Interim Report - Report No 386, June 2018

Case No 3242 (Paraguay) - Complaint date: 13-SEP-16 - Active

Allegations: the complainant organizations allege dismissals and the refusal by the Ministry of Labour to recognize and approve a trade union, thereby favouring the member of Parliament owning the company concerned

1. 553. The complaint is contained in two communications from the Authentic Central Confederation of Workers (CUT-A) dated 24 May and 13 September 2016.
2. 554. The Government sent its reply in a communication dated 31 October 2017.
3. 555. Paraguay 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 complainants’ allegations

Union of Drivers and Employees of the La Limpeña Transport Company (Bus company 1)

1. 556. In their communication dated 24 May 2016, the complainant organizations indicate that on 24 June 2015, two days after the Union of Drivers and Employees of the La Limpeña Transport Company was established, 40 members of the union were dismissed from the company on anti-union grounds and the administrative authority refused to register the union, acting in favour of the company owner, Mr Celso Maldonado, a member of the Paraguayan Parliament.
2. 557. The complainant organizations explain that because of their poor working conditions the transport company workers agreed on 9 June 2015 to convene a general assembly to establish a trade union. The assembly took place on 22 June 2015 with the attendance of 51 workers, the trade union was established, its constitution was adopted and its executive committee elected. The complainants indicate that on the day of the general constituent assembly, the union’s executive committee sent a telegram to the company management informing them accordingly. However, the latter allegedly failed to acknowledge receipt of the telegram until 27 June 2015.
3. 558. The complainant organizations allege that on 24 June 2015, two days after the general constituent assembly, the company dismissed the trade unionists with the sole objective of depriving the union of the requisite minimum of 20 members, as stipulated by section 292 of the Labour Code. The complainants indicate that: (i) ten trade unionists, including union leaders, were dismissed without a valid reason by the company, 24 union members were dismissed for dereliction of duty, three had their employment contracts suspended, five reportedly resigned from the union and the company claimed that three members were not its employees; (ii) on 15 August 2015, the company submitted a request to make payments on deposit for the ten union members dismissed without a valid reason, since the latter allegedly declined the proposed severance pay, and it filed an action to justify the grounds for dismissal against Mr Julio Osvaldo Maisana, Mr Antonio Jara, Mr Rafael Andino Bogado and another 22 members for unjustified mass dereliction of duty; (iii) 44 workers filed complaints against the company for dismissal; and (iv) in response to the anti-union dismissals that took place on 24 June 2015 and in view of the unwillingness of the Ministry of Labour, Employment and Social Security to approve the registration of the union, 23 union members, including the general secretary and the records secretary, decided to hold a crucifixion protest opposite the ministry building.
4. 559. The complainant organizations indicate that the Ministry of Labour convened a round table for settling the dispute between the company and the trade union. The documentation sent by the complainants shows that: (i) the representatives of the company did not attend the first meeting on 20 July 2015; (ii) at the second meeting, on 21 July 2015, the company representative said that the situation of the first ten dismissed workers was non-negotiable but indicated the possibility of dialogue regarding the other dismissed trade unionists; (iii) during the meeting of 4 August 2015, the signature of the president of the Paraguayan Transport Workers’ Federation was allegedly forged, whereupon the president filed a complaint with the Public Prosecutor’s Office.
5. 560. According to the complainant organizations, the action of the Ministry of Labour was politically motivated. They indicate that: (i) on 17 July 2015, the company asked the Ministry to reject the application for provisional registration of the trade union on the grounds that the minimum number of members had not been attained; (ii) on 23 July 2015, the Legal Advice Department at the Ministry of Labour stated in opinion No. 796/2015 that in order to obtain provisional registration the union needed to rectify some defects in terms of form, attach a copy of the record of the constituent assembly and amend the union’s constitution, although the opinion did not include the objection made by the company; (iii) on 17 August 2015, the union responded to the objections made by the company and the Legal Advice Department regarding its provisional registration; these communications show that the union considers that it met all the formal legal requirements, it denies that it failed to inform the company management of the establishment of the union until 27 June 2015 or that it admitted individuals from outside the company as members of the union; (iv) on 4 September 2015, the Legal Advice Department issued opinion No. 1088/2015 indicating that the union had still not fully met all the requirements referred to previously and again asked the union to send the original and a certified copy of the act of constitution, to send information on the members who attended, and to communicate the balance of the social funds; (v) on 17 September, the trade union sent the information requested in opinion No. 1088/2015 but indicated with regard to the certified copy of the act of constitution that the general secretary, Mr Miguel Garcete, and the records secretary, Mr Esteban Álvarez, were not in a position to provide signatures since both were participating in the crucifixion protest, and so authorization was given through the signatures of other members of the executive committee; (vi) on 15 October 2015, the Legal Advice Department indicated once again that Mr Miguel Garcete and Mr Esteban Álvarez, in their respective capacities as general secretary and records secretary, had to comply with section 294(a) of the Labour Code, and that to date they had not signed the certified copy of the act of constitution, “other persons having done so instead of them, without having explicit authorization to sign such documents”; (vii) on 20 October 2015, in a communication to the Labour Director-General, the union attached, in compliance with the abovementioned opinion issued in October, the certified copy of the act of constitution, and also the notarial act of confirmation and authorization of the general secretary and the records secretary, indicating that the latter “were unable to sign any required documents since their hands were nailed”, and authorizing the finance secretary, the legal affairs secretary and the disputes secretary to sign all necessary documents; (viii) on 19 November 2015, the Ministry of Labour, by decision No. 44, provisionally registered the union and gave the union 30 days to validate all the legal measures adopted prior to this date; (ix) on 7 December 2015, the general secretary and the records secretary, since they were no longer incapacitated, validated their previous measures; (x) on 17 December 2015, the company once again objected and called for the definitive registration of the union to be refused; and (xi) on 2 May 2016, the Ministry of Labour issued decision No. 257 setting forth the objections made against the definitive registration of the trade union, stating that “it was not valid to argue that at the time of the constituent assembly the dismissed individuals were workers of the company; rather, what was relevant was to determine the number of members remaining in the union further to the dismissals for various reasons”. The union appealed against this decision, calling for it to be declared null and void.
6. 561. The complainant organizations emphasize that the Ministry of Labour filed an appeal for amparo (protection of constitutional rights) against 17 members of the trade union, since its members had set up tents opposite the Ministry and a number of them had engaged in a crucifixion protest, thereby causing a breach of the peace and disrupting public services. The information sent by the complainants shows that on 10 November 2015 the Court of First Instance dismissed the amparo appeal, that decision was appealed against by the Ministry, and on 22 February 2016 the Agreements Division of the First Chamber of the Criminal Appeals Court in turn dismissed the Ministry’s appeal.

