Definitive Report - REPORT_NO310, June 1998

1. 255. The complaint in this case is contained in a communication from the Teachers' Association of Chile dated 20 November 1997. The Government sent its observations in a communication dated 10 February 1998.
2. 256. Chile has not 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), or the Labour Relations (Public Service) Convention, 1978 (No. 151).

A. The complainant's allegations

1. 257. In its communication dated 20 November 1997, the Teachers' Association of Chile states that, with the return to democracy in Chile, since 1990 a process has begun of restoring the rights lost by public servants during the preceding period of authoritarian government; this essentially took the form of increases in remuneration, which had seriously deteriorated during that period. Accordingly, in line with the commitments undertaken by the Government of that time in the context of its programme, a public sector committee was set up which met once a year and brought together representatives of the Government, on the one hand, and, on the other, leaders of the organizations representing the public sector and the Single Central Organization of Chilean Workers (CUT). Through frank and open dialogue, this committee reached agreements which were subsequently transformed into national legislation. These agreements were intended to introduce a general adjustment in the amount of remuneration and other benefits for public servants. In this respect, it should be pointed out that these agreements and the enactments in which they were subsequently enshrined were in effect for a period of one year. The complainant organization states that thus, over the years, the groundwork was laid for a collective bargaining process that was ultimately accepted, despite the fact that the "ground rules" according to which it was institutionalized, both as to form and to substance, had been called into question, in addition to the fact that the resulting salary increases had seemed inadequate.
2. 258. The complainant organization points out that, at the same time, sectoral agreements were concluded with the Government to meet the specific interests represented by each organization; both the spirit and the letter of these agreements were independent of and exceeded the general salary adjustments covering the CUT and the other organizations of public servants. In most cases these sectoral wage increases were preceded by industrial action. In 1997 the Government unilaterally and arbitrarily changed the "ground rules" which it had itself accepted in previous agreements, by refusing to negotiate and submitting the general adjustment Bill to the National Congress without going through the bargaining procedures and mechanisms which had been understood as having been approved and given legitimacy by both sides.
3. 259. Specifically, the complainant organization alleges that on 14 October 1997 the public sector organizations and the CUT sent the Government a memorandum setting forth the workers' claims and aspirations to be discussed in the 1997 bargaining round. On 17 October 1997, the Government, through the Ministries of Finance, Labour and Social Welfare and the Economy, issued an invitation to a double session on the following Monday, 20 October, from 10 a.m. to 1 p.m. and from 3.30 p.m. onwards in order to "bring their positions closer together" and explore possibilities of reaching an agreement on a general salary adjustment and holiday bonuses in the public sector. Immediately afterwards the Government stated that "in view of the heavy legislative agenda and the lack of time available to process this Bill, it is necessary to send it next Tuesday in order for the general salary adjustment and holiday bonuses to enter into force on 1 December, which is the chief responsibility of the Government". The complainant organization adds that the Government's claim that an agreement of such scope and importance could be signed after no more than 12 hours of negotiations was unrealistic. It states that the mechanism proposed by the Government placed an unacceptable imposition on the unions since, among other things, it meant that they would be forced not to reach an agreement but rather to accept or reject a rigid and inflexible proposal made by the authorities, within a bargaining period which did not allow them to consult their first-level organizations and thus infringed the elementary principles of freedom of association and trade union democracy. According to the trade union organization, it is obvious that the 12-hour period allowed by the Government to complete negotiations clearly shows its intention not to bargain and the fact that it had already made its decision, namely to submit the Bill on the general salary adjustment to the National Congress without the agreement of the public sector unions.
