Definitive Report - Report No 360, June 2011

Case No 2770 (Chile) - Complaint date: 27-MAR-10 - Closed

Allegations: The complainant organization objects to section 381 of the Labour Code (which, while prohibiting the hiring of workers to replace strikers, provides for some exceptions), and alleges that Cerámica Espejo Ltda hired workers to replace workers striking in January 2010 over a pay claim and that the Chilean police (Carabineros de Chile) provided protection to the company so that it could illegally remove goods from its plant given that the workers in the transport department were on strike

1. 345. The complaint is contained in a communication from the World Federation of Trade Unions (WFTU) dated 29 March 2010.
2. 346. The Government sent its observations in a communication dated 11 February 2011.
3. 347. Chile 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. 348. In its communication of 29 March 2010, the WFTU states that Chilean legislation contains a series of regulations that are contrary to the conventions and principles of freedom of association. In this case, the WFTU objects specifically to section 381 of the Labour Code, which stipulates that the replacement of strikers is prohibited, except in certain circumstances.
2. 349. According to the WFTU, the employer may always hire strike-breakers to replace workers who are legitimately exercising their right to strike. Sometimes it is authorized from the first day, at other times from the 15th day of the strike, but in practice strike-breakers begin working from the first day. The WFTU alleges that the outcome of negotiations in Cerámica Espejo Ltda, a company founded in 2002 and an offshoot of Cerámica Espejo S.A., which has been in operation since 1967, is an example of this. The workers submitted their petition to the company in January 2010 and the company indicated its refusal to negotiate, claiming that it did not recognize the trade union. The Labour Inspection, intervening as provided under the law in the case of a dispute, instructed it to negotiate.
3. 350. The WFTU states that the company replied, refusing any form of pay increase, or past or future cost of living rise, and proposing to maintain the current terms for four more years, leaving workers with no practical option but to resort to strike action. The workers exhausted all existing mediation possibilities in an attempt to negotiate with the company, but the company categorically refused any form of negotiation and this led to the strike. The company failed to comply with the provisions of section 381 and, while it offered to pay the bonus stipulated to enable it to hire strike-breaking workers, it did not comply with the other requirements of the Labour Code, namely to offer a Consumer Price Index (CPI) readjustment. The company hired strike-breakers and also redeployed workers performing other duties to replace the strikers. The situation was reported to the Labour Inspection so that it could be verified, but when the inspector arrived at the company, the grinder, a kiln and the storeroom were in operation and the Inspection, having found one vehicle with a hired driver, plus other workers in the week when the strike began, only reported the presence of one strike-breaker, who was the company caretaker. According to the inspectors, they had to consult with their superiors as to whether or not the others were strike-breakers.
4. 351. The WFTU reiterates that the company could not hire strike-breakers and pressure from the workers prompted the Inspection to call for mediation to make the company remove a worker reported by the Inspection as the only strike-breaker, and to seek a negotiated end to the dispute. This mediation took place on the afternoon of the fourth day of the strike. According to the WFTU, the company had achieved its aims during these four days. The company said that it would remove the strike-breaker, which it indeed did that very day, but on the sixth working day it reinstated this strike-breaker, plus hired others.
5. 352. Trade union officials subsequently met on the ninth day of the strike to request that the presence of strike-breakers be verified. The Inspection refused to agree to this revision because it stated that mediation would be sought for the following day. This mediation was called for and the company stated that it was obliged to attend, but that no one could force it to negotiate and reiterated that it did not recognize the trade union because it did not exist. In the meantime, ten days had been completed with strike-breakers.
6. 353. The WFTU stated that the company was unable to operate the departments on strike, including transport and dispatch, as the workers in those departments were on strike, but, despite that, the employers removed goods from the company’s plant with the protection of the Chilean police (Carabineros de Chile). The police, whose responsibility was to maintain public order, actually acted as protectors, thereby enabling an offence to be committed, i.e. the illegal replacement of the company driver and dispatcher who were on strike. The WFTU adds that, as these events occurred on four occasions, officials of the United Federation of Workers (FUT) drew the attention of the police to their illegal act. As a consequence, a second lieutenant tried to intimidate and arrest the trade union officials, which he eventually failed to do. The police were carrying out protection duties to enable the company to remove company products illegally. To put an end to the unlawful police action, the coordinator of the WFTU in Chile went in person to the 11th police station in Lo Espejo to file his claim that police were protecting an employer. In the police station, a lieutenant told him that he was unaware of the regulation governing them and that they made their own decisions on the deployment of forces outside of the community, and that their task was to maintain public order. According to the WFTU, it was a case of the police making believe that there is disorder in the strike area and thus were so taking appropriate action, something which was absolutely untrue. In the light of the lieutenant of the Lo Espejo police station’s endorsement of the unlawful action of his subordinates, the trade union official went to the offices of the southern prefecture of the Santiago police. He was subsequently referred to another unit where the Police Prosecutor’s Office was located and where he filed the written claim that the police were protecting the employer. Although the claim was received, he was informed that it would be considered later and that he would receive a reply within 20 days.

