Report in which the committee requests to be kept informed of development - Report No 367, March 2013

Case No 2940 (Bosnia and Herzegovina) - Complaint date: 18-APR-12 - Closed

Allegations: The complainant alleges that the new labour law sets out excessive minimum membership requirements for employers’ organizations

1. 232. The complaint is contained in a communication from the Association of Employers of Bosnia–Herzegovina (APBiH) dated 18 April 2012.
2. 233. The Government forwarded its response to the allegations in a communication received on 31 July 2012.
3. 234. Bosnia and Herzegovina 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. 235. In a communication dated 18 April 2012, the complainant organization, the APBiH, indicates that it wishes to file a complaint regarding the new labour law of the Republika Srpska for violations of the provisions of the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87).
2. 236. The APBiH was founded in 2004. Its members are independent and voluntary organizations of the entities of Bosnia and Herzegovina and of district Brcko: (i) the Union of Employers of the Federation of Bosnia-Herzegovina (UPFBiH), from the Federation of Bosnia-Herzegovina; (ii) the Employers’ Confederation of Republika Srpska (ECRS), from the Republika Srpska; and (iii) the Association of Employers of District Brcko, from the district Brcko. The APBiH is a founding member of the Adriatic Regional Employers’ Centre (AREC), founded in 2007.
3. 237. The complainant underlines that this is an urgent matter. The new Labour Act of the Republika Srpska, one of the autonomous entities of Bosnia-Herzegovina, has fixed in its section 146 a threshold of 20 per cent as the minimum requirement for the determination of the representativeness of employers’ organizations which would like to apply for representation in the Economic and Social Council of the Republika Srpska, a council that is inter alia competent for the negotiation of collective agreements. This high threshold is an excessive minimum number and violates the right of employers to establish organizations of their own choosing.
4. 238. The consequences of this provision are the following. Only the employers’ organization set up and funded by the Chamber of Commerce of the Republika Srpska, which is based on compulsory membership, could comply with the established minimum threshold and was selected as a representative organization for the Economic and Social Council of the Republika Srpska. Due to the obvious link between the new organization and the Chamber of Commerce, this new organization cannot be considered as an independent organization of employers. Due to this high minimum requirement, the employers’ organizations, which had been represented in the Economic and Social Council and did not reach the required level, have been eliminated from representation in the Council. This includes one of the founding members of the APBiH, the Employers’ Confederation of the Republika Srpska, which was represented in the Economic and Social Council until the new labour law came into force, was established years before the new organization was set up by the Chamber of Commerce, and is no longer a member of the Council. In addition, existing employers’ organizations, which do not comply with the minimum threshold, did not apply for representation in the Economic and Social Council.
5. 239. The complainant organization concludes that this is a violation of the right of the employers to establish and join organizations of their own choosing. This complaint concerns the application of Articles 2, 3 and 4 of Convention No. 87.
6. 240. Therefore the complainant organization requests the ILO to take the appropriate initiatives towards the Government of Bosnia and Herzegovina so that the Labour Act of the entity of Republika Srpska respects the ILO Conventions on freedom of association and no longer violates the right of the employers to set up and join organizations of their own choosing.