4. 260. The complainant organization alleges further that the bargaining rules have been changed. It points out that, as the Government stated in reply to its memorandum, up to 1996 the components of the general salary adjustment were inflation or cost-of-living increases, productivity and what was known as the "equity bonus" (minimum level of redistributive social justice). In this case, however, the productivity variable was unilaterally eliminated, the reason given by the authorities being that it had already been negotiated in the agreements concluded with the sectoral organizations, which is an absolutely false, tendentious and malicious assertion. By way of example, the complainant organization cites act No. 19,504, containing the last agreement between the Teachers' Association of Chile and the government authorities. Section 2 of the Act provides that the special increase in remuneration for 1998 "will apply independently of the general pay adjustments established for the public sector". What is more, section 1 of the same Act, concerning the pay increase for 1997, does not refer to the public sector adjustment for that year or state that the increase was being granted as part of the latter. The complainant organization affirms that it is thus a recent Act of the Republic of Chile which refutes the authorities' claim that productivity was taken into account in the agreement that is faithfully reflected in the Act, since none of its provisions state that the above-mentioned special pay increase for teachers was granted as part of the general salary adjustment for the public sector as far as the productivity variable is concerned. What the Act does say is in fact the contrary, as is crystal clear from the use of the word "independently".
5. 261. The complainant organization alleges further that anti-union practices hindering the exercise of freedom of association have been carried out. It points out that sectoral bargaining by public servants has generally been accompanied by industrial action, in the legitimate exercise of the right to strike and other measures that were intended to demonstrate disagreement with the Government and which had no other aim but the defence of socio-economic interests.
6. 262. The complainant organization states that its attention was drawn to a confidential letter, No. 015 of 15 September 1997, signed by the Under-Secretary of Labour and addressed to the regional representatives of the Ministry of Labour and Social Welfare, on the subject of negotiations under way with the National Association of Fiscal Employees (ANEF), the relevant part of which states as follows: "The executive of the ANEF has announced a plan of industrial action calling for a general salary adjustment of 30 per cent in payment of the historical debt', among other demands; I would therefore like to have a weekly report on any action taken, messages and measures for the regional implementation of this industrial action plan". The complainant organization states that this confidential letter not only points to an abuse of authority and indicates that the Under-Secretary of Labour has exceeded the powers conferred upon him by the internal regulatory framework but, most importantly, constitutes an act of unlawful and undue interference in the activities and functioning of trade unions.

B. The Government's reply

1. 263. In its communication dated 10 February 1998, the Government states the following:
2. (1) on 13 October 1997, the Under-Secretary of Labour, on behalf of the Ministers of Finance and Labour, addressed a written invitation to the President and representatives of the Single Central Organization of Workers (CUT) to participate in a meeting with the above-mentioned Ministers in the "process of dialogue on labour and technical matters to determine the general salary adjustment and holiday bonuses in the public sector". This meeting was held at noon on Tuesday, 14 October 1997 in the office of the Minister of Labour and Social Welfare;
3. (2) on 14 October 1997, at the meeting with the Minsters, 12 public sector workers' organizations coordinated by the CUT submitted a "memorandum from the public sector to the Government concerning the 1997 bargaining round", setting forth the following economic demands: (i) a general 14.1 per cent adjustment in public sector remuneration, taking account of expected inflation of 5.5 per cent plus an 8.6 per cent increase; (ii) minimum wage in the public sector to be increased by 20 per cent; (iii) award of 500 university scholarships for public servants to be effective starting in 1998; (iv) a housing purchase fund; (v) a fund to provide university education to the children of public servants in the sector, equivalent to 250 full scholarships; (vi) Christmas bonus to be fixed at 40,000 pesos for persons earning less than 250,000 pesos and at 25,000 pesos for those earning more; (vii) national holiday bonus to be fixed at 30,000 pesos and 25,000 pesos, respectively, again with the threshold at 250,000 pesos; (viii) an education grant of 35,000 pesos for dependants up to the higher education level, up to the age of 24 years; (ix) 55,000 pesos per worker as a contribution to their welfare; and (x) a special retirement plan to be established;
