Report in which the committee requests to be kept informed of development - REPORT_NO336, March 2005

1. 576. The complaint is contained in a communication from the Progressive Trade Union of Mexican In-Bond Industry Workers (SPTIMRM) dated 19 April 2004. The complainant organization sent further information in a communication dated 23 August 2004. The Government sent its observations in a communication dated 3 November 2004.
2. 577. Mexico has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87); it has not ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant’s allegations

1. 578. In its communication of 19 April 2004, the SPTIMRM states that since 19 July 2001 it has been signatory to the collective labour agreement applicable in the textile enterprise CONFITALIA S.A. de C.V., a subsidiary of GRUPO COVARRA S.A. de C.V. The complainant organization adds that on 18 December 2001, 6 December 2002 and 17 January 2003, it sent communications to the Local Conciliation and Arbitration Board (JLCA) of the State of Morelos and forwarded to the aforementioned enterprises a file of claims with notice of strike in order to secure observance of the collective labour agreement and the legal provisions on profit-sharing. According to the complainant, on account of a lack of proposals and the refusal of the enterprises to offer a solution to the dispute, the trade union declared a strike on 22 January 2003 and 4 February 2003; the JLCA declared the strike existent in law.
2. 579. The complainant organization indicates that on 26 December 2001 GRUPO COVARRA S.A. applied to the judicial authority for a declaration of insolvency with respect to the enterprises of the group, including CONFITALIA.
3. 580. The complainant organization alleges that on 11 August 2003 a group of persons unrelated to CONFITALIA S.A. de C.V., accompanied by various unidentified former workers, entered the premises of the enterprise, thereby claiming to break the strike prevailing at the workplace. At 9 p.m. on the same day, the president and General Secretary of the JLCA entered the premises of CONFITALIA S.A. de C.V., supposedly at the request of an anonymous group of workers who requested their presence by telephone, in order to verify and record that there was no strike at the workplace. Despite the fact that no work was done either on this day or subsequently at the workplace, the aforementioned officials proceeded to draft an official document in which they claimed that a group of workers from CONFITALIA S.A. de C.V. had been working normally and voluntarily in all their areas of work, with the instruments and tools necessary for performing their work, thereby showing the strike to be at an end.
4. 581. The complainant organization indicates that in view of the flagrant violation committed by the aforementioned officials, it lodged an application dated 26 August 2003 for protection of their constitutional rights (amparo), which came before the Third District Court through the duty rota. The court granted the trade union constitutional and judicial protection by means of a judgement handed down in Case No. 1002/03, ordering the strike situation prevailing in CONFITALIA S.A. de C.V. to be observed.
5. 582. The complainant organization states that on a number of recent occasions, Mr. Carlos Ribera Noverola appeared at the premises of the striking enterprise. He reportedly said that he was the administrator (receiver) for the bankruptcy pronounced by the Fourth District Judge in the State of Morelos, that he had information to the effect that the strike was not in operation, and that he was going to enter the premises and remove the strike signs. The complainant adds that there has been no formal notification of the claims made by Mr. Ribera. Nevertheless, irrespective of whether or not the bankruptcy has been pronounced or whether or not Mr. Carlos Ribera Noverola is the receiver, it is clear that: (1) a strike has been in operation since 22 January 2003, which has been declared existent in law, and this situation has been confirmed through a judgement handed down by the Third District Judge in constitutional protection (amparo) Case No. 1002/03; (2) in accordance with the provisions of the Federal Labour Act:
   • - lodging of the file of claims shall have the effect of making the employer, for the whole of the period in question, the depositary of the enterprise or establishment affected by the strike, with the duties and responsibilities inherent in the position (section 921);
   • - from the date of lodging of the file of claims with the notice of strike, the execution of any ruling shall be suspended, any attachment, embargo, proceeding or dispossession versus the enterprise or establishment shall be prohibited, and no property may be seized from the premises where it is installed (section 924);
   • - workers are not obliged to engage in proceedings relating to insolvency, bankruptcy, suspension of pay or succession. The Conciliation and Arbitration Board shall proceed with the attachment and sale by auction of the property required for the payment of wages and benefits (section 114);
   • - all the authorities shall be obliged to provide assistance to striking workers (sections 4, 447 and 449).
6. 583. The complainant organization emphasizes that the standards in force give preferential rights to workers to receive the payment of their wages and benefits and that the strike was declared one year before the legal declaration of bankruptcy of the enterprise. According to the complainant, it is clear that the aim of the actions of the Government of Mexico, the Government of the State of Morelos via the JLCA and the Fourth District Court of the State was to damage and violate the rights of the striking workers.
7. 584. The complainant organization requests the Committee to make the necessary recommendations to the Government of Mexico, the Government of the State of Morelos and the Fourth District Court of the State of Morelos to reconsider their position, bring their conduct into line with fundamental standards and ensure respect for the freedom of association of the workers of CONFITALIA S.A. de C.V. Account must be taken of the fact that there has been a strike, declared existent in law in labour Case No. 02/580/01, since 22 January 2003 (one year before the legal declaration of bankruptcy), and the existence in law of the strike was confirmed by the Third District Court of the State of Morelos in (amparo) Case No. 1002/03. It also requests the Committee to make the necessary recommendations to the Government of Mexico, the Government of the State of Morelos and the Fourth District Court of the State of Morelos to ensure that they refrain from handing down decisions which affect rights that are legally established and enshrined in the Constitution, in ratified ILO Conventions and in the Federal Labour Act in favour of striking workers, standards which take precedence over the Bankruptcy Act.
8. 585. In its communication of 23 August 2004, the complainant organization states that on 21 August 2004, 60 individuals from the Federal Investigation Agency and the police, following orders from the Fourth District Court of the State of Morelos in the context of the insolvency proceedings, arrived at the premises of the CONFITALIA enterprise at 5 o’clock in the morning, surprising the workers who were acting as “strike guards”, removed the strike banners (signs), broke the padlocks and entered the workplace. The complainant indicates that the workers were assaulted and the strike was broken and points out that a strike declared existent in law by the judicial authority prior to the bankruptcy proceedings cannot be lifted by a judge for commercial matters. In the present case, the Conciliation and Arbitration Board refrained from undertaking proceedings for determining whether the strike is the fault of the employer and whether the latter is obliged to pay all wages and benefits to the workers.