B. The Government’s reply

1. 354. In its communication of 11 February 2011, the Government states that, with regard to the comments relating to section 381 of the Labour Code, in its paragraph 1 it is stipulated that: “... the replacement of striking workers shall be prohibited, except when the last offer, formulated in the manner and with the time limit indicated in paragraph 3 of section 372 (two days), provides for at least …”. According to the Government, this makes it very clear that the general rule in this matter is that the replacement of striking workers is prohibited, which is perfectly in line with the provisions of ILO Conventions Nos 87, 98 and 135.
2. 355. Notwithstanding the above, the following paragraphs of section 381 state that replacement workers may be hired provided that at least the following specific and explicit legal requirements are met:
   • (a) Provisions identical to those contained in the contract, agreement or arbitral award in force, subject to a readjustment equivalent to the percentage change in the CPI determined by the National Institute of Statistics, or another body carrying out this task on its behalf, in the period inclusive from the date of the last readjustment to the date of expiry of the respective instrument.
   • (b) A minimum annual readjustment corresponding to the change in the CPI for the duration of the contract, excluding the last 12 months.
   • (c) A replacement bonus, which shall amount to the equivalent of four “incentive units” (Unidades de Fomento, UF) for each worker hired as a replacement. The total sum of this bonus shall be paid in equal parts to the workers involved in the strike within five days from the date of the end of the strike.
     • In this case, the employer may hire workers as it deems necessary to perform the duties of those involved in the strike from the first day of the beginning of the strike.
     • Furthermore, in this case, the workers may choose individually to return to work from the 15th day of the beginning of the strike.
     • In the event the employer fails to make an offer as set out in paragraph 1, and within the time limit stated therein, it may hire workers as it deems necessary for the aforementioned purpose, from the 15th day of the beginning of the strike, provided it offers the bonus referred to in paragraph 1, subparagraph c) of section 381. In this case, the workers may choose individually to return to work from the 30th day of the beginning of the strike.
     • In the event the offer referred to in paragraph 1 of section 381 is delivered after the deadline, the workers may choose individually to return to work from the 15th day of the delivery of the offer, or from the 30th day of the beginning of the strike, whichever of these falls first. However, the employer may hire workers as it deems necessary to perform the duties of those involved in the strike from the 15th day of the beginning of the strike.
     • For the purposes of section 381, the employer may make more than one offer, provided that at least one of the proposals meets the requirements set out therein, as applicable, and the bonus referred to in paragraph 1, subparagraph c).
     • In the event the workers decide individually to return to work, in accordance with the provisions of this section, they must comply with the conditions set forth in the employer’s last offer.
     • Once the employer has exercised the rights stipulated in this section, it may not withdraw the offers referred to therein.
   • 356. In this respect, the Government of Chile notes the comments contained in the complaint on the legal existence of the aforementioned exceptions to the prohibition on hiring replacement workers for strikers. It should be explained, however, that the legislator has envisaged these exceptions exclusively for situations explicitly and specifically provided for in law, and whose application entails a considerable financial burden for the employer, which discourages it from exercising this prerogative, particularly when it is exercised from the first day of the strike.
3. 357. The foregoing is confirmed in Labour Directorate decision No. 2852/157 of 30 August 2002, which states: “… has been envisaged by the legislator to discourage the replacement of workers from the first day of the strike, since it would render it more expensive to do so … the bonus must be contained in the employer’s last offer so that it may exercise its right to replace workers and so that the employees involved may exercise their prerogative to resume their usual work”.
4. 358. With regard to the offences attributed to Cerámica Espejo Ltda, the Government states that the company indicated in its letter of observations that, while it is true that it did not offer the minimum annual CPI readjustment, it had offered to pay the replacement bonus of four UF for each worker hired as a replacement. Such an offer legally entitled it to hire replacement workers from the 15th day of the beginning of the strike and to accept strikers from the 30th day, in accordance with section 381 of the Chilean Labour Code. As mentioned by the company in question, this can be verified in memorandum ORD No. 272 of 10 March 2010 of the Communal Labour Inspection of Santiago Sur. The company also stated that it had not redeployed its workers to replace the strikers, since work teams included more workers than just those who were on strike. They also stated that they had only hired one night watchman on the 30th day from the beginning of the strike, when it was already legally permitted to hire replacement workers.
5. 359. The Government states that it is of prime importance to note that it is not in a position to give an opinion on the offences contained in this complaint, since any references made are not supported by documents to enable the establishment of a presumption of truth. It adds that Chile has an efficient institutional structure through the National Labour Directorate, an institution which has fully complied with the law in performing its duties of inspection and mediation; hence, should it transpire that a punishable act has been committed, it can establish the relevant offence and ensure the proper exercise of work-related rights. Based on the foregoing, the Labour Directorate instructed the company to negotiate and verified and reported the existence of a replacement worker, thereby exercising the powers bestowed by Chilean labour law.
6. 360. The Government adds that Chile has also undertaken a fundamental reform of labour justice administration to safeguard all labour rights provided for both in international treaties signed by Chile and in its Constitution. This reform is guided by basic principles, which include the bilateral nature of hearings, orality, publicity, State authority-initiated proceedings, speciality and immediacy. The claimants did not make use of the mechanisms available to them under the law to ensure respect of their labour rights.
