Definitive Report - Report No 380, October 2016

Case No 2958 (Colombia) - Complaint date: 25-MAY-12 - Closed

Allegations: The complainants allege that the pension clauses of a collective enterprise agreement in the oil sector have not been implemented since 31 July 2010, and that the pension scheme for former employees of a company in the telecommunications sector has been changed unilaterally in violation of the collective enterprise agreement

1. 275. The complaint is contained in a communication dated 25 May 2012 from the Single Confederation of Workers of Colombia (CUT) and the Workers’ Trade Union Confederation of the Oil Industry (USO), communications dated 1 October 2013, and 26 February and 2 May 2016 from the USO, and a communication dated 4 February 2014 from the National Association of Telephone and Communications Engineers (ATELCA).
2. 276. The Government sent its observations in communications dated 23 August 2013 and 3 March, 28 April and 22 October 2014.
3. 277. Colombia 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), the Labour Relations (Public Service) Convention, 1978 (No. 151), and the Collective Bargaining Convention, 1981 (No. 154).

A. The complainants’ allegations

Failure to award new conventional retirement pensions in a company in the oil sector as from 31 July 2010

1. 278. In a communication dated 25 May 2012, the CUT and the USO report that Ecopetrol SA (hereinafter “the oil company”) and the State of Colombia have violated the provisions of a collective agreement awarding the oil company’s employees a conventional old-age pension, which was signed by the USO and the oil company in 2009. The complainants maintain that the alleged violation of the agreement is contrary to Article 4 of ILO Convention No. 98. On this point, the complainants maintain that: (i) since 1970, all of the collective agreements signed by the company and the USO have contained retirement clauses awarding employees a company old-age pension; (ii) like its predecessors, the collective agreement signed in 2009, which remained in force until June 2014, contains provisions – particularly in article 109 – that establish the modalities for the conventional pensions to which the oil company’s employees are entitled; (iii) since 31 July 2010, although this clause of the agreement was still in force, the oil company has refused to award new conventional pensions on the grounds that Legislative Act No. 1 (2005) had modified the national pension scheme by amending the Constitution, excluding old-age pensions from the scope of collective bargaining; (iv) no action has been taken on the written complaints submitted to the Ministry of Labour and the Ministry of Finance; and (v) while some lower court judges have ruled that the tutela proceedings brought by the employees were admissible, the Constitutional Court has declared them inadmissible on the grounds that the dispute should have been brought before a lower labour court instead.
2. 279. The complainants also maintain that: (i) under the ILO Conventions on freedom of association and collective bargaining that Colombia has ratified, the issue of pensions cannot be excluded from the scope of collective bargaining; (ii) the right to a conventional pension is an acquired right of the oil company’s employees and is protected both by the country’s Constitution and by ILO Convention No. 98; (iii) paragraph 109 of the agreement was in force prior to 31 July 2010, is still in force and should therefore be implemented; (iv) while Legislative Act No. 1 (2005) amending article 48 of the Constitution states that lawfully acquired rights must be respected, its content contradicts and flagrantly violates this principle by establishing that, as from 31 July 2010, conventional pension clauses shall be null and void; and (v) the recommendations made by the Committee on Freedom of Association in Case No. 2434 are fully applicable to this case and must be followed by the Colombian authorities; this entails payment of a conventional company pension.
3. 280. The complainants add that the company has a special fund for the payment of conventional pensions, which currently contains 13,000 billion (13,000,000,000,000) Colombian pesos (COP); thus, the conventional pension scheme is financially sustainable. They indicate that under Colombian law, the money deposited in this fund constitutes a parafiscal contribution that belongs neither to the employer nor to the State nor to the employee in so far as it has a specific purpose: the payment of conventional pensions. Pursuant to Convention No. 98, and as requested by the Committee on Freedom of Association in Case No. 2434, the State has a duty to promote an agreed solution.
4. 281. In a communication dated 1 October 2013, the USO states that the failure to implement conventional pension clauses is one example of an extremely negative attitude towards the rights of pensioners, as seen from: (i) the Colombian Pension Administration (Colpensiones) Circular No. 4 (2013); the complainants state that Colpensiones is the highest level social security body on pensions and that the mentioned Circular unlawfully applies to all pensions a Constitutional Court decision (No. C-258 (2013)) concerning the pensions of members of Congress, which renders legislation allowing for special and transitional schemes null and void; and (ii) the unilateral transfer of the pensions of 4,000 employees of the Bogotá Telecommunications company (ETB) (hereinafter “the telecommunications company”) from the public to the private sector by the national pension management body without authorization from the employees concerned sets a precedent that could affect the oil company’s pensioners in the future.
5. 282. In a communication sent in February 2016, the USO states that the allegations and requests that it presented in 2012 are more relevant and urgent than ever in light of the erosion of pensioners’ rights in Colombia. It therefore requests that a preliminary contact mission be established as part of the consideration of this case. The complainant also maintains that: (i) three groups lie outside the scope of the Social Security Act (Act No. 100 (1993)): members of the military, teachers and the oil company’s employees; (ii) while the State has protected the pension rights of workers in the first two of these categories from the impact of Legislative Act No. 1 (2005), including through an agreement signed by the teachers’ union and the authorities, the issue of the oil company’s employees has yet to be resolved; (iii) while Constitutional Court Judgment SU 555 (2014) on the impact of Legislative Act No. 1 (2005) refers to the recommendations of the Committee on Freedom of Association in Case No. 2434, it does not provide for their implementation and prohibits the consolidation of conventional pension rights as from 31 July 2010.
6. 283. In the same communication, the complainant refers to the Attorney General’s Opinion No. DTSS 001716 of February 2016 on the pension rights of Social Security Institute employees. The complainant states that, based on the aforementioned Judgment No. SU 555 (2014), the Attorney General stated that conventional pension clauses could remain in force after 31 July 2010, if it was the manifest will of the parties that they continue to apply after that date. The complainant considers that article 109 of the collective enterprise agreement meets this requirement by providing that “the company shall continue to award the lawful lifelong retirement or old-age pension”; this constitutes a mandate for the future.