Union of Drivers and Employees of the Julio Correa Transport Company (Bus company 2)

1. 562. The complainant organizations allege that, in the context of a bidding process for the operation of route 51, the successful company refused for anti-union reasons to re-engage the workers of the Julio Correa Transport Company (the original licensed operator) and they denounce the lack of action by the Government in this respect.
2. 563. The complainant organizations explain that transport companies operate on the basis of government licences, and so the public transport service is provided through private operators. They emphasize that the original licensed operator had an established, active trade union, namely the Union of Drivers and Employees of the Julio Correa Transport Company. In October 2015, the Office of the Deputy Transport Minister launched a public bidding process for the provision of passenger transport services on route 51. Two companies submitted bids but one then withdrew, leaving the San Isidro Company (the new licensed operator) as the only bidder. According to the complainants, the licence for the route was awarded on condition that the successful company would hire all the drivers and workers employed by the original licensed operator. However, on 8 January 2016, at a meeting between the union leaders, the original operator and the new operator, the trade union was informed of a public instrument which stated that the employees of the original operator “approved and endorsed” the hiring of 25 per cent of the workers.
3. 564. The appendices and the allegations sent by the complainant organizations show that: (i) on 20 January 2016, the Deputy Labour Minister, in the context of the process to re-engage the former employees of the original licensed operator, requested the designation of representatives of the former employees to participate in the employer changeover process; (ii) on 26 January 2016, the trade union sent a list of representatives; (iii) on 17 February 2016, during a meeting with the Ministry of Labour, the Office of the Deputy Transport Minister and the management of the new licensed operator, the union gained access to the public instrument which legitimized the engagement of 25 per cent of the former employees and discovered its content to be fake; (iv) in February 2016, the union sent two requests to the Ministry of Labour and the Office of the Deputy Transport Minister to expedite procedures to enable it to become part of the committee on the re-engagement of former employees of the Julio Correa Transport Company; (v) on 18 February 2016, the union submitted a request for mediation under file No. 286/16 to the Ombudsman’s Office; (vi) on 3 March 2016, the Deputy Labour Minister, Mr Cesar Agusto Sagovia, informed the union, in reply to the requests to expedite procedures, that no union representative or former employee had participated in designing the re-engagement process or come forward during the 30-day employer changeover period; (vii) on 8 March 2016, Mr Miguel Rojas, the union’s general secretary, and Mr Remigio Segovia, the disputes secretary, filed a criminal complaint regarding the alleged faking of the document; and (viii) on 26 April 2016, the union filed an amparo appeal against the company calling for the re-engagement and reinstatement of 47 former workers. The complainants emphasize that, to date, the new operator has not hired any workers previously employed by the original operator, and they consider this to constitute a violation of freedom of association.