B. The Government’s reply

1. 241. In a communication received on 31 July 2012, the federal Government forwards a communication of the Government of Republika Srpska, in which the latter emphasizes that it is surprised by the ignorance of the complainant as regards the elementary rules of labour and employment relations and the general situation and conduct of social dialogue in the Republika Srpska.
2. 242. The Government of Republika Srpska indicates that, for example, the complainant mentions that a “new” Republika Srpska Labour Act was adopted, which requires urgent action because it restricts the rights of association and the employers’ activities, although this law was adopted in 2000 and was thus in force when the complainant organization was founded in 2004. Since its entry into force in 2000, this Act has been amended and modified several times, with the latest amendments made in 2007, more than five years ago. The text of the Labour Act and all its amendments were submitted to the Committee of Experts.
3. 243. The Government of Republika Srpska further states that the facts relating to the establishment and operation of the Economic and Social Council of the Republika Srpska are absolutely untrue and unfounded. The first Economic and Social Council was established via agreement of the social partners in 1997 (that is, before the start of the privatization of state-owned enterprises – 95 per cent of all employers – and the contracting mode of regulation of labour relations with the entry into force of the 2000 Labour Act). The APBiH has never been a member of the Council. Since its establishment, the Economic and Social Council went through several stages of development, the last of which began in 2008 with the adoption of the Act on the Economic and Social Council of Republika Srpska, a copy of which was submitted to the Committee of Experts.
4. 244. The Government of Republika Srpska states that, in accordance with the provisions of this Act, which already applies since four years, the Council is made up of three representatives from the Government, from the majority representative trade union organized at the level of the Republic and from the majority representative employers’ association organized at the level of the Republic, and discusses and takes positions on issues of development and improvement of collective bargaining, the impact of economic policy and measures for its implementation on social development and stability of employment policy, wages and prices; competition and productivity; privatization and other issues of structural adjustment; protection of work and life environment; education and professional training; health and social care and security; demographic trends and other issues important to achieving and promoting economic and social policy. The Government of Republika Srpska emphasizes that the Council is not, nor ever was, the body responsible for negotiating collective agreements, as only representative trade unions and employers are involved in the conclusion of collective agreements.
5. 245. In Republika Srpska, the Labour Act provides that representative trade unions and representative employers’ associations organized at the relevant level (company, sector or Republic) take part in the negotiation and conclusion of collective agreements. Sections 142–157 of the Labour Act, as revised fully, regulate the procedure and criteria for determining the representativeness of trade unions and employers’ associations, as well as the procedure and method to review the determined representativeness. The procedures for determining the representativeness are public and the parties, which feel that their representativeness was not determined in accordance with the law, have the possibility to contact an independent tripartite body – the Board for Determining the Representativeness of Trade Unions and Employers’ Associations. The Government of Republika Srpska underlines that determining the representativeness of trade unions and employers’ associations in practice by clear and predefined criteria, establishing certain privileges for most representative unions (and employers), is not inconsistent with the ratified Conventions.
6. 246. The Government of Republika Srpska especially points out that, during the initial determination of the representativeness of trade unions and employers’ associations at the level of Republika Srpska in 2008, a public call, which was published in the electronic and print media and the Official Gazette of the Republika Srpska, was addressed to all trade unions and employers’ associations to apply for determining the representativeness. The complainant and its members, although familiar with all the activities taking place on this occasion, did not apply to the mentioned public call, as stated in the complaint.
7. 247. The Government of Republika Srpska also stresses that, although the Labour Act establishes the principle that most representative trade unions and employers’ associations actively participate in conducting social dialogue at the highest level, all regulations and policies adopted in the field of labour, employment and social policies are also publicly published at the drafting stage, and the drafts and proposals are publicly discussed and all interested parties can participate freely and without limitations.
8. 248. The Government of Republika Srpska further indicates that all citizens, associations of citizens, trade unions and employers have the opportunity to participate in public debate and share their comments and suggestions which, if properly explained and in accordance with established principles, are considered and adopted. In this sense, while being aware that addressing the Committee is not conditioned by addressing the local authorities beforehand, the action of the complainant is surprising as it has never tried to initiate discussion or possible change in legislation in Republika Srpska concerning these issues through its relevant members.
9. 249. In conclusion, the Government of Republika Srpska underlines that there is absolute freedom of organization of workers and employers in the relevant trade unions and employers’ associations in Republika Srpska, without any limitations or requirements for obtaining any permits and approvals from any authority. In particular, three natural or legal persons suffice for the establishment of a trade union or employers’ association, in accordance with the Republika Srpska legislation.
10. 250. As for the serious allegation of the complainant that “the majority representative employers’ association in Republika Srpska – Union of Associations of Employers is established and financed by the Chamber of Commerce so that it cannot be considered an independent employers’ organization”, the Government of Republika Srpska qualifies this allegation as absurd and completely unfounded as not based on facts and adequate evidence, and thus unacceptable. The Government of Republika Srpska informs that the Union of Associations of Employers of Republika Srpska was established in 2004 by 13 branch employers’ associations to represent the interests of employers in tripartite dialogue between the Government, employers and trade unions. This Association brings together a total of about 430 employers from Republika Srpska that employ more than 50,000 workers, which is much higher than 20 per cent of the total number of employees in the Republika Srpska economy, and is financed solely by membership dues paid by members associated on a voluntarily basis. The Government of Republika Srpska indicates that, to its knowledge, the only connection of the Union of Associations of Employers of Republika Srpska with the Chamber of Commerce of Republika Srpska is the fact that both organizations have offices in the same office building in Banja Luka, together with several other institutions and organizations. The Government of Republika Srpska states that it is able to provide documentation on the above and ask for a declaration of the Union of Associations or Employers of Republika Srpska, if the Committee considers it necessary.
11. 251. Lastly, the Government of Republika Srpska draws attention to the fact that the complainant organization has no representative organizations of employers in its membership in Republika Srpska, nor is there any information on the activities and membership of the complainant on the Republika Srpska territory. Accordingly, the Government of Republika Srpska believes that the complaint alleging a threat to freedom of organization and activities of employers’ associations in Republika Srpska is absolutely unfounded and should be rejected.

C. The Committee’s conclusions

1. 252. The Committee notes that, in the present case, the complainant alleges that the new labour law sets out excessive minimum membership requirements for employers’ organizations.
2. 253. The Committee notes that, according to the complainant organization: (i) its members are independent and voluntary organizations of the entities of Bosnia and Herzegovina and include the Employers’ Confederation of Republika Srpska (EC Republika Srpska); (ii) section 146 of the Labour Act fixes a high threshold of 20 per cent as the minimum requirement for the determination of the representativeness of employers’ organizations which apply for representation in the Economic and Social Council of the Republika Srpska, a threshold deemed as excessive and in violation of the right of employers to establish organizations of their own choosing and thus of Convention No. 87; (iii) the Council is inter alia competent for the negotiation of collective agreements; (iv) as a result, only the employers’ organization set up and funded by the Chamber of Commerce of the Republika Srpska, which is based on compulsory membership, could comply with the established threshold and was selected as the representative organization for the Council, albeit not independent; (v) the employers’ organizations, which had been represented in the Economic and Social Council and did not reach the required level, have been eliminated from the Council, including the much older Employers’ Confederation of the Republika Srpska, which was a member of the Council until 2007; (vi) moreover, existing employers’ organizations, which do not comply with the minimum threshold, did not apply for representation in the Council.
3. 254. The Committee notes the indications of the Government of Republika Srpska, as forwarded by the federal Government, that: (i) the Labour Act of Republika Srpska was adopted in 2000, and the relevant amendments in 2007; (ii) since its establishment in 1997, the Economic and Social Council went through several stages of development, with the Act on the Economic and Social Council of Republika Srpska being adopted in 2008; (iii) the complainant has never been a member of the Economic and Social Council; (iv) the Council is made up of three representatives from the Government, the most representative trade unions at the level of the Republic and most representative employers’ associations at that level, and discusses and takes positions on issues important to achieving and promoting economic and social policy, including development and improvement of collective bargaining; (v) the tripartite Council is not a body responsible for negotiating collective agreements; (vi) representative trade unions and employers’ associations organized at the relevant level take part in the negotiation of collective agreements, and sections 142–157 of the Labour Act regulate the procedure and criteria for determining the representativeness of unions and employers’ associations, as well as the procedure and method of review; aggrieved parties may contact the Board for Determining the Representativeness of Trade Unions and Employers’ Associations, a tripartite body; (vii) during the initial determination of representativeness at the level of Republika Srpska in 2008, a public call was addressed to all trade unions and employers’ associations to apply but the complainant and its members did not do so; (viii) although only the most representative trade unions and employers’ associations participate in social dialogue at the highest level, all relevant regulations are published in the drafting stage and all interested parties can participate in the public discussion; (ix) the complainant has never tried to initiate discussion or possible change in legislation concerning these issues through its members; (x) three persons suffice for the establishment of a trade union or employers’ association, and there is absolute freedom of organization, without any limitations or requirements for obtaining approvals from authorities in accordance with the law; (xi) the Union of Associations of Employers of Republika Srpska was established in 2004 by 13 branch employers’ associations and brings together 430 employers that employ more than 50,000 workers, which is much higher than 20 per cent of the total number of employees in the Republika Srpska economy, and is financed solely by membership dues paid by members associated on a voluntarily basis, and only shares the same building as the Chamber of Commerce; (xi) the complainant organization has no representative organizations of employers in its membership in Republika Srpska, and there is no information on its activities on the territory; and (xii) the complaint is unfounded and should be rejected.
4. 255. The Committee notes that, under the Labour Act of Republika Srpska as revised up to 2007: (i) an association of employers is considered “most representative” at the national level, if it has as members at least 20 per cent of the total number of employers at the national level and if these employers employ not less than 20 per cent of the total workforce at the national level (section 146); (ii) the representativeness of an employers’ association at the level of Republika Srpska or a branch or activity shall be established by the Minister upon the proposal of the tripartite Board for Determining the Representativeness of Trade Unions and Employers’ Associations; (iii) an employers’ association shall submit a request related to the establishment of its representativeness pursuant to section 146 to the Board (section 151); (iv) the most representative trade union(s) and the most representative association(s) of employers shall participate in the process of collective bargaining, social dialogue and consultations with partners at the level of their organization and activities (section 156); (v) parties at the conclusion of a collective agreement at national level are: the Government of Republika Srpska; the most representative trade union(s) organized at the level of the Republic; and the most representative association(s) of employers organized at that level (section 161); (vi) the Economic and Social Council consists of nine members, of which three members appointed by the government, three by the most representative union of the Republic and three by the most representative employers’ association in the Republic (section 170); and (vii) the Council aims at establishing and developing social dialogue on issues of importance to the realization of economic and social interests of workers and employers; discusses and takes positions on issues of development and improvement of collective bargaining; and provides opinions and suggestions on draft laws and other regulations of importance for the economic and social interests of employees and employers (Economic and Social Council Act).
