Report in which the committee requests to be kept informed of development - Report No 357, June 2010

Case No 2690 (Peru) - Complaint date: 11-NOV-08 - Closed

Allegations: The complainant organization objects to Legislative Decree No. 1022 classifying port services as essential public services; the complainant also alleges that, in the context of collective bargaining, the Office of the National Superintendent of the Tax Administration has refused to refer the dispute to arbitration and classified the activities performed in it as an essential service

1. 925. The complaint is contained in a communication from the Autonomous Confederation of Peruvian Workers (CATP) dated 11 November 2008. The CATP sent new allegations in a communication dated 21 December 2009.
2. 926. The Government sent partial observations in communications dated 1 March and 25 May 2010.
3. 927. Peru has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), and the Labour Relations (Public Service) Convention, 1978 (No. 151).

A. The complainant’s allegations

1. 928. In its communication dated 11 November 2008, the CATP states that, by Legislative Decree No. 29157, the Congress of the Republic delegated to the executive branch (section 1) the authority to legislate on various matters relating to the implementation of the United States–Peru Trade Promotion Agreement and its Protocol of amendment. In addition, section 2 lays down an 180-day time frame and provides for the authority to legislate in the following areas: (1) trade facilitation; (2) improvement of the regulatory framework, institution building and streamlining of administrative procedures, and modernization of the State; (3) improvement of the administration of justice with regard to the commercial and administrative jurisdictions, for which the opinion of the judiciary shall be requested; (4) promotion of private investment; (5) promotion of technological innovation, quality enhancement and capacity building; (6) promotion of employment and micro-, small and medium-sized enterprises; (7) environmental management institution building; and (8) raising the competitiveness of agricultural and livestock production.
2. 929. The CATP states that Legislative Decree No. 1022, promulgated on 30 July 2008, modifies the National Port System Act, No. 27943. Section 2 incorporates a number of transitional and final provisions into Act No. 27943, the 30th of which classifies the administration, operation, equipping and maintenance of publicly owned and used port infrastructure as an essential public service, as well as the performance of port services in such infrastructure, which are guaranteed by the State. According to the CATP, the matters delegated to the executive branch do not expressly include the authority to legislate on the exercise of fundamental rights, including the right to strike, laid down in article 28 of the Constitution and in ILO Conventions Nos 87 and 98.
3. 930. The CATP adds that the exercise of the fundamental right to strike may be legally limited in order to ensure that it is exercised in a manner compatible with other constitutional rights (such as the life, health or personal safety of the population); one such limitation permitted by the international standards is the classification of certain public services as essential. This was affirmed and recognized by the Constitutional Court which stated “it must be accepted that the right to strike is not absolute, but controlled. Therefore, it must be effectuated in harmony with the other rights” in a ruling handed down in Case
4. No. 008-2005-AI/TC, ground c.4.6.
5. 931. The CATP recalls that according to the Committee of Experts, the term “essential services” refers only to services the interruption of which would endanger the life, personal safety or health of the whole or part of the population, and in which the right to strike may be restricted or even prohibited, provided that compensatory guarantees are in place. The CATP therefore considers that port work cannot be classified as an essential public service, as its interruption would not endanger the life, personal safety or health of the population. This is corroborated by section 83 of the consolidated text of Legislative Decree No. 25593, the Labour Relations Act, approved by Supreme Decree No. 010-2003-TR –which does not classify port work as an essential public service, in line with the provisions of the international labour standards and ILO doctrine. A close look at the stringency of the restriction placed on the exercise of the right to strike by the 30th final and transitional provision reveals that it is disproportionate, covering not only port work but also related activities such as the administration, operation, equipping and maintenance of publicly owned and used port infrastructure, and the restriction thus affects the exercise of the right to strike disproportionately.