B. The Government’s reply

Bus company 1

1. 565. In its communication of 31 October 2017, the Government forwarded the information supplied by the Labour Directorate, in which the latter denies the allegations of the complainant organizations concerning the Ministry of Labour’s refusal to register or recognize the trade union. The Government indicates that, by decision No. 44 of 19 November 2015, the Ministry provisionally registered the union in accordance with the procedure established in section 300 of the Labour Code, the company made objections to this registration, and decision No. 257 was issued on 2 May 2016, setting out the objections to the provisional registration of the union.
2. 566. The Government indicates that the trade union appealed against the decision of the Ministry of Labour and that the case file was referred to the judiciary for processing. On 30 November 2016, the Labour Appeal Court declared null and void the procedural measures on which the appeal filed on 19 July 2016 was based, and also declared the appeal filed by the union to be null and void. Subsequently, on 11 August 2017, the Supreme Court of Justice rejected the union’s action to have the decision of the Labour Appeal Court declared unconstitutional, on the grounds that there was no indication of the alleged arbitrariness, that no specific infringement of constitutional provisions had been demonstrated, and no violation of the right of defence or due process had occurred.
3. 567. Furthermore, the Government sent note No. 294/17 of the register of employers and workers dated 27 March 2017, indicating that the company was registered until 2015. The Government rejects the allegation of lack of action to settle the dispute. Specifically, it indicates that the Collective Disputes Mediation Department attached to the Ministry of Labour convened two tripartite meetings for the purpose of addressing the situation of the transport company workers.
4. 568. Moreover, the Government forwarded the company’s reply indicating that the union had been recognized only provisionally, and that subsequently the company had made objections because it considered that there had been irregularities in the establishment of the union, thereby contravening the provisions of the Labour Code, and that it did not have a sufficient number of members.
5. 569. As regards the crucifixion protests held opposite the premises of the Ministry of Labour, the Government indicates that this type of demonstration does not involve the features of crucifixion associated with the Greek and Latin terms, that the state of health of the demonstrators was continuously monitored by doctors from the Ministry of Public Health and Social Welfare, and that the photos sent by the Government at the time of making a statement before the competent judge show the good physical condition of the demonstrators.

Bus company 2

1. 570. In its communication of 31 October 2017, the Government forwarded information provided by the Ministry of Labour, indicating that the last registered executive committee of the union dates from 4 March 2014, and sent the report of the Department for the Register of Employers and Workers, which shows that the original licensed operator submitted lists of employees up to 2015.
2. 571. The Government sent the reply of the new licensed operator referring to the court’s decision regarding the amparo appeal filed by the union. The new operator indicates that it can be seen from the copy of the amparo documentation that this case involves the new operator winning a public bidding process, that the workers employed by the original operator asked to be re-engaged by the successful company and that, through public instrument No. 30/10/2015, the successful company undertook to incorporate 25 per cent of these drivers and employees in its workforce. However, no employee came forward during the 30 day employer changeover period to undertake the necessary registration for the process of re-engagement of the former employees.
3. 572. Furthermore, the Government attached a copy of the amparo appeal filed by the trade union, which was declared inadmissible on 16 August 2016 on the grounds that the issue of the legitimacy of the public instrument was not a matter for the amparo proceedings, that another appropriate channel existed, that there had been no urgency, and that administrative and judicial procedures had not been exhausted. Subsequently, the trade union filed an appeal with the Court of Appeal for Children and Young Persons, and this was dismissed on 28 March 2017.
4. 573. As regards the current situation of the original licensed operator, the Government states that the aforementioned company was shut down by the board of the now defunct Secretariat of Transport of the Metropolitan Area of Asunción and has ceased to operate the route concerned since 2016, when the bidding process was completed and the operation of the route was awarded to a different company.
5. 574. In conclusion and with respect to both cases, the Government considers that there are no violations of the right of freedom of association, and that the State of Paraguay promotes the full exercise of freedom of association since this principle constitutes a fundamental element of the democratic system.