Pension transfer by a company in the telecommunications sector

1. 284. In a communication dated 4 February 2014, ATELCA alleges that the telecommunications company and the Ministry of Labour are not implementing the pension clauses in the collective enterprise agreement not only because, as with the first allegation in this case, no new conventional pensions have been awarded since 31 August 2010, but also because the telecommunications company and the Ministry have unilaterally transferred the pensions of the company’s former employees from the public to the private sector without their authorization through a “pension transfer” mechanism. In this regard, the complainant states that: (i) since 1972, the telecommunications company’s collective agreements have made provision for a conventional pension with two modalities for receiving it (no age requirement for employees with 25 years of service or, for those aged 50 and over, 20 years of service); (ii) in the most recent agreement, signed in 2013, the pension clauses were not repealed; thus, under article 478 of the Labour Code, they remain fully applicable; (iii) in 2003, the telecommunications company established a fund for the discharge of its pension liability; (iv) this fund currently contains COP1,375 billion; this ensures the sustainability of the conventional pension scheme and enables the telecommunications company to pay pensions directly; (v) in 2012, at the company’s request, the Ministry of Labour authorized a pension transfer whereby the Social Security Institute assumed the telecommunications company’s payment obligation; (vi) on 7 December 2012 and 28 May 2013, however, the telecommunications company’s board of directors stated that the pensions would be transferred not to the Social Security Institute but to a private insurance company, Positiva Compañía de Seguros SA (hereinafter the “insurance company”), which administers the private pension scheme (Colombia has two parallel pension schemes: an average premium scheme with defined benefits (the public scheme) and an individual savings scheme (the private scheme); (vii) although the telecommunications company is not undergoing liquidation or restructuring, the pension scheme’s members were not asked to give their express consent to the aforementioned transfer; this violates the rules on pension transfer; (viii) the telecommunications company stated on its website that it had decided to transfer its pension liability and that, as from 6 September 2013, pensions would be handled “through a life annuity, managed by the insurance company, or a programmed retirement scheme”; in Colombia, these are two types of individual savings scheme; (ix) while the insurance company is a State entity, it manages the individual savings scheme, not the average premium scheme with wage-based defined benefits; (x) letter dated 28 August 2013, 971 of the telecommunications company’s pensioners stated that they had not authorized a transfer of, or change in the pension scheme; and (xi) the telecommunications company, with the support of the Colombian Government, has ignored this objection.
2. 285. For the aforementioned reasons, the complainant states that not only have the conventional pension clauses not been implemented since Legislative Act No. 1 entered into force in 2005 – a fact that resulted in the presentation of Case No. 2434 to the Committee – but it is feared that the aforementioned pension transfer may be the first step towards a breach of the obligation to pay pensions that have already been consolidated as provided in the collective agreement. Pursuant to ILO Conventions Nos 87, 98 and 154, rights acquired under an agreement by employees who have consolidated their entitlement to a conventional pension must be protected, and these employees must not be transferred to an individual savings scheme without their authorization. The complainant adds that all pension matters must be agreed with the pensioners’ representatives – who, in the case of conventional pensions, are the trade unions signatory to the agreement – and any change in a conventional pension must be made not unilaterally, but by agreement between the signatories.