6. 932. In its communication dated 21 December 2009, the CATP states that its affiliate, the United Trade Union of the Office of the National Superintendent of the Tax Administration (SUNAT) Employees (SINAUT–SUNAT) showed genuine commitment to a “culture of dialogue and direct negotiation” by waiting for over five months for its employer (the State of Peru) to agree to meet to start the direct negotiation process which, according to the law, should have begun ten calendar days after the list of demands was presented on 31 July 2008. The complainant adds that on 3 November 2008 a notarized letter was sent stating that this stage of the process would be broken off if a bargaining session was not set up within three working days. In response, the SUNAT appointed a new negotiating committee, but did not set up a bargaining session. During the conciliation stage before the labour authority, although the SUNAT attended the meetings, it never made a proposal or agreed to start bargaining on the items on the list of demands. As a result, several sessions went by without achieving lifting the stalemate, wasting time unnecessarily. Even at the informal meetings convened by the labour authority, first by the regional authority, then by the national authority of the Ministry of Labour and Employment Promotion, the SUNAT bargaining committee failed to put forward a single proposal, confining itself at the last meeting to refusing to bargain on the economic items and mentioning its proposed “policies” with regard to the others. Neither the conciliation stage nor the informal meetings held by the labour authority led to any agreement, owing to the SUNAT’s intransigence. The employer also turned down the trade union’s request to refer the dispute to arbitration.
7. 933. The CATP states that during the conciliation stage (14 January–2 March 2009), the SUNAT committee failed to appear at the first meeting before the labour authority. Subsequently, at the second and third meetings, successive changes were made to the membership of the SUNAT bargaining committee. At the third meeting, the employer’s representatives stated that it would draft an alternative proposal to the list of demands. At a meeting held on the employer’s premises with the National Human Resources Manager, it was announced that there was no alternative proposal from the SUNAT, and only now would a meeting be held with the National Superintendent of the Tax Administration to state the institution’s policy with regard to the trade union’s demands. He was informed that that was not what had been said by the members of the SUNAT bargaining committee at the third meeting, that the union’s goal was to propose a peaceful settlement and forestall any conflicts, but that if they did not leave us any alternative and delayed our constitutional right to bargain collectively, we would exercise our constitutional right to strike. Later, on 2 March 2009, the fourth conciliation meeting was held in the Ministry of Labour. Again, the employer failed to notify the union in advance of the new membership of its bargaining committee, of which it was informed only at the hearing itself. The conciliator of the Ministry of Labour and Employment Promotion asked the employer’s representatives to submit their proposal as agreed at the last conciliation meeting. They were also reminded that, if there were no proposals, negotiation would begin item by item, starting with the non-economic items.
8. 934. The CATP states that the new members of this committee announced outright that there was no proposal and that they were unable to negotiate on any economic item, as this was prohibited by the budgetary laws. They said that they hoped that the union representatives would “recognize” this situation so that they could start bargaining on the non-economic items. The union representatives suggested that they indicate which non-economic items they would be prepared to negotiate. However, the employer’s representatives said that they could not reply on that point until the workers’ representatives expressly recognized the bargaining restriction in regard to economic items, so that no economic item would be raised later on. The employer’s side thus made any further negotiations conditional on leaving out the entire “economic” aspect, including the item on a technical assessment of posts, which was closely linked to career development (a non-economic aspect). The employer’s attitude left no doubt as to its position with regard to collective bargaining and its firm refusal to initiate it. The complainant states that pursuant to the SUNAT’s Decisions Nos 044-2009/SUNAT and 063-2009/SUNAT, the employer’s representatives are fully authorized to take part in negotiation and conciliation and to sign any agreement and the collective labour agreement, should one be concluded, in accordance with section 49 of the Labour Relations Act approved by Supreme Decree No. 010-2003-TR, and therefore the employer’s proposal was unreasonable.
9. 935. Concerning the non-economic items, the employer’s side said that some of the topics under this heading (such as uniforms and infrastructure) were already covered by its policies, and therefore could not be negotiated only with a trade union, as they would have to be applicable to all the workers. This further bears out the argument that it would make sense to sign an agreement that would clearly express its commitment to complying with the stated policy. The trade union committee pointed out that the items on the list of demands had been agreed to at a national assembly and represented the views of all the members, and the employer’s proposal was thus tantamount to giving up bargaining on all the economic items, without any concrete proposal being put forward by the employer on the non-economic items (working conditions – career development, auxiliary workers, training, trade union facilities). In these circumstances, and citing the principle of good faith, the union insisted on starting to negotiate item by item, and if they considered that there was a legal restriction, that could be brought up under the item concerned. This suggestion was not accepted by the employer’s side, which maintained that it was impossible to negotiate on the economic items, insisting that this should be “recognized” and that no item under that heading be discussed throughout the bargaining process. A deadlock was thus reached between the two positions, faced with which the trade union committee opted to declare the conciliation phase over. Accordingly, in accordance with the established legal procedure, the process had to move on to the next stage: arbitration or strike action.
10. 936. The CATP states that five informal meetings were held, without any results, at the initiative of the National Directorate for Labour Relations, which convened the union and the employer in order to reach an alternative settlement to the dispute that had arisen in regard to collective bargaining on the list of demands for 2008. The first meeting was held on 24 April 2009, the second on 4 May (on that occasion the employer’s representative appeared without the required certification and the meeting was therefore cancelled), the third on 12 May, the fourth on 20 May and the last on 28 May 2009. It should be pointed out that at the third meeting, the conciliator focused on economic conditions and asked the employer to report on action (specific steps) taken with regard to the Ministry of Economy and Finance (MEF). The employer stated that no recent steps had been taken but that it was preparing reports for the MEF on human resources issues which would be submitted at the end of June or July 2009, prior to approval of the Budget Act for 2010. The union requested that, once that step was taken, the MEF hold prompt consultations on the list of demands, and that a report be submitted on the following: (1) the loss of benefits such as the Christmas basket, education bonus and productivity bonus; (2) arrears in wages: no wage increases had been awarded for the past ten years despite the loss of purchasing power in excess of 24 per cent; (3) proposals be submitted to the MEF for improvements for the occupational categories whose certification had been postponed (technicians, secretaries, etc.); (4) consideration be given to the employment situation of the workers undergoing the tax administration training course 40-41; and (5) the issue of recognition be definitively resolved in regard to the demands to which a response had not been received. On the demands that had been declared receivable, the adjustment should be made and the workers paid accordingly. The other meetings did not yield any progress towards settlement of the list of demands, and no agreement was reached.
11. 937. The CATP adds that on 31 March 2009, the SUNAT sent the union a copy of letter
12. No. 09-2009-SUNAT/2F0000, indicating the number and occupation of the workers required to maintain essential services in the event of a strike. The union replied in letter
13. No. 036-2009/SINAUT–SUNAT, stating that the content of the original letter did not comply with the law, since under section 83 of the consolidated Labour Relations Act, tax collection and administration were not included in the restrictive list laid down in that provision, and therefore the activities carried out by the SUNAT were not classified as essential services. In addition, it was pointed out that the date set by the Ministry of Labour and Employment Promotion to communicate the minimum staffing levels required to operate was January of each year, and it was too late for the SUNAT to meet this deadline; moreover, the number of employees indicated should be established by mutual agreement with the trade unions. Therefore, in the event of a strike affecting the SUNAT, the workers were not obliged to provide essential services or to accept the statement of the number and occupation of the workers required to provide minimum essential services.
14. 938. According to the CATP, it should be pointed out that this attempt by the employer to classify itself as an essential service is illegal from any standpoint and constitutes an anti-union practice, since it was done with the sole aim of obstructing the process of collective bargaining on the lists of demands presented before 2009 by SINTRADUANAS, SINTRASUR and SINAUT–SUNAT, which still remain to be settled. Accordingly, the trade union has contested the self-classification as an essential service before the Ministry of Labour. Lastly, the CATP states that the union asked the SUNAT to refer the case to arbitration, again with a view to exhausting peaceful means of settling the dispute as provided in the legislation, but the employer regrettably refused.