5. 256. The Committee observes that the twofold threshold of 20 per cent, which has been laid down in the Republika Srpska Labour Act and denounced by the complainant as a violation of the right of employers to establish organizations of their own choosing, does not set a minimum membership requirement in order to be able to form an employers’ organization. The Committee understands that, according to section 146 of the Labour Act, an association of employers has to meet this requirement in order for it to be deemed representative at the national level. This requirement thus rather constitutes the criterion on which the determination of the most representative employers’ association(s) at the level of Republika Srpska is based. The Committee further observes that, according to sections 156, 161 and 170, a national employers’ organization meeting this twofold minimum requirement is recognized as most representative for the purposes of collective bargaining, consultations and social dialogue (for example, within the framework of the Economic and Social Council).
6. 257. In this regard, the Committee recalls that it has always considered that the mere fact that the law of a country draws a distinction between the most representative trade union organizations and other trade union organizations is not in itself a matter for criticism. Such a distinction, however, should not result in the most representative organizations being granted privileges extending beyond that of priority in representation, on the ground of their having the largest membership, for such purposes as collective bargaining or consultation by governments, or for the purpose of nominating delegates to international bodies. In other words, this distinction should not have the effect of depriving trade union organizations that are not recognized as being among the most representative of the essential means for defending the occupational interests of their members, for organizing their administration and activities and formulating their programmes, as provided for in Convention No. 87. The fact of establishing in the legislation a percentage in order to determine the threshold for the representativeness of organizations and grant certain privileges to the most representative organizations (in particular for collective bargaining purposes) does not raise any difficulty provided that the criteria are objective, precise and pre-established, in order to avoid any possibility of bias or abuse. The Committee has considered, with regard to legislation establishing a system for determining representitivity, that granting the right to sit on the Economic and Social Council only to those trade union organizations deemed to be the most representative would not appear to influence workers unduly in the choice of organization that they wish to join, nor to prevent less representative organizations from defending the interests of their members, organizing their activities and formulating their programmes [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, paras 346, 356 and 357]. The Committee also wishes to draw the Government’s attention to the duty to consult all social partners likely to be affected by the adoption and application of legislation concerning representativeness of organizations.
7. 258. In light of the above, the Committee considers that the twofold minimum percentage laid down in the Republika Srpska Labour Act is capable of constituting an objective and precise pre-established criterion to determine the representativeness of employers’ associations of voluntary affiliation. It also considers that the privileges granted to the employers’ associations recognized as the most representative, namely the entitlement to be a member of the Economic and Social Council and entitlement to negotiate and conclude a collective agreement at the level of Republika Srpska, are justified by their having the largest membership and do not seem to have the effect of denying the right of minority organizations to perform their activities and formulate their programmes. Noting the divergent views of the complainant and the Government of Republika Srpska regarding the independence of a national employers’ association recognized as most representative, the Union of Associations of Employers of Republika Srpska, the Committee, while highlighting the importance it attaches to the independence of the parties to collective bargaining, points out that it does not have any elements at its disposal to enable it to call into question the independence of the union.
8. 259. As regards the indication of both the complainant and the Government of Republika Srpska that, during the initial determination of the representativeness of trade unions and employers’ associations at the level of Republika Srpska in 2008, the union affiliated to the complainant organization, ECRS, did not apply for the establishment of representativeness, the Committee expects that the employers’ organization is entitled to submit a request to that effect at any point in time when it considers that it meets the requirements. Observing that representativeness is established by a tripartite body and that aggrieved parties may file before that body a request concerning the revision of validated representativeness, the Committee requests the Government to ensure that the Government of Republika Srpska provides information as to whether the decisions of this body may be appealed through a rapid and effective judicial procedure.

The Committee’s recommendation

1. 260. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • The Committee requests the Government to ensure that the Government of Republika Srpska provides information as to whether the decisions of the tripartite Board for Determining the Representativeness of Trade Unions and Employers’ Associations may be appealed through a rapid and effective judicial procedure.