the ISTU informed the media that none of the ISTU employees would be dismissed when the IRF was established and the ISTU dissolved, as the workers would become employees of the new institution. This means that the ISTU employees would be transferred to the new institution without any guarantee of employment stability, without benefits and without a collective agreement, since the agreement in force in the ISTU provides as follows:
19. Clause 1. The present collective labour agreement is concluded with the Salvadorian Tourism Institute, an autonomous institution in public law, with its headquarters in the city of San Salvador, and the Trade Union of Workers in the Tourism, Hotel and Allied Industries (STITHS), ISTU section, a legally established body with legal personality and with its headquarters in San Salvador.
20. 858. Thus, once the ISTU is dissolved, the collective agreement will no longer apply, and the workers will lose all their benefits under the agreement, including employment stability, which is provided for in clause 13 of the agreement. It will also affect the new collective agreement revised in 2007, which is still being held up by the Salvadorian Government itself. The fact that the Government has not sent its reply on the case presented to the Committee on Freedom of Association is in itself a reflection of the current Government’s lack of willingness to comply with national law and ILO Conventions.
21. 859. The complainant encloses with its communication the following statement issued by the ISTU, dated 22 August 2007:
22. The Minister of Tourism, Mr José Rubén Rochi, and the President of the ISTU, Mr Arturo Hirlemann, presented a draft decree to the Legislative Assembly establishing the new Family Recreation Institute (IRF), which will be given the task of managing our country’s recreation parks, with the aim of improving the quality of life of Salvadorian families.
23. The main purpose of the IRF will be to ensure that relaxation and recreation areas are available to all Salvadorians, to promote full personal development, strengthen family integration and enable children, young people and adults to spend their leisure time in healthy and wholesome pursuits, encouraging their cultural development and the conservation of our natural resources. The establishment of the new Institute will promote and implement the national family recreation plan and policy throughout the country, by gathering all the recreation infrastructures and areas currently dispersed across different state institutions under a single institution.
24. Under the draft law, persons working in the ISTU will be entitled to retirement compensation equivalent to one-and-a-half times the wage in respect of each year of service or each fraction of over six months of service, up to a maximum of 25 years’ service with the ISTU. This does not affect their statutory pension entitlements, and they may thus either continue paying their pension contributions under the law or draw a pension if they have already met the statutory requirements.
25. The ISTU currently employs 310 persons, of whom around 45 per cent have more than 22 years of service in the Institute, 60 per cent are aged over 48 and 20 per cent meet the age and length of service requirements to apply for retirement.
26. In the 46 years of its existence, the ISTU has achieved its primary objective by providing “outdoor family recreation” through its parks: Sihuatehuacán, Atecozol, Altos de la Cueva, Cerro Verde, Walter Thilo Deininger Park, Apulo, Toma de Quezaltepeque, Amapulapa, Agua Fría, Balboa Park and Puerta del Diablo, Apastepeque, Ichanmichen, Costa del Sol and Los Chorros, under its policy of making a social contribution to the Salvadorian population.
27. The establishment of this new institution will benefit all Salvadorians seeking a place for recreation and healthy entertainment.