B. The Government’s reply

1. 939. In its communication of 1 March 2010, the Government states that, as regards the 30th provision of Legislative Decree No. 1022, the Ministry of Labour and Employment Promotion sent letter No. 025-2010-MTPE/9.1 to the National Port Authority and letter No. 026-2010-MTPE/9.1 to the Ministry of Transport and Communications asking them to state their position on the matter. It should be pointed out that the Ministry of Transport and Communications is the lead body responsible for designing sectoral policies and drafting the regulations applicable to transport, communications and the national ports system, under section 18 of Act No. 27943, the National Ports System Law. The National Port Authority has exclusive authority in regard to technical regulations, as well as other executive powers in accordance with the National Ports Development Plan. The technical opinion of both bodies is thus vitally important. The Government points out that the Ministry of Labour and Employment Promotion, as the ILO’s interlocutor representing the State, is currently awaiting the technical opinions requested from the Ministry of Transport and Communications and the National Port Authority before taking a decision, of which the ILO will be informed. Nonetheless, it should be borne in mind that domestic legislation provides for the possibility of bringing an action for acción de garantía (enforcement of constitutional rights) under the Political Constitution of Peru, and the complainants may do so to seek restoration of their rights. Article 200(4) of the Political Constitution of Peru refers to the remedy of unconstitutionality, the procedure for which is governed by Title VIII of the Code of Constitutional Procedure, Act No. 28237. The purpose of the action for enforcement of constitutional rights is to defend the Constitution against infractions against its normative rank.
2. 940. In its communication of 25 May 2010, the Government sent additional observations as well as observations from the SUNAT, according to which the SINAUT union called the strike without the authorization of the administrative authority determining the minimum service to be maintained. The union subsequently rectified this omission, and the strike was thus considered legal. The Government and the SUNAT confirm that the negotiation of certain economic conditions could not take place for budgetary reasons.