7. 361. Notwithstanding the foregoing, it should be noted that the complaint fails to state how the rights defined in ILO Conventions Nos 87, 98 and 135 have been violated. In this regard, the Government states that it has fully complied with the provisions and principles enshrined in those instruments, recognizing and promoting freedom of association, a fundamental guarantee provided for in paragraph 16, article 19, of the Chilean Constitution. In particular, with regard to Convention No. 87, the right of the workers to form and join the trade union organization in question was respected at all times and the public authorities refrained from any intervention that might restrict this right. With regard to the provisions of Convention No. 98, and in particular Article 4, actions taken by the Labour Directorate were in accordance with the international instrument, as the necessary steps were taken to encourage the full development and utilization of machinery for collective bargaining between employers and workers. Lastly, the Government states that it acted in accordance with ILO Convention No. 135, since the company’s worker representatives enjoyed effective protection at all times against any prejudicial act. Their trade union affiliation, participation in the trade union and related activities were especially protected and they were never cut off from the company.
8. 362. The Government states that the guiding principles of collective bargaining have been fully respected which, according to the doctrine, stipulate: (1) it is a fair and peaceful dispute settlement mechanism; (2) its proceedings must allow the parties to exercise the rights to which they are entitled; (3) its provisions must promote a flexible working relationship and prevent the outcome of negotiations from interfering with the legitimate rights of third parties; (4) it must be a technical process, which means that the parties should negotiate with a knowledge of the background to the case and the necessary advice; and (5) this process must also be responsible and inclusive, enabling the parties to agree on mediation and arbitration mechanisms so that a strike would only take place should it be impossible to reach a solution.
9. 363. With regard to the actions of the Chilean police, the Government notes that the company stated that it resorted to police protection for the truck as it left the company, which on one occasion was damaged by Mr Luis Calderón, President of the striking trade union. The company also stated that this person had allegedly cut the electricity supply on four occasions and on three occasions is said to have done the same to the water supply; thus, according to the company, clearly restricting the right to work of those workers who were not on strike.
10. 364. The Government states that the police reported that on the occasion in question the chief of police and his staff were present at the scene, “… interviewing both parties to the dispute, providing an opportunity for them to defend their positions as provided for in law and offering to keep lines of communication with the police open to ensure that public order rules were not transgressed, which is a constitutional and legal obligation of the Chilean police force”.
11. 365. In this regard, preventive monitoring mechanisms and patrols are understood to have been put in place to safeguard security and the personal safety of all participants in the dispute, as stated by the police institution in the aforementioned document. During the course of events, police personnel are understood to have gone to the company to verify the claim of non-striking workers, who also expressed concern for their own safety due to their being threatened by striking workers because they were not taking part in the strike, a situation that would lead to the right to work of those workers being affected and restrict their entry into and exit from the company’s plant. It should also be noted that the police stated that: “It is not the responsibility of the Chilean police to involve itself in the legal classification of workers, hence it is not possible to discriminate between usual, permanent workers and legal replacement workers.” To avoid major disputes, the respective chief of police remained in constant communication with both parties to the dispute.
12. 366. Moreover, the Chilean police stated that, on 29 March 2010, Mr José Luis Ortiz Arcos came and introduced himself to its units as an important official of the WFTU in Chile and is alleged to have demanded to have a meeting with high command. He is said to have been in a blind rage and displaying a defiant attitude. Lastly, they stated in their defence that any action taken by the Chilean police was in accordance with the Constitution and Police Constitutional Act No. 19861, since the institution has responsibility for maintaining public order, the personal safety of those involved in disputes and respect for public and private property at all times.
13. 367. The Government states that it is paramount to make further reference to the institutional structure of Chile, as the Chilean police force belongs to this group of bodies. Its primary role is to maintain and guarantee public order, which it adeptly fulfilled by undertaking preventive patrol and monitoring duties to safeguard security and the personal safety of all the participants in the dispute; interviewing both parties and acting as a facilitator for smooth communications. It verified the claims of workers who did not join the stoppage and, in particular, it maintained its independence and impartiality, neither discriminating nor making a legal distinction between workers. The conduct of the Chilean police was perfectly in line with Article 1 of ILO Convention No. 98, as the workers enjoyed adequate protection at all times against any discriminatory act aimed at impairing freedom of association in their workplace.
14. 368. Moreover, according to the Government, it is important to state that the actions of the Chilean police in the case in question are perfectly in line with the criteria set by the ILO to gauge police intervention during the strike, since they were at all times directed at maintaining public order. The Government concludes that at no time has it strayed from the principles enshrined in ILO Conventions Nos 87, 98 and 135 ratified by Chile and neither has it neglected the principles and rules that inspire and govern labour legislation. The actions of the bodies in question, the Chilean police and the Labour Directorate, were at all times in line with their sphere of competence under the rule of Chilean law, with full respect for ratified international treaties.