4. (3) at the meeting held on Tuesday, 14 October 1997 for the purpose of "dialogue on labour and technical matters concerning the general salary adjustment and holiday bonuses in the public sector", the Ministry of Labour and Social Welfare proposed the following programme and methodology to the CUT leaders and public sector organizations: (a) an initial technical phase consisting of an analysis of wage trends in the sector, previous commitments, the workers' list of demands and new criteria adopted by the Government, culminating in the submission of a technical report by the government team to the Ministers of Finance and Labour; (b) work sessions with Ministers to determine the general salary adjustment and holiday bonuses;
5. (4) on 14 October 1997 the Under-Secretary of Labour invited the President of the CUT to hold the first session on Wednesday, 15 October, in order to evaluate previous commitments (training, retirement plans, occupational safety committees, crèches, etc.). In addition, he was invited to hold two further meetings, one to study in detail the memorandum containing the workers' economic demands presented to the Ministers and the second to present the Government's view on wage trends in the public sector and new wage-fixing criteria linked to sectoral productivity. These meetings were to be held on Thursday, 16 and Friday, 17 October 1997;
6. (5) in a written note addressed to the President of the CUT on 17 October 1997, the Ministers of Labour and Social Security, Finance and the Economy expressed their views and proposals in response to the "Memorandum from the public sector to the Government concerning the 1997 bargaining round". This document, entitled "Government proposal in response to the memorandum from the Single Central Organization of Workers to the Government concerning the process of determining salary adjustments and other benefits for 1998", contains the following economic proposals: (i) a general salary adjustment calculated on the basis of future inflation (4.5 per cent) and supplemented by a factor of 20 per cent, totalling 5. 4 per cent; (ii) a proposal not to introduce any change in the minimum wage, since the new system of performance incentives brings about another increase in remuneration ; (iii) 500 university scholarships to be granted in 1998; (iv) the Government's housing policy is based on considerations of equity, which does not allow the introduction of social schemes; (v) the authorities consider that the higher education policy meets citizens' needs adequately, ruling out the introduction of other benefits; (vi) a Christmas bonus of 19,500 pesos for those earning less than 205,000 pesos and 11,500 pesos for those earning more than that amount; (vii) a national holiday bonus of 26,100 and 19,850 pesos respectively, applying the same threshold of 205,000 pesos; (viii) an education grant of 28,200 pesos; (ix) 47,000 pesos per worker as a contribution to their welfare; and (x) a proposal to maintain the sectoral agreements that had already been reached. In view of the lack of time available, in the same note the Ministers invited the CUT leaders and public sector organizations "to hold a double working meeting in the Ministry of Finance on Monday, 20 October from 10 a.m. to 1 p.m. and from 3.30 p.m. onwards, with a view to bringing their positions closer together and exploring the possibilities of reaching an agreement on a "general salary adjustment and holiday bonuses in the public sector". In view of the heavy legislative agenda and the lack of time available to process this Bill, it is necessary to send it next Tuesday in order for the general salary adjustment and holiday bonuses to enter into force on 1 December, which is the chief responsibility of the Government". The Ministers went on to invite them to work and resume talks on the weekend (Saturday, 18 and Sunday, 19 October), if the union leaders were available, or on Monday, 20 October, according to the programme outlined above;
7. (6) on 20 October 1997 the meeting between the Ministers of Labour and Social Welfare, Finance and the Economy and the leaders of the CUT and the public sector workers' organizations was held in order to agree on the amount of the general salary adjustment and holiday bonuses for the public sector for 1998. However, following several hours of discussion during which the sides presented their arguments, the workers' representatives did not yield on their demand for a 14.1 per cent pay adjustment (8.6 per cent increase plus 5.5 per cent past inflation). Faced with the impossibility of reaching an agreement, due to the union leaders' inflexible stance, and taking into account the fact that the Bill would have to be submitted to Parliament as a matter of urgency, on 21 October 1997 the President of the Republic sent it for processing, since it had to enter into force on 1 December 1997;
8. (7) to sum up the facts, the Government recalls that on 14 October 1997 it launched the process of "dialogue on labour and technical matters concerning the general salary adjustment and holiday bonuses in the public sector" with the Single Central Organization of Workers and its affiliates, in line with its labour and wage policy for the public sector, which is aimed at achieving a constant and simultaneous improvement in the working conditions of public servants and the quality of the services offered to citizens by public institutions. During this process, government representatives had held a series of meetings with representatives of workers and academic circles, at which aspects such as wage trends in the public sector, the decentralization of labour relations and performance were analysed, as well as the state of progress and extent of compliance with the agreements reached between the Government and the CUT on 16 November 1996. These meetings had culminated in the drafting of a technical report setting out the results of the meetings, which had then been submitted to the workers' representatives;
