Report in which the committee requests to be kept informed of development - REPORT_NO248, March 1987

1. 332. In a communication dated 5 September 1986 the International Confederation of Free Trade Unions (ICFTU) presented a complaint against the Government of Fiji on behalf of its affiliate, the Fiji Trades Union Congress (FTUC), alleging violation of basic trade union rights.
2. 333. The Government of Fiji replied in a communication dated 29 December 1986.
3. 334. Fiji has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No.87); it has ratified the Right to Organise and Collective Bargaining Convention, 1949 (No.98).

A. The complainant's allegations

1. 335. In its communication of 5 September 1986, the ICFTU states that the complaint concerns the imposition of a wage freeze, followed by a unilateral fixing of wages and the recent withdrawal by the Government of the recognition of the FTUC as the official representative body of trade unions and organised labour, resulting in the non-renewal of FTUC representation on tripartite bodies. The complainant states that the wage freeze was imposed for an indefinite period on 9 November 1984 as part of the Government's budget proposals for 1985 and was based on the Counter-Inflation (Remuneration) Act. It adds that the freeze was never discussed with the FTUC prior to its imposition and was in clear breach of the agreement signed in the framework of the Tripartite Forum of Fiji which was in force at the time for the period to 31 December 1984: this agreement set guide-lines at a national level on wages and salary increases and was signed on behalf of the Government by the Prime Minister and the Deputy Prime Minister.
2. 336. The complainant goes on to explain that after negotiations with the Government, the Tripartite Forum was reconvened towards the end of 1985 and wage negotiations were presided over by the Minister of Finance. In his budget address to Parliament in November 1985, that Minister announced that the wage freeze would be replaced by the outcome of the negotiations; but, in February 1986, he had, without prior consultation, unilaterally declared a ceiling of 2.25 per cent on wage increases. In the view of the complainant, this was a further breach of the Tripartite Forum agreement and meant that the Government had disregarded the trade unions' right of free collective bargaining. It points out that the FTUC opposed the 2.25 per cent ceiling and requested the Government to call a full meeting of the Tripartite Forum, and states that the Government has not so far given any positive response to this claim.
3. 337. The complainant states further that, on the contrary, the Government (in a letter of 4 June 1986, a copy of which was attached to the complaint) informed the FTUC of the withdrawal of the recognition which it had been accorded since 1973 as the sole representative body of trade unions and organised labour.
4. 338. In the view of the complainant, this withdrawal has serious consequences since it means that membership of FTUC representatives in important bodies (such as the Labour Advisory Board, the seven wages councils, the Fiji National Training Council, the Trade Union Advisory Council and the Fiji National Provident Fund, as well as various subcommittees appointed by these bodies) has not been renewed or will be terminated.
5. 339. The complainant states that the Government has not challenged the continuing representativity of the FTUC, and that the only reason given in justification of this drastic action was that the officers of the FTUC have been participants in an opposing political party and that, as the bodies "must be an integral part of and not be in conflict with the policies of the Government, those whose interests are in opposition to government policies cannot be represented" on them.
6. 340. The complainant regards this argument as untenable: although the FTUC was instrumental in the formation of the Fiji Labour Party, it cannot be regarded as a political party and has not deviated from its basic trade union role. It regards the withdrawal of recognition as highly unjustified and believes that it can only be interpreted as an attempt by the Government to undercut the effectiveness of the FTUC as the sole representative trade union centre of Fiji.