C. The Committee’s conclusions

1. 369. The Committee notes that the complainant organization in the present case objects to section 381 of the Labour Code (which, while prohibiting the recruitment of workers to replace strikers, provides for some exceptions; these are cited in the Government’s reply), and alleges that the company Cerámica Espejo Ltda hired workers to replace workers striking in January 2010 over a pay claim and that the Chilean police force provided protection to the company so that it could illegally remove goods from its plant given that the workers in the transport department were on strike.
2. 370. With regard to section 381 of the Labour Code on the replacement of striking workers, the Committee notes that the Government states that: (1) the general rule on this matter provided for in paragraph 1 of the section in question is that the replacement of striking workers is prohibited, but that notwithstanding this, the subsequent paragraphs of section 381 state that replacement workers may be hired provided that the specific and explicit legal requirements are met; and (2) the legislator has envisaged these exceptions exclusively for situations explicitly and specifically provided for in law, and their application entails a considerable financial burden for the employer, which discourages it from exercising the prerogative, particularly when it is exercised from the first day of the strike (according to the Government, Labour Directorate decision No. 2852/157 of 30 August 2002 stipulates the aim of discouraging the replacement of strikers).
3. 371. In this regard, the Committee recalls that on numerous occasions it has emphasized that, if a strike is legal, recourse to the use of labour drawn from outside the undertaking to replace the strikers for an indeterminate period entails a risk of derogation from the right to strike, which may affect the free exercise of trade union rights [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 633]. The Committee also notes that the Committee of Experts on the Application of Conventions and Recommendations (CEACR) has stated on several occasions that section 381 of the Labour Code is not in compliance with Convention No. 87 ratified by Chile.
4. 372. The Committee also wishes to recall that the hiring of workers to break a strike in a sector which cannot be regarded as an essential sector in the strict sense of the term, and hence one in which strikes might be forbidden, constitutes a serious violation of freedom of association, and that the employment of persons to perform duties which have been suspended as a result of a labour dispute can, if the strike is lawful, be justified only by the need to ensure the operation of services or industries whose suspension would lead to an acute crisis [see Digest, op. cit., paras 632 and 636]. In these circumstances, the Committee requests the Government to take steps to amend section 381 of the Labour Code, so that the hiring of workers to replace strikers will only be possible in the event of strikes in essential sectors or services in the strict sense of the term, in the event of minimum services not being maintained, or in the event of an acute crisis, and to ensure that these amendments are effectively implemented.
5. 373. With regard to the allegations relating to the hiring of workers to replace strikers by Cerámica Espejo Ltda (according to the WFTU, the Labour Inspection reported the employment of one worker during the strike), the Committee notes that the Government states that the company reported that: (1) although it is true that it did not offer the minimum annual CPI readjustment, it offered to pay the replacement bonus for each worker hired as a replacement; (2) such an offer legally entitled it to hire replacement workers from the 15th day of the beginning of the strike and to accept strikers from the 30th day, in accordance with section 381 of the Chilean Labour Code (according to the company, this can be verified in memorandum No. 272 of March 2010 of the Communal Labour Inspection of Santiago Sur); and (3) it had not redeployed its workers to replace the strikers, since work teams included more workers than just those who were on strike and only one “night watchman” was hired on the 30th day from the beginning of the strike, when it was already legally permitted to hire replacement workers. The Committee notes that the Government states that: (1) it is not in a position to give an opinion on the facts, since any references made are not supported by documents that would enable the establishment of a presumption of truth; (2) the National Labour Directorate has fully complied with the law in performing its duties of inspection and mediation, and in the exercise of its duties it instructed the company to negotiate and verified and reported the existence of a replacement worker (hired under the powers bestowed by law); (3) a fundamental reform of labour justice administration to safeguard all labour rights provided for both in international treaties signed by Chile and in its Constitution was undertaken, and the claimants did not make use of the mechanisms available to them under the law to ensure respect of their labour rights; and (4) it has fully complied with the provisions and principles enshrined in Conventions Nos 87, 98 and 135.
6. 374. In these circumstances, noting that, in the context of the dispute, the company in question had hired a worker (which was verified by the Labour Inspection) to replace a striker in the ceramics sector, which is not an essential service in the strict sense of the term, the Committee requests the Government to ensure that, in the future, workers to replace strikers may only be hired in the event of a strike in essential services in the strict sense of the term, in the event of minimum services not being maintained, or in the event of an acute crisis.
7. 375. With regard to the allegation that the Chilean police force provided protection to the company so that it could illegally remove goods from its plant given that the workers in the transport department were on strike, the Committee notes the Government’s statement that the company said that it resorted to police protection for the truck as it left the company, as in the past it had been attacked by the president of the striking trade union. The Committee also notes that the Government’s indication that the Chilean police reports that: (1) when the events relating to the complaint took place, they were present at the scene, they interviewed both parties to the dispute and provided an opportunity for them to defend their positions as provided for in law and offered to keep lines of communication with the parties open to ensure that public order rules were not transgressed, which is a constitutional and legal obligation of the Chilean police force; (2) in this regard, preventive monitoring mechanisms and patrols were put in place to safeguard security and the personal safety of all participants in the dispute; (3) during the course of the dispute, police personnel went to the company to verify the claim of non-striking workers, who had expressed concern for their own safety due to their being threatened by striking workers; (4) it is not the responsibility of the Chilean police to involve itself in the legal classification of workers, hence it is not possible to discriminate between usual, permanent workers and legal replacement workers; (5) an official of the WFTU introduced himself to police units on 29 March 2010 and is alleged to have been in a blind rage and displaying a defiant attitude; and (6) any action the police took was in accordance with the Constitution and the Police Constitutional Act, since the institution has responsibility for maintaining public order, the personal safety of those involved in disputes and respect for public and private property. Lastly, the Committee notes that the Government states that the actions of the Chilean police were perfectly in line with the criteria set by the ILO to gauge police intervention during the strike. Taking into account all of this information and, in particular, that the police intervention did not lead to disorder or violence and that, according to the police, the non-strikers were being threatened, the Committee will not pursue its examination of this allegation.

The Committee's recommendations

1. 376. In light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • The Committee requests the Government to take steps to amend section 381 of the Labour Code, so that the hiring of workers to replace strikers will only be possible in the event of strikes in essential services in the strict sense of the term, in the event of minimum services not being maintained, or in the event of an acute crisis and to ensure that these amendments are effectively implemented.