C. The Committee’s conclusions

Bus company 1

1. 575. The Committee observes that the complainant organizations report the mass dismissal of trade unionists at a public transport company on account of the establishment of the trade union and the unjustified refusal by the labour administrative authority to grant definitive registration to the union.
2. 576. The Committee observes that in its communication of 13 September 2016 the complainant organizations allege that: (i) the workers of the transport company were invited to attend a general constituent assembly on 22 June 2015 during which it was voted to establish a trade union; (ii) the executive committee of the union informed the company the same day that the union had been established but the company did not formally acknowledge receipt of this communication until 27 June 2015; (iii) on 24 June 2015, the transport company workers, all of whom were union members, were dismissed; (iv) as regards the provisional registration of the union, on 17 July 2015 the company called for the registration to be rejected, and from 23 July to 20 October 2015 the Legal Advice Department at the Ministry of Labour refused to process the registration of the trade union because of formal defects, which did not include the company’s objection regarding membership, and which were reportedly rectified by the union; (v) the Ministry of Labour filed an amparo appeal against the members of the union because the union members had decided to hold a demonstration opposite the ministry premises; (vi) on 19 November 2015, the Ministry granted provisional registration to the union subject to the validation of all previously taken legal measures, which was effected by the executive committee on 7 December 2015; (vii) on 17 December 2015, the company once again called for the definitive registration of the union to be refused; and (viii) on 4 May 2016, the Labour Director-General rejected the union’s application for definitive registration and rescinded its registration on the grounds that the employment of 42 of the 51 founding members of the union had been terminated through resignations or dismissals.
3. 577. The Committee observes that the complainant organizations also formulate various allegations of dismissal of trade union leaders and members on anti-union grounds. The Committee emphasizes that, according to the complainants, ten members of the executive committee were dismissed without a valid reason and 25 other workers were dismissed for mass dereliction of duty. In addition, the Committee note the complainants’ allegations indicating that the Ministry of Labour failed to act impartially, refusing to register the union with an objection to mere defects of form, and thereby favouring the owner of the company, who is a member of Parliament.
4. 578. Furthermore, the Committee notes the Government’s reply indicating that the Ministry of Labour at no time refused to recognize the trade union. As regards the Ministry’s decision regarding the definitive registration of the union, the Government indicates that the union appealed against this decision and that on 30 November 2016 the Labour Appeals Court declared the union’s appeal inadmissible. Furthermore, it notes the Government’s reply denying the alleged lack of action by the Collective Disputes Mediation Department, given that the Ministry convened tripartite meetings with a view to settling the dispute. Lastly, the Committee notes the company’s allegations, forwarded by the Government, indicating that there had been irregularities in the establishment of the union, involving persons from outside the company and an insufficient number of members.
5. 579. As regards the refusal to register the trade union, the Committee observes that on 19 November 2015 the Ministry of Labour granted provisional registration to the trade union – without taking account of the company’s allegation that there was an insufficient number of members and hence without highlighting this as a requirement that needed to be met – but that the registration was subsequently rescinded by a decision of the same administrative authority of 2 May 2016 on the grounds of failing to meet the requirement of 20 workers laid down in section 294 of the Labour Code. In this respect, the Committee considers that a minimum of 20 members to form a union does not seem excessive in this case. The Committee also observes that, according to the supporting documentation supplied by the complainant organizations, the union maintained an ongoing correspondence with the competent authorities and rectified all the defects of form which had been pointed out. The Committee observes that in decision No. 257 the administrative authority rejected the union’s application for registration on the basis that the criterion for determining the number of union members at the company was not the number of members at the time of the constituent assembly but the number of members remaining in the union after the terminations of employment for various reasons. The Committee observes that over ten months elapsed between the date of establishment of the union (24 June 2015) and the date of the administrative authority’s decision concerning the definitive registration of the union (2 May 2016). In this regard, the Committee recalls that a long registration procedure constitutes a serious obstacle to the establishment of organizations and amounts to a denial of the right of workers to establish organizations without previous authorization [see Compilation, op. cit., para. 463].
6. 580. As regards the dismissal of trade union leaders, the Committee notes that some 40 trade unionists in total – including at least 11 members of the executive committee – were dismissed two days after the constituent assembly was held. The Committee recalls that especially at the initial stages of unionization in a workplace, dismissal of trade union representatives might fatally compromise incipient attempts at exercising the right to organize, as it not only deprives the workers of their representatives, but also has an intimidating effect on other workers who could have envisaged assuming trade union functions or simply joining the union [see Compilation, op. cit., para. 1131]. While noting with regret that neither the complainant organizations nor the Government have provided detailed information on the labour grievances submitted by the dismissed workers and the outcome thereof, the Committee recalls that where cases of alleged anti-union discrimination are involved, the competent authorities dealing with labour issues should begin an inquiry immediately and take suitable measures to remedy any effects of anti-union discrimination brought to their attention [see Compilation, op. cit., para. 1159].
7. 581. Since it is unable to rule out the possibility that the delay in proceedings may have had a negative impact on the possibility of meeting the membership requirement (with a number of resignations having occurred in this space of time, further to the alleged acts of anti-union discrimination) and of securing the registration of the union and also on the enjoyment of trade union immunity by the executive committee, and observing that: (i) in its initial examination of the application for registration the authorities did not take account of the company’s objection with regard to attaining the minimum number of members; they did not include it in the list of issues to be resolved but referred to it subsequently in order to refuse registration; (ii) the reduction in the union’s membership was due to the dismissal of a large number of its members a few days after the constituent assembly; and (iii) since the Committee has no knowledge of whether the alleged anti-union motives for these dismissals were investigated, it requests the Government to keep it informed of any administrative or judicial proceedings in progress and to send copies of any decisions. Lastly, in view of the seriousness of the allegations of acts of anti-union discrimination carried out in the days following the establishment of the union, the Committee recalls that in cases of the dismissal of trade unionists on the grounds of their trade union membership or activities, the Committee has requested the Government to take the necessary measures to enable trade union leaders and members who had been dismissed due to their legitimate trade union activities to secure reinstatement in their jobs and to ensure the application against the enterprises concerned of the corresponding legal sanctions [see Compilation, op. cit., para. 1167]. The Committee requests the Government to conduct an investigation into these acts and to take the appropriate measures in consequence. The Committee requests the Government to keep it informed in this respect.
8. 582. Lastly, the Committee recalls that for many years the Committee of Experts has been observing the need to strengthen the legal provisions against anti-union discrimination, the lack of appropriate penalties for non-observance of the provisions concerning trade union immunity and interference in relation to workers’ organizations, and that the Committee of Experts asked the Government in the context of Case No. 3019 to hold consultations with the social partners concerning the establishment of mechanisms to guarantee effective protection against acts of anti-union discrimination, including rapid and impartial procedures, with provision for appeals and sufficiently dissuasive sanctions. The Committee hopes that the Government will send its observations on this matter without delay as part of the follow-up to Case No. 3019.

Bus company 2

1. 583. The Committee observes that in the present complaint the complainant organizations report that in the context of a bidding process the successful company refused to re-engage the employees of the original licensed operator on allegedly anti-union grounds and denounce the lack of action by the competent authorities in this respect.
2. 584. The Committee notes the allegations of the complainant organizations indicating that: (i) in October 2015, when the Office of the Deputy Transport Minister launched a bidding process for the operation of bus route 51, one of the conditions of the bidding process was reportedly that that the new licensed operator would give an undertaking to hire all the workers previously employed by the original licensed operator; (ii) during a meeting between the company that won the contract, the Ministry of Labour, the Office of the Deputy Transport Minister and the trade union, the latter was informed of the existence of a document allegedly agreed upon by the former employees approving the re-engagement of 25 per cent of the workers and decided to file a criminal complaint regarding the alleged faking of the document; (iii) on 20 January 2016, the Deputy Labour Minister, in the context of the process to re-engage the former employees, requested the designation of representatives of the former employees to participate in the employer changeover process, and the trade union sent its list; (iv) the union sent two requests to the Ministry of Labour and the Office of the Deputy Transport Minister to expedite procedures to enable it to become part of the committee on the re-engagement of former employees of the original licensed company; and (v) on 3 March 2016, the Deputy Labour Minister informed the union, in reply to the requests to expedite procedures, that no union representatives had participated formally in the re-engagement process and no former employee had come forward during the 30-day employer changeover period.
3. 585. The Committee also notes the Government’s observations indicating that: (i) the new licensed operator won the public bidding process, the employees of the original licensed operator then asked to be re-engaged by the successful company and, through public instrument No. 30/10/2015, the successful company undertook to incorporate 25 per cent of these drivers and employees in its workforce; (ii) no workers or union members came forward during the 30-day employer changeover period to undertake the necessary registration for the process of re-engagement of the former employees; (iii) the amparo appeal filed by the trade union in relation to the supposed forgery of signatures was dismissed by the competent authority in view of the existence of other appropriate channels; and (iv) the original licensed company was shut down and ceased to operate the route concerned as from 2016, when the bidding process was completed and the operation of the route was awarded to a different company.
4. 586. While noting the different versions relating to failure to re-engage the workers by the company that was successful in the bidding process, the Committee recalls that no person should be dismissed or prejudiced in employment by reason of trade union membership or legitimate trade union activities, and it is important to forbid and penalize in practice all acts of anti-union discrimination in respect of employment [see Compilation, op. cit., para. 1075]. The Committee also considers that the liquidation of a company and the fact that the legal person under which the company operated has ceased to exist should not be used as a pretext for anti-union discrimination nor should they be an obstacle to the competent authorities determining whether or not there were acts of anti-union discrimination and, if such practices are shown to have taken place, to sanctioning such illegal acts and ensuring that the affected workers are duly compensated [see Compilation, op. cit., para. 1115].
5. 587. Recalling that where cases of alleged anti-union discrimination are involved, the competent authorities dealing with labour issues should begin an inquiry immediately and take suitable measures to remedy any effects of anti-union discrimination brought to their attention [see Compilation, op. cit., para. 1159], with a view to determining whether or not there was anti-union discrimination in the reported occurrences, the Committee requests the Government to take the necessary steps to conduct an investigation without delay into the allegations of failure to re-engage the employees of the original licensed operator on anti-union grounds. Moreover, the Committee invites the complainant organizations, with a view to facilitating the investigation, to send the Government information on the allegedly anti union nature of the reported occurrences. The Committee requests the Government to keep it informed in this respect.

The Committee’s recommendations

1. 588. In the light of its foregoing interim conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) As regards the allegations concerning the refusal to register the Union of Drivers and Employees of the La Limpeña Transport Company and the alleged anti-union dismissals, the Committee requests the Government to keep it informed of any administrative or judicial proceedings in progress and to send copies of any decisions. In view of the seriousness of the allegations of acts of anti-union discrimination carried out in the days following the establishment of the union, the Committee requests the Government to conduct an investigation into these acts in accordance with its conclusions in this regard and to take the appropriate measures in consequence. The Committee requests the Government to keep it informed in this respect.
   • (b) As regards the allegations of anti-union discrimination against the Union of Drivers and Employees of the Julio Correa Transport Company, the Committee requests the Government to take the necessary steps to conduct an investigation without delay into the allegations of failure to re-engage the employees of the original licensed operator on anti-union grounds. Moreover, the Committee invites the complainant organizations, with a view to facilitating the investigation, to send the Government information on the allegedly anti-union nature of the reported occurrences. The Committee requests the Government to keep it informed in this respect.