B. The Government’s reply

Failure to award new conventional retirement pensions in a company in the oil sector as from July 2010

1. 286. Concerning the first aspect of the case (failure to implement the pension clauses contained in the Ecopetrol SA collective agreement as from 31 August 2010, allegedly violating ILO Convention No. 98), the Government, in a communication dated 23 August 2013, states that the failure to award conventional pensions as from 31 August 2010 is consistent with paragraph 2 and the third provisional paragraph of Legislative Act 1 (2005): (i) paragraph 2: “With effect from the entry into force of this Legislative Act, pension arrangements other than those set out in the General Pension System legislation cannot be established by accords, collective labour agreements, awards or legal acts of any kind”; and (ii) third provisional paragraph: “The pension rules contained in legitimately concluded accords, collective agreements, awards or agreements and in force as at the date of entry into force of this Legislative Act shall remain in force for the term originally agreed. Accords, agreements or awards signed between the entry into force of this Legislative Act and 31 July 2010, may not establish more favourable pension conditions than those currently in force. In any event, they shall become null and void on 31 July 2010.”
2. 287. The Government states that, in light of the foregoing: (i) pension benefits established in collective agreements remained in force until the end of the term originally agreed, or of the period of their extension as provided in article 478 of the Labour Code, but not beyond 31 July 2010, when, in accordance with a provision of the Constitution, they became null and void; (ii) the aforementioned paragraphs of the Legislative Act had no impact on the acquired rights of pensioners or the legitimate expectations of individuals who would soon meet the conventional criteria for retirement since they were given five years from the entry into force of the Legislative Act in which to meet those criteria and avail themselves of the conventional pension scheme; (iii) this position has been confirmed by both the Supreme Court and the Constitutional Court; and (iv) in light of the foregoing, it is logical that the company has not awarded any new conventional pensions since 31 August 2010.
3. 288. In a communication dated 28 April 2014, the Government sent the company’s observations, stating that: (i) Colpensiones Circular No. 4 (2013), to which the complainants object, establishes the basic legal pension requirements in accordance with the case law of the Constitutional Court; (ii) pursuant to Legislative Act No. 1 (2005), the pension rules contained in the company’s collective agreement remained in force until 31 July 2010; and (iii) those of the oil company’s employees who had no pension rights as at 31 July 2010, were required by law to join the General Pension Scheme.
4. 289. More broadly, the Government states that the restrictions on collective bargaining established in Legislative Act No. 1 (2005), which the Committee has already examined in Case No. 2434, do not disregard the ILO Conventions on freedom of association and collective bargaining that Colombia has ratified since recognition of the collective rights of employees and their organizations in these Conventions does not prevent domestic law from being adjusted in order to ensure the financial health and equity of the pension scheme.