C. The Committee’s conclusions

1. 941. The Committee observes that in the present case the complainant objects to the 30th provision of Legislative Decree No. 1022, which provides that the administration, operation, equipping and maintenance of publicly owned and used port infrastructure are classified as essential public services, as is the performance of port services in such infrastructure, which are guaranteed by the State; the complainant also alleges that in the context of collective bargaining the Office of the National Superintendent of the Tax Administration (SUNAT) has refused to refer the dispute to arbitration and has classified the activities carried out in that institution as essential services.
2. 942. As regards the disputed thirtieth provision of Legislative Decree No. 1022 classifying port services guaranteed by the State as essential public services (the provision also provides that the executive branch, in exceptional cases of interruption in the performance of such port services, shall take the necessary measures to ensure the ongoing, continuous, safe and competitive provision of services), the Committee notes that the Government states that: (1) the Ministry of Transport and Communications is the lead body responsible for designing sectoral policy and drafting general regulations applicable to activities relating to transport, communications and the National Ports System; (2) the National Port Authority has exclusive authority in regard to technical regulations, as well as other executive powers under the National Ports Development Plan; (3) as the technical opinion of the two bodies is vitally important, the Ministry of Labour and Employment Promotion sent letters asking them to state their views on the matter, and is currently awaiting the requested information; and (4) domestic legislation provides for the possibility of bringing an action for enforcement of constitutional rights under the Political Constitution, and the complainants may do so to seek restoration of their rights.
3. 943. The Committee recalls that ports do not constitute essential services in the strict sense of the term [see Digest of decisions and principles of the Freedom of Association Committee, fifth edition, 2006, para. 587]. The Committee also recalls that the services provided by the National Ports Enterprise and ports themselves do not constitute essential services, although they are an important public service in which a minimum service could be required in case of a strike [see Digest, op. cit., para. 616]. In this case, the Committee requests the Government, after consulting the social partners concerned, to take the necessary steps, including legislative steps if necessary, to ensure that the classification of port activities as essential services serves only to impose a minimum service in the event of a strike, and that such a minimum service is determined not only by the public authorities, but in consultation with the workers’ and employers’ organizations concerned. The Committee draws this aspect of the case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.
4. 944. As regards the allegation that, in the context of collective bargaining between SINAUT–SUNAT and SUNAT, the SUNAT refuses to refer the dispute to arbitration on the grounds that it is impossible to negotiate on economic items as this is prohibited by the budget laws, the Committee regrets that the Government has not communicated its observations in this regard. The Committee recalls that when it examined allegations on obstacles placed in the way of collective bargaining in the public sector it stated that it “is aware that collective bargaining in the public sector calls for verification of the available resources in the various public bodies or undertakings, that such resources are dependent upon state budgets and that the period of duration of collective agreements in the public sector does not always coincide with the duration of budgetary laws – a situation which can give rise to difficulties” [see 287th report, Case No. 1617 (Ecuador), paras 63–64 ]. The Committee also points out that it has stated on numerous occasions that “if, as part of its stabilization policy, a government considers that wage rates cannot be settled freely through collective bargaining, such a restriction should be imposed as an exceptional measure and only to the extent that is necessary, without exceeding a reasonable period, and it should be accompanied by adequate safeguards to protect workers’ living standards”. [See Digest, op. cit., para. 1024.]
5. 945. The Committee further recalls that it has endorsed the point of view expressed by the Committee of Experts on the Application of Conventions and Recommendations in its 1994 General Survey: legislative provisions which allow Parliament or the competent budgetary authority to set upper and lower limits for wage negotiations or to establish an overall “budgetary package” within which the parties may negotiate monetary or standard-setting clauses (for example, reduction of working hours or other arrangements, varying wage increases according to levels of remuneration, fixing a timetable for readjustment provisions) or those which give the financial authorities the right to participate in collective bargaining alongside the direct employer, are compatible with the Convention, provided they leave a significant role to collective bargaining, and the authorities should give preference as far as possible to collective bargaining in determining the conditions of employment of public servants; where the circumstances rule this out, measures of this kind should be limited in time and protect the standard of living of the workers who are the most affected. In other words, a fair and reasonable compromise should be sought between the need to preserve as far as possible the autonomy of the parties to bargaining, on the one hand, and measures which must be taken by governments to overcome their budgetary difficulties, on the other [see Digest, op. cit., para. 1038].
6. 946. In these circumstances, while it observes that, according to the complainant and as confirmed by the Government and the SUNAT invoking budgetary reasons, the representatives of the SUNAT have refused to negotiate only on economic terms having an influence on the budget, but not other terms of employment, the Committee emphasizes that the impossibility of negotiating wage increases on an ongoing basis is contrary to the principle of free and voluntary collective bargaining enshrined in Convention No. 98 and requests the Government to promote appropriate mechanisms so that the parties may conclude a collective agreement in the near future. The Committee requests the Government to keep it informed in this regard.
7. 947. As regards the allegation that the SUNAT classified the activities performed in it as essential services, the Committee observes that, according to its founding Act No. 24829, and its general law approved by Legislative Decree No. 501, the SUNAT is a decentralized public institution of the economic and financial sector, with legal personality under public law and its own property, and enjoying economic, administrative, functional, technical and financial autonomy, and, pursuant to Supreme Decree No. 061-2002-PCM, has merged with the Office of the National Superintendent for Customs, taking over the functions’ faculties and powers conferred by law on that body (in addition to the functions of the customs authority, the SUNAT administers, audits and collects internal revenues). In this regard, the Committee recalls that “the prohibition of the right to strike of customs officers, who are public servants exercising authority in the name of the State, is not contrary to the principles of freedom of association” [see Digest, op. cit, para. 579]. The Committee also considers that the SUNAT employees performing tasks related to the administration, audit and collection of internal revenues also exercise authority in the name of the State. The Committee notes, however, that according to the Government and the SUNAT, the union called the strike without authorization from the administrative authority determining the minimum service to be maintained and that it subsequently rectified this omission, thus ensuring that the strike was considered legal.

The Committee's recommendations

1. 948. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) Recalling that ports do not constitute essential services in the strict sense of the term, the Committee requests the Government, after consulting the social partners concerned, to take the necessary steps, including legislative steps if necessary, to ensure that the classification of port activities as essential services serves only to impose a minimum service in the event of a strike, and that such a minimum service is determined not only by the public authorities, but also with the participation of the workers’ and employers’ organizations concerned. The Committee draws this aspect of the case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.
   • (b) The Committee emphasizes that the impossibility of negotiating wage increases on an ongoing basis is contrary to the principle of free and voluntary collective bargaining enshrined in Convention No. 98 and requests the Government to promote appropriate mechanisms so that SINAUT–SUNAT and the SUNAT may conclude a collective agreement in the near future. The Committee requests the Government to keep it informed in this regard.