B. The Government's reply

1. 341. In its communication of 29 December 1986, the Government provides information on the background to the wage freeze for 1985 - announced in the budget speech by the Minister of Finance on 9 November 1984. This indicates that, in discussions which took place in the Tripartite Forum and its Remuneration Guide-lines Committee from 1982 to 1984, proposals for the consideration of a wage pause and a wage freeze were put forward by government representatives and supported by employers' representatives but not by workers' representatives. A wage guide-line was nevertheless established for 1983 as a compromise. Both the Government and the employers were of the view throughout 1983 and 1984 that such guide-lines were preferable to open-ended collective bargaining which would in their view open the door to unreasonable demands on the economy; but the wide differences between these views and those of the workers' representatives which had emerged at the Remuneration Committee's meetings had led the Government to the conclusion that it had no alternative to the unilateral imposition of a wage freeze, which the Minister of Finance had announced in his 1985 budget speech on 9 November 1984.
2. 342. Following the imposition of the freeze, negotiations concerning wages for 1985 would normally have begun at the beginning or the end of the year, but the Government had decided to convene an economic summit in February 1985 for the purpose, inter alia, of consulting a large number of political, social, religious and economic organisations on a wide range of economic issues. The Government states that the FTUC did not participate in this meeting, but attended the second such economic summit as an observer and participated actively in a third such meeting; similarly, the FTUC had not attended the first meeting of the National Economic Council on 4 November 1985, but had attended other meetings held since then. The Government expresses the view that it is the FTUC which has refused to participate in consultative machinery which has a much wider representation.
3. 343. The Government continues with extracts from the speech of the Minister of Finance on 8 November 1985 when introducing the 1986 budget. This indicates the economic and financial considerations which had led the Government to impose the wage freeze the previous year, and the role of the National Economic Council (which had made recommendations to the Remuneration Guide-lines Committee, based on the ability to pay) and the two national economic summits in assisting with the formulation of policies. The extract concludes with the statement that the national economic summit and its executive arm, the National Economic Council, will in future be the machinery for the regular consultation on development policies between the Government and representatives of the private sector, workers, women, youth and other community organisations.
4. 344. The Government then indicates that discussions between the representatives of government, employers and workers took place between 19 November 1985 and 27 January 1986, and that a total of 15 meetings were held between the parties. As no agreement could be reached with the FTUC, the Government decided to lift the wage freeze and impose a ceiling of 2.25 per cent on pay increases as from 1 January 1986 (with no catching up permitted for the period of the freeze, except in the case of 15 agreements which had been reached for implementation of the 1984 remuneration guide-lines, which were allowed to operate only as from 1 January 1986).
5. 345. The Government adds that during 1985 there were also consultations between the FTUC, the Fiji Employers' Consultative Association and the Government, regarding the future of the Tripartite Forum; and that it was agreed that the Forum should continue and that the Remuneration Guide-lines Committee of the Forum should meet annually to determine national remuneration guide-lines.
6. 346. The Government's communication then turns to the situation as reflected in the Minister of Finance's most recent budget speech, of 4 November 1986, in which it is stated that the Government will argue at the Remuneration Guide-lines Committee that the formula used previously should apply and that this would, on the basis of the improved performance of the economy, result in a wage guide-line of around 6 per cent for 1987. No catching up for the period of the freeze would, however, be allowed.
7. 347. In further elaborating the nature of the measures to be taken, the Minister of Finance went on to announce that restrictions on remuneration increases would be lifted with effect from 1 January 1987, and that the remuneration guide-line would be in accordance with agreement reached at the Remuneration Guide-lines Committee (which would be in line with the Government's policy of preventing the "catching-up situation").
8. 348. The Government concludes this aspect of its reply by stating that the Remuneration Guide-lines Committee met formally on seven occasions to discuss the guide-line for 1987, and that a voluntary guide-line for 1987 was agreed and signed between the parties on 18 December 1986. It adds that the stringent economic measures taken by the Government result from its responsibility for the proper management of the economy and the need to take whatever measures or action it considers necessary in the best interests of all citizens of the country. It states that the FTUC represents only about 50 per cent of the wage and salaried employees and there are others whose interests must also be considered.
9. 349. The Government goes on to reject any allegation that it has violated basic trade union rights in the country, and claims that the freedom and rights enjoyed by the trade unions in Fiji are the envy of many of their counterparts in the world. However, trade unions cannot be above the law or have a privileged position in society.
10. 350. On the question of withdrawal of sole recognition from the FTUC, the Government states that a judicial review of its decision in this regard has been sought in the Supreme Court of Fiji by the FTUC; and that the Committee will be informed of the decision on the matter. It goes on to point out that it has continued to appoint members of the FTUC to the various bodies as previously, after seeking nominations from the FTUC. However, in keeping with its decision to have much wider consultations, the Government also draws membership of these bodies from outside the FTUC as well since the FTUC represents only about 50 per cent of total employees.