Transfer of pensions by a company in the telecommunications sector

1. 290. Concerning the second element of this complaint, the pension transfer carried out by the telecommunications company, whereby an insurance company assumed the telecommunications company’s pension liability, the Government first sent the company’s reply in a communication dated 22 October 2014. The telecommunications company began by explaining the decision-making process that had led to the pension transfer: (i) according to Decree No. 1260 (2000), the pension transfer is not merely a mechanism for ensuring future discharge of the pension liability of private companies undergoing insolvency proceedings or restructuring; it is becoming a tool that all companies can use in order to discharge such liability; (ii) the decision to transfer the telecommunications company’s pension liability was taken at a shareholders’ meeting held on 20 November 2012; (iii) on 7 December 2012, the board of directors approved the transfer of the telecommunications company’s full pension liability to Positiva Compañía de Seguros SA; (iv) before these internal decisions were taken, the required external authorizations were obtained from the Ministry of Labour on 3 May 2012 and the Supervisory Authority for Companies on 12 May 2012; (v) this procedure was fully consistent with the legislation in force, which establishes that employers themselves may decide whether to transfer pension liability to an insurance company or to Colpensiones and that voluntary pension transfer is a unilateral act to be carried out at the sole discretion of the company; and (vi) notwithstanding the foregoing, before the transfer was carried out, the telecommunications company engaged in a process of outreach, dissemination and consultation on the pension transfer, including at two meetings with the company’s two trade unions, ATELCA and the Trade Union of Workers of the Bogotá Telecommunications Enterprise (SINTRATELEFONOS) – as well as with the Bogotá Telecommunications Enterprise Pensioners’ Association (APETB), held on 13 and 28 November 2012.
2. 291. Additionally, the company mentions the impact of the transfer on the pension rights of its former employees, stating that: (i) transfer of a company’s pension liability does not change either the nature or the content of those employees’ pension rights; (ii) from the pensioners’ point of view, the only change is in the entity that pays the benefits; (iii) in the case of the telecommunications company, the average pension scheme (a public pension scheme based on the former employee’s wages) of which the pensioners are members has not changed; it is still part of the General Pension Scheme and is administered by Colpensiones; (iv) the pension transfer carried out by the telecommunications company also entails the establishment of a life annuity with an insurance company in order to ensure the lifelong income to which the pension rights of the company’s former employees entitle them; (v) after the transfer, the insurance company will pay pensions under the same terms as those formerly practised by the telecommunications company through a life annuity that preserves pensioners’ rights and maintains the current level of services; and (vi) thus, the telecommunications company has not undermined pension rights or unilaterally chosen a pension scheme since the pension transfer has no impact on former employees’ right to the average premium pension handled by the General Pension Scheme, which is still compatible with the conventional pension that was transferred.
3. 292. The Government then makes its own observations on the pension transfer carried out by the telecommunications company, stating that: (i) the law allows any companies with a pension liability to make voluntary use of the lawful mechanisms for standardizing this liability, and to choose the company to which they will transfer it without the need for the pensioners’ or former employees’ consent; (ii) it is for the employer to choose the entity with which the transfer will be carried out, which may be the Social Security Institute (now Colpensiones), an insurance company through a life annuity, or a pension fund administrator through programmed retirement; (iii) the pension transfer does not change either the nature of the pensions or the content of the pensioners’ rights, but only the entity that pays the benefits; (iv) it was perfectly legal for the telecommunications company to choose the option of a life annuity through an insurance company; and (v) the insurance company will make lifelong monthly payments to pensioners under the terms originally practised by the telecommunications company in awarding retirement pensions.

The Committee’s conclusions

1. 293. The Committee observes that this case concerns allegations that the clauses of a collective enterprise agreement in the oil sector that provide for an old-age pension have not been implemented since 31 July 2010, and that the pension scheme for former employees of a company in the telecommunications sector has been changed unilaterally in violation of the collective enterprise agreement.

Failure to award new conventional retirement pensions in a company in the oil sector as from 31 July 2010

1. 294. With regard to the first element of this case, the Committee first notes that, according to the complainants, (i) since 31 August 2010, Ecopetrol SA (hereinafter “the oil company”) and the public authorities have refused to award conventional pensions to employees who have recently met the pension requirements established in the collective enterprise agreement; (ii) however, the company has substantial funds that ensure the sustainability of the conventional pension and the money deposited in this fund constitutes a parafiscal contribution that belongs neither to the employer nor to the State; (iii) the failure to award conventional pensions is based on Legislative Act No. 1 (2005), which excludes old-age pensions from the scope of collective bargaining and provides that conventional clauses concerning such pensions shall be null and void as from 31 July 2010; (iv) application of the Legislative Act constitutes a direct violation of the provisions of the company’s collective agreement, signed in 2009 and in force until 2014, article 109 of which states that the company shall continue to award the lawful lifelong retirement or old-age pension – equivalent to 75 per cent of the average wage earned during the last year of service – to employees who meet the criteria established in that article; (v) violation of the pension clause of an agreement currently in force is a clear violation of ILO Convention No. 98 and of the recommendations made by the Committee on Freedom of Association in Case No. 2434 with regard to Legislative Act No. 1 (2005) and undermines the rights acquired by employees through collective bargaining; and (vi) pursuant to Convention No. 98, and as requested by the Committee on Freedom of Association, the State has a duty to promote an agreed solution to this dispute.
2. 295. The Committee also takes note of the Government’s statement that: (i) the oil company’s failure to award new conventional pensions as from 31 July 2010 is fully consistent with the provisions of Legislative Act No. 1 (2005) amending article 48 of Colombia’s Constitution, and with the relevant case law of the Supreme Court and the Constitutional Court; (ii) pursuant to the aforementioned Legislative Act, pension benefits established in collective agreements signed prior to the entry into force of the amendment to the Constitution remained in force until the end of the term originally agreed, or of the period of their extension as provided in article 478 of the Labour Code, but not beyond 31 July 2010, when they became null and void; (iii) accords, agreements or awards signed after the entry into force of the Legislative Act may not establish more favourable pension conditions than those provided by law; (iv) the aforementioned provisions had no impact on the acquired rights of pensioners or the legitimate expectations of individuals who would soon meet the conventional criteria for retirement since they were given five years as from the entry into force of the Legislative Act in which to meet those criteria and avail themselves of the conventional pension scheme; and (v) the ILO Conventions on freedom of association and collective bargaining that Colombia has ratified are not being disregarded since these Conventions do not prevent domestic law from being adjusted in order to ensure the financial health and equity of the pension scheme.
3. 296. In light of the foregoing, the Committee observes that this complaint concerns, first, a company’s failure to award new conventional pensions as from 31 August 2010 although the collective agreement that it signed in 2009, which remained in force until 2014, included clauses establishing its former employees’ right to a pension. The Committee also observes that the failure to award conventional pensions arises from the application of Legislative Act No. 1 (2005), pursuant to which accords, agreements or awards signed after the entry into force of the Legislative Act may not establish more favourable pension conditions than those provided by law. On this point, the Committee recalls, that, as noted by the complainants and the Government, it had occasion to rule on the compatibility of the aforementioned Legislative Act with the principles of freedom of association and collective bargaining in Case No. 2434 and, on that occasion, made the following recommendations: (i) with regard to agreements concluded prior to the entry into force of the legislation, the Committee requested the Government to adopt the necessary measures to ensure that collective agreements containing pensions clauses, which were valid beyond 31 July 2010, remained in effect until their expiry date; (ii) with regard to agreements concluded after the entry into force of Legislative Act No. 1 (2005), it requested the Government, in view of the particular circumstances of this case and in order to ensure harmonious industrial relations in the country, to hold new in-depth consultations on retirement and pensions, exclusively with the social partners, in order to find a solution acceptable to all the parties concerned in accordance with the Conventions on freedom of association and collective bargaining ratified by Colombia, in particular ensuring that the parties involved in collective bargaining could improve the legal provisions on retirement and pension schemes by mutual agreement [see Report No. 349, March 2008, para. 671].
4. 297. Observing that the failure to implement the pension clauses in the agreement signed by the USO and the oil company arises directly from the application of Legislative Act No. 1 (2005), the Committee reaffirms the full validity of its recommendations in Case No. 2434. Recalling that the voluntary negotiation of collective agreements, and therefore the autonomy of the bargaining partners, is a fundamental aspect of principles of freedom of association [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 925], the Committee requests the Government, in consultation with the social partners, to assess the reforms needed in order to ensure that the existence of a general mandatory pension scheme and the objective of its financial health are compatible with respect to the principle of collective bargaining on pensions.