9. (8) during this period the government representatives had expressed their willingness to work at the pace required by circumstances, given that -- as mentioned above -- the heavy legislative agenda and lack of time available to process the Bill made it necessary for it to be sent as soon as possible to ensure that it would enter into force on 1 December 1997. Unfortunately the workers' side did not understand these reasons and, despite the willingness displayed by the Government, the work session with the Ministers of Finance, Labour and the Economy could only be held one day before the deadline on which the Bill had to be submitted. Therefore, in the Government's view, in the short time available, every effort had been made to bring about a process of effective dialogue, and moreover it had been entirely willing to make every additional effort that would have been required in order to reach a concerted decision on the salary adjustment and holiday bonuses for 1998, but these efforts had been to no avail, despite the willingness expressed by the Government;
10. (9) the Government points out that social dialogue is not exhausted at a single level; neither does it fail on account of partial disagreement. Nothing is further from the Government's intention than the idea of discarding dialogue as an appropriate vehicle in the relationship between the authorities and the workers, since the Government is deeply convinced of its value, as is clear from the many initiatives taken in order to create, promote and strengthen dialogue and cooperation between employers and workers, both in the productive sector and in the state administration. This is evidenced by the initiatives taken with the aim of proceeding with the ratification by Parliament of the Labour Relations (Public Service) Convention, 1978 (No. 151);
11. (10) the Government considers that it has pursued a sound wage policy, through which sectoral incentives have been applied for health service employees and teachers and pay mechanisms have been granted on a par with those of municipal employees and those of the centralized state administration. In this context the salary adjustment fixed for 1998 is aimed at compensating for the expected price increase this year and supplements wage increases provided for in sectoral agreements. Under the combined effect of a general adjustment and sectoral pay increases, the average salary increase for public servants in 1998 will be 11 per cent in nominal terms, which compares positively with the 8 per cent nominal increase obtained in private sector pay in 1997. The Government states that the key objectives of the labour policy it has pursued in the public sector are to establish an institutional framework for social dialogue and to introduce performance incentives in order to enhance the dignity of the public service, while at the same time improving the quality of the services offered by state institutions to citizens, particularly those with low incomes;
12. (11) on 10 November 1997 the President of the Republic promulgated the text that had been approved by Parliament, which was published in the Diario Oficial (Official Gazette) of 19 November 1997 as Act No. 19,533, which introduces salary adjustments for public sector workers and grants holiday bonuses and other financial benefits which entered into force on 1 December 1997.
13. 264. As regards the allegation concerning unlawful interference by the Under-Secretary of Labour in the activities and functioning of public sector trade unions, in the form of a confidential letter, No. 015 of 15 September 1997, the Government states that this letter contained instructions to officials under the authority of the Under-Secretary of Labour, namely the regional secretaries of the Ministry, of whom there are 13 nationwide. The Government points out that these instructions consisted in requesting information concerning the demands for pay adjustments made by the National Association of Fiscal Employees (ANEF) which were reportedly as high as 30 per cent. The Government states that the same officials were requested to circulate information at the regional level on the pay increases granted in the public administration since 1990 and to announce the Government's willingness to launch a new stage in wage determination based on incentives or bonuses for individual and team performance by public servants. Lastly, the Government states that there have therefore not been any anti-union practices or interference in the activities of trade union organizations.

C. The Committee's conclusions

1. 265. The Committee observes that in this case the complainant organization alleges certain defects in the collective bargaining process in the public sector, attributable to the administrative authorities, as well as a change in bargaining rules, namely the fact that the Government did not take productivity into account as a criterion in introducing salary increases for 1998, contrary to previous practice. The Committee notes further that the complainant organization alleges that the administrative authorities engaged in anti-union practices in the form of a confidential letter sent to the regional secretaries of the Ministry of Labour.