B. The Committee’s conclusions

1. 860. The Committee regrets that, despite the time that has elapsed, the Government has not provided the information requested, although it has on a number of occasions, including through an urgent appeal, been invited to present its comments and observations on the case.
2. 861. Under these circumstances, and in accordance with the applicable rules of procedure [see 127th Report, para. 17, approved by the Governing Body at its 184th Session], the Committee is bound to present a report on this case without the benefit of the observations it had hoped to receive from the Government.
3. 862. The Committee recalls that the purpose of the whole procedure set up in the International Labour Organization for the examination of allegations of violations of freedom of association is to promote respect for trade union rights in law and in fact. The Committee is convinced that, if the procedure protects governments against unreasonable accusations, governments on their side should recognize the importance of formulating detailed replies to the allegations brought against them, so as to allow the Committee to undertake an objective examination.
4. 863. The Committee observes that in this case the complainant trade union alleges violation of clause 36 of the collective agreement in force in the Salvadorian Tourism Institute (ISTU) concerning regrading or wage adjustment, despite the fact that the representatives of that Institute had promised, on 30 July 2007, to carry out the wage adjustment within 45 days (a copy of the record was sent by the trade union). On the contrary, according to the trade union, on 7 September 2007, the Director-General of the Institute wrote to the Ministry of Finance cancelling the request for a wage adjustment which he had submitted some days previously (a copy of the letter was sent by the trade union).
5. 864. The Committee notes the latest allegations of the complainant trade union concerning the dissolution of the ISTU and the establishment of the Family Recreation Institute (IRF) (announced by the enterprise on 22 August 2007), which means that the collective agreement in force, including the clause on employment stability, will no longer be applied in the new institution.
6. 865. The Committee observes that it is clear from the statement issued by the ISTU that the dissolution of that Institute and the establishment of the IRF is provided for in a draft decree, from which it concludes that the decision and the manner of its implementation were not discussed in consultation with the complainant trade union. In this regard, the Committee regrets this lack of consultation on a matter that is vital to the trade union and to the workers’ interests. It also regrets the failure to observe the agreement reached between the trade union and the ISTU on the implementation of clause 36 of the collective agreement in force.
7. 866. The Committee emphasizes the principle that mutual respect for the commitment undertaken in collective agreements is an important element of the right to bargain collectively and should be upheld in order to establish labour relations on stable and firm ground, and that failure to implement a collective agreement, even on a temporary basis, violates the right to bargain collectively, as well as the principle of bargaining in good faith [see Digest of decisions and principles of the Freedom of Association Committee, 2006, paras 940 and 943]. The Committee also recalls that the closing of an enterprise should not in itself result in the extinction of the obligations resulting from the collective agreement, in particular as regards compensation in the case of dismissal [see Digest, op. cit., para. 1059].
8. 867. The Committee requests the Government to guarantee respect for these principles. The Committee requests the Government to ensure that all of the clauses of the collective agreement concluded with the ISTU relating to statutory benefits are applied in the case of the ISTU employees who lose their jobs.
9. 868. As regards the second allegation, that the collective agreement concluded between the ISTU and the trade union was submitted, pursuant to section 287 of the Labour Code, for approval by the Ministry of Tourism (to which the autonomous official institution ISTU belongs), after the Ministry of Finance gave its opinion, the Committee recalls the principle that:
   • The requirement of previous approval by a government authority to make an agreement valid might discourage the use of voluntary collective bargaining between employers and workers for the settlement of conditions of employment. Even though a refusal by the authorities to give their approval may sometimes be the subject of an appeal to the courts, the system of previous administrative authorization in itself is contrary to the whole system of voluntary negotiation.
10. 869. The Committee has also 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 principles of free collective bargaining [see Digest, op. cit., paras 1015 and 1034]. However, there is nothing to prevent the budgetary authorities from issuing reports either before or during the bargaining process. In these circumstances, the Committee considers that section 287 of the Labour Code violates Article 4 of Convention No. 98, which lays down the principle of free and voluntary negotiation between the parties, and requests the Government to take steps to bring the legislation into conformity with Convention No. 98. The Committee recalls that in the case of salary negotiations in the public service, 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 (see Digest, op.cit., para. 1036).
11. 870. The Committee also regrets the fact that in this case the new collective agreement concluded between the parties after long and intense negotiations could not enter into force as it was not approved by the Ministry of Tourism, which itself has to seek an opinion from the Ministry of Finance. The Committee observes, however, that the entire matter of this collective agreement has become moot with the decision to dissolve the ISTU.
12. 871. The Committee draws the legislative aspects of this case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.

The Committee's recommendations

1. 872. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee requests the Government to guarantee respect of the principles referred to in the conclusions as regards observance of collective agreements and consultation with trade unions on matters affecting the workers’ interests. The Committee requests the Government to ensure that all of the clauses of the collective agreement relating to statutory benefits are applied to the ISTU employees who lose their jobs as a result of the dissolution.
   • (b) The Committee requests the Government to take steps to amend section 287 of the Labour Code so that collective agreements that have been concluded and signed by the parties in an autonomous official institution do not have to be submitted for approval by the Ministry of Tourism, which itself has to seek the opinion of the Ministry of Finance; in this regard, the Committee regrets the fact that the collective agreement negotiated by the complainant trade union and the ISTU could not be applied for that reason.
   • (c) The Committee draws the legislative aspects of this case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.