Transfer of pensions by a company in the telecommunications sector

1. 298. With regard to the second element of this case, the Committee notes that, according to the complainants: (i) since 1972, the collective agreements of the Bogotá Telecommunications company (hereinafter “the telecommunications company”) have made provision for the award of a conventional pension; (ii) although, pursuant to Legislative Act No. 1 (2005), no new conventional pensions have been awarded since 31 July 2010, those awarded prior to that date are still being paid; (iii) a fund, which currently contains COP1,375 billion, ensures the sustainability of the aforementioned conventional pension and enables the company to pay pensions awarded prior to 31 July 2010 directly; (iv) in November 2012, with authorization from the Ministry of Labour but without the consent of the pensioners or their representative organizations, the telecommunications company carried out a “pension transfer” to an insurance company; (v) thus, the funds allocated for payment of the conventional pensions were transferred to the insurance company, which will henceforth be responsible for paying the pensions; (vi) however, since the insurance company manages the individual savings scheme, not the average premium scheme with wage-based defined benefits, the pension transfer will entail paying pensioners a life annuity; this constitutes a change in the pension scheme that violates the provisions of the collective agreement; and (vii) consequently, the pension transfer carried out unilaterally by the telecommunications company does not meet the requirement that any decision on pension matters be agreed with the pensioners and their representative organizations, and that any change in a conventional pension be made by agreement between the signatories to the agreement.
2. 299. The Committee also takes note of the following observations by the telecommunications company and the Government: (i) transfer of a pension liability changes neither the nature nor the content of those employees’ pension rights; the only change is in the entity that pays the benefits; (ii) the pension transfer carried out by the company was authorized by the Ministry of Labour in May 2012 and is fully consistent with the legislation in force, which does not require pensioners’ consent; (iii) the company nevertheless held two outreach, dissemination and consultation meetings with its trade unions in November 2012; (iv) by law, it is for the employer to choose the entity with which the transfer will be carried out, which may be the Social Security Institute (now Colpensiones), an insurance company through a life annuity, or a pension fund administrator through programmed retirement; (v) it was perfectly legal for the telecommunications company to choose the option of a life annuity through an insurance company; (vi) as a result of the transfer, the insurance company will make monthly payments to pensioners in the form of a life annuity under the terms originally practised by the telecommunications company in awarding retirement pensions; and (vii) the pension transfer has no impact on the right of former employees to the average premium pension handled by the General Pension Scheme, which is still compatible with the conventional pension that has been transferred.
3. 300. In light of the foregoing, the Committee notes that the complainant, the Government and the telecommunications company agree that the company has transferred the funds for payment of the old-age pension established in its collective agreement to an insurance company so that the latter could handle payment of a life annuity to pension recipients. The complainants allege that this transfer of responsibility also entails a transfer from the public to the private pension scheme, in violation of the provisions of the collective agreement, and that the decision to carry out the pension transfer should have been taken in consultation with the pensioners and their representative organizations.
4. 301. Concerning the allegation that a unilateral change in the pension scheme as a result of the transfer violated the collective agreement, the Committee notes that both the telecommunications company and the Government maintain that the pension transfer entails only a change in the entity that pays pension benefits and in no way alters the pension scheme or the rights of pensioners, which remain unchanged. In particular, the Committee takes note of the company’s statement that, even prior to the transfer, its old-age pension entailed payment of a life annuity in addition to the legal old-age pension and that the transfer has no impact on former employees’ receipt of the average premium pension handled by the General Pension Scheme. On this point, the Committee would like to recall 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 [see Digest, op. cit., para. 940]. In the specific case under consideration, noting that there are conflicting accounts of the impact of the pension transfer on the pension scheme as applied to the recipients of conventional pensions and the fact that the complainants have not provided concrete evidence of the alleged change in the pension scheme, the Committee does not have sufficient information to determine whether the collective agreement was violated. Under the circumstances, the Committee will not pursue the examination of this allegation.
5. 302. Concerning the alleged failure to hold consultations on the pension transfer with the organizations representing the recipients of conventional pensions, including the company’s two trade unions, the Committee takes note of the Government’s statement that by law the transfer of a pension does not require the pensioners’ consent and that it is for the employer to choose the entity with which the transfer will be carried out. The Committee also notes that, according to the company, it held two outreach, dissemination and consultation meetings with its trade unions in November 2012.
6. 303. The Committee recalls that it has often emphasized the importance of holding meaningful consultations with representative workers’ and employers’ organizations before taking decisions that affect their economic and social interests. In this regard, the Committee considers that the social partners should also be consulted where the employer’s decision affects the handling of the old-age pensions of its current and former employees. In the case under consideration, the Committee observes that while the company organized meetings with its trade unions, these meetings were held after the decision to transfer the pensions had been taken. In light of the foregoing and taking into account the consequences that these types of measures may have in the future, the Committee invites the Government to take the necessary measures to ensure that prior consultations with the representative social partners are held before decisions with an impact on the management of employees’ old-age pensions are taken at the State or company level.

The Committee’s recommendations

1. 304. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee requests the Government, in consultation with the social partners, to assess the reforms needed in order to ensure that the existence of a general mandatory pension scheme and the objective of its financial health are compatible with respect for the principle of collective bargaining on pensions.
   • (b) The Committee invites the Government to take the necessary measures to ensure that prior consultations with the representative social partners are held before decisions with an impact on the management of employees’ old-age pensions are taken at the State or company level.