2. 266. As regards the allegation concerning defects in the collective bargaining process in the public sector attributable to the administrative authorities, the Committee notes that, in its reply, the Government states the following: (i) on 13 October 1997 the Under-Secretary of Labour addressed a written invitation to the Single Central Organization of Workers (CUT) to participate in the process of dialogue on labour and technical matters to determine the general salary adjustment and holiday bonuses in the public sector; (ii) on 14 October 1997, 12 public sector workers' organizations, coordinated by the CUT, addressed a memorandum to the authorities in which they set forth their economic demands; (iii) on 17 October the administrative authorities communicated in writing to the President of the CUT the Government's proposal in response to the CUT memorandum concerning the process of determining the salary adjustment and other benefits for 1998; (iv) on 20 October the meeting with the CUT and public sector organizations took place, but after several hours of discussion during which the sides presented their arguments, the workers' representatives did not yield on their original demand for pay adjustments; and (v) faced with the impossibility of reaching an agreement and taking into account the fact that the Bill on the general salary adjustment and holiday bonuses would have to be submitted to Parliament as a matter of urgency on 21 October 1997 so as to enter into force on 1 December, the President of the Republic sent it for processing.
3. 267. In this respect, the Committee observes that the allegations of the complainant organization and the Government's reply indicate that a bargaining process was under way between the trade union organizations in the public sector and the authorities. However, the Committee observes that in this case the collective bargaining process for a salary adjustment in the public sector lasted for a period of five days -- from 14 to 20 October -- which, in the light of these circumstances, was inadequate, especially given the fact that the negotiations themselves (that is, once the trade union organization's proposals and the authorities' counter proposal had been put forward) lasted only one day (20 October). In these conditions, the Committee considers that the public sector trade unions did not have sufficient time to negotiate on the salary adjustments for 1998, which in this specific case is contrary to the spirit of collective bargaining. The Committee therefore requests the Government to ensure that in future sufficient advance notice is given to public sector trade union organizations when they are convened for collective bargaining, so as to allow them a reasonable period of time to negotiate their conditions of employment, especially in view of the fact that there are strict time-limits for submitting bills to Parliament.
4. 268. As regards the allegation concerning the change in bargaining rules, namely the fact that the Government did not take productivity into account as a criterion in determining salary increases for 1998, contrary to previous practice, the Committee notes the Government's statement that: (1) the salary adjustment fixed for 1998 is aimed at compensating for the expected price increase this year and supplements wage increases set forth in previous agreements; (2) under the combined effect of a general adjustment plus other sectoral adjustments, the average salary increase for public servants for 1998 will reach 11 per cent in nominal terms; and (3) the key objectives of the labour policy pursued in the public sector are to establish an institutional framework for social dialogue and to introduce performance incentives in remuneration. In this respect, while the Committee observes that provision has been made for a salary increase for workers in the public sector in 1998 and that a policy of introducing pay incentives is being implemented, it would emphasise that the determination of criteria to be applied by the parties in fixing wages (cost-of-living increases, productivity, etc.) is a matter for negotiation between the parties and it is not for the Committee to express an opinion on the criteria that should be applied in fixing pay adjustments. In these circumstances, the Committee will not pursue its examination of this allegation.
5. 269. As regards the allegation concerning alleged anti-union practices committed by the administrative authority in the form of a confidential letter addressed to the regional secretaries of the Ministry of Labour (the content of which was reproduced in the allegations of the complainant organization), the Committee notes the Government's statement that the letter in question contained instructions to officials under the authority of the Under-Secretariat of Labour, requesting information concerning demands for pay adjustments made by the National Association of Fiscal Employees, and asking them to circulate information on the pay increases granted since 1990 and the policy regarding the new round of wage fixing. In this respect, the Committee observes that the text of the confidential letter to which the complainant organization objected reflects the administrative authority's concern to be informed of "action taken, messages and measures for the regional implementation of this industrial action plan". In the view of the Committee, this letter could reflect the authority's concern for the industrial action to take place in accordance with the legislation, for example, by allowing them to take measures to organize minimum services in the event of a strike. Moreover, the text of the letter in question does not contain any indication of an intention to engage in undue interference in the trade union activities of public sector workers' organizations, neither does it order any measures to this effect.