C. The Committee's conclusions

1. 351. The Committee observes that there are two aspects to the allegations against the Government, namely a)those concerning the establishment of wage levels, including the introduction of a wage freeze for 1985 and subsequent developments relating to the establishment of ceilings for wage increases for 1986 and 1987; and b)the Government's withdrawal of sole recognition of the FTUC for the purpose of appointments to various bodies.
2. 352. As regards the first of these, it appears from the information available that the process of fixing wage guide-lines has gone through several distinct phases, including the following: i) until the end of 1984, the guide-lines concerning wage levels were established through the National Tripartite Forum; (ii) according to the Government, the absence of agreement by the workers' representatives to proposals supported by government and employers' representatives led to the announcement of a unilateral decision by the Government on 9 November 1984 to introduce a wage freeze; (iii) this was followed in respect of the subsequent year by the announcement of a ceiling on wage increases of 2.25 per cent on the basis of a recommendation to the Remuneration Guide-lines Committee by the first meeting of the National Economic Council in which the FTUC had not participated; in addition, in the period from 1 January 1986 onwards, no increases could be granted which involved catching up on the wages frozen by the first announcement (with certain exceptions); (iv) these restrictions were brought to an end as from 1 January 1987, guide-lines being fixed by the Remuneration Guide-lines Committee in a voluntary agreement reached on 18 December 1986.
3. 353. From the information furnished by the Government, it is clear that the decisions on the above matters were taken by the Government for reasons of economic policy, the details of which were outlined by the Minister of Finance when announcing them in his budget speeches. It would none the less appear to the Committee that the measures adopted removed and subsequently restricted opportunities for collective bargaining. A second aspect of the matter concerns the designation of the body within which such bargaining could take place, and in particular any effect of such a determination on the role of the FTUC in the process of collective bargaining.
4. 354. As regards the imposition by the Government of both the wage freeze and the subsequent ceiling on wage increases, the Committee would draw the attention of the Government to two principles of freedom of association to which it has made frequent reference in the past. In the first place, the Committee would recall that where intervention by the public authorities is essentially for the purpose of ensuring that the negotiating parties subordinate their interests to the national economic policy pursued by the Government, irrespective of whether they agree with that policy or not, this is not compatible with the generally accepted principle of free collective bargaining embodied in Article 4 of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), ratified by Fiji. An aspect of the case which remains unclear is the extent to which the measures taken by the Government were introduced through legislation, and in particular the extent to which the Counter-Inflation (Remuneration) Control Act was the vehicle for their implementation. The Committee accordingly requests the Government to supply it with information on this aspect of the matter so that full consideration can be given to the extent to which the measures adopted are compatible with the above-mentioned principle.
5. 355. The other principle to which the Committee would draw the attention of the Government is that which states that if, as part of its stabilisation policy, a government considers that wage rates cannot be settled freely through collective bargaining, such a restriction should be imposed as an exceptional measure and only to the extent that it is necessary, without exceeding a reasonable period, and that it should be accompanied by adequate safeguards to protect workers' living standards. (See Digest of Decisions and Principles of the Freedom of Association Committee of the Governing Body, para. 641.) The Committee would emphasise that, where considerations of economic policy result in restrictions of the kind introduced by the Government, every effort should be made to provide safeguards of the kind referred to.
6. 356. The Committee has, however, taken note of the fact that the FTUC chose not to participate in the first meeting of the economic summit which made recommendations relating to the introduction of the ceiling on wage increases, although it has done so subsequently. In the circumstances, the Committee is of the view that this aspect of the case does not require further consideration.
7. 357. While the Committee notes that a restriction on collective bargaining continued to exist in the form of the insistence that there should be no catching up in respect of previous periods of wage restraint, it has also noted the Government's statement relating to the removal of the restriction on wage increases with effect from 1 January 1987. It notes further that the Remuneration Guide-lines Committee, which had previously provided the opportunity for collective bargaining in a tripartite framework, has reached an agreement on voluntary guide-lines for 1987. The Committee requests the Government to furnish it with the text of the agreement signed on 18 December 1986 so that it may reach a conclusion in the light of all relevant information on the restoration of full freedom to bargain collectively.
8. 358. There remain the allegations relating to the removal of recognition from the FTUC which it had enjoyed prior to withdrawal by the Government in a letter dated 4 June 1986. In this regard, the Committee notes that the complainants object to the withdrawal of sole recognition from the FTUC.
9. 359. The Government indicates that its reason for withdrawing sole recognition is that the FTUC does not represent more than 50 per cent of the workers, and states that it has continued to appoint FTUC nominees to various statutory and other bodies on which it was previously represented, although other representatives have also been appointed thereto at the same time.
10. 360. The Committee takes note of this information. It draws the attention of the Government to the principle that where, under the system in force, the most representative union enjoys preferential or exclusive bargaining rights, decisions concerning the most representative organisation should be made by virtue of objective and pre-established criteria so as to avoid any opportunities for partiality or abuse. (See Digest of Decisions paras. 239 and 623.)
11. 361. In this regard, the Committee has noted with concern that the only grounds given for the withdrawal of exclusive recognition to the FTUC, in the Government's letter to that organisation on 4 June 1986, related to the participation of officers thereof in an opposing political party and its view that those whose interests are in opposition to government policy cannot be represented on the various bodies to which FTUC nominees had been appointed. In the opinion of the Committee, such a view is not compatible with the principles of freedom of association, and in particular with the principle expressed by the International Labour Conference in the resolution concerning the independence of the trade union movement, that governments should not attempt to transform the trade union movement into an instrument for the pursuance of political aims, nor should they attempt to interfere with the normal functions of a trade union movement because of its freely established relationship with a political party. (Digest of Decisions para. 353.) The Committee has, however, taken note of the fact that the FTUC does continue to be represented on the bodies on which it formerly enjoyed exclusive representation and expresses the hope that it will in this way be able to carry out its functions and represent the occupational interests of its members.