B. The Government’s reply

1. 586. In its communication dated 3 November 2004, the Government notes that section 4(II)(a) of the Federal Labour Act states that the rights of the community are violated when, once a strike has been declared according to the relevant terms, strikers are replaced in the work they perform without the dispute which has given rise to the strike being settled.
2. 587. In addition, section 929 of the Federal Labour Act states that within the 72 hours following the start of the strike, the employer may request that the strike be declared non-existent because of failure to meet procedural requirements or the objectives laid down by section 459 of the Federal Labour Act, i.e. when the work stoppage is undertaken by fewer workers than the number specified in section 451(II); when the purpose of the strike is not one of those specified by section 450; or when the terms of section 452 are not fulfilled. In the abovementioned cases, the employer is free of liability and the workers are given 24 hours in which to return to work, with the caution that should they fail to respect that provision, their employment relationship will be terminated.
3. 588. With regard to the statement by the complainant trade union that there were a number of visits to the premises of the striking enterprise by Mr. Carlos Ribera Noverola, who said that he was the bankruptcy administrator (receiver), that he had information that the strike was not in operation, and that he was going to enter the premises and remove the strike signs, the Government states that it is important to note that, under section 60 of the Bankruptcy Act, if the SPTIMRM in its capacity as creditor of the CONFITALIA S.A. de C.V. enterprise considers that the receiver was responsible for acts or omissions which are in breach of that Act, it may denounce him to the judge presiding over the bankruptcy proceedings and the latter will take the legal measures he deems suitable and, if appropriate, may apply to the Federal Institute of Bankruptcy Specialists in order to avoid damage to the insolvent merchant’s estate, i.e. the portion of his assets consisting of non-excluded property and rights.
4. 589. Under section 127 of the Bankruptcy Act, when in diverse proceedings there has been an enforceable judgement, labour award, final administrative decision or arbitral award prior to the date of retrospective annulment (the 270th day immediately preceding the date of the court ruling concerning the declaration of insolvency, in accordance with section 112 of the same Act), whereby the existence of a right to collection of a debt versus the merchant is declared, the creditor concerned must present to the judge a certified copy of the said decision, and the judge must recognize the debt according to such a decision by including it in the ruling concerning acknowledgement, marshalling and priority of debts.
5. 590. Under section 172 of the Bankruptcy Act, the receiver must notify the creditors of his appointment and indicate a legal address, within the jurisdiction of the judge presiding over the bankruptcy proceedings, in order to fulfil the obligations imposed by the aforementioned Act.
6. 591. It is important to emphasize that, under section 180 of the Bankruptcy Act, the receiver must initiate measures concerning seizure from the time of his appointment. He must take possession of the property and premises in the possession of the merchant and initiate administration thereof, and therefore the judge must take the relevant measures and issue the necessary decisions for the immediate seizure of books, papers, documents, electronic data storage and processing media and all property in the possession of the merchant.
7. 592. In addition, section 183 of the Bankruptcy Act states that when the receiver takes possession of the property constituting the enterprise, he shall immediately take the necessary measures to safeguard and preserve it.
8. 593. Furthermore, section 191 of the Bankruptcy Act lays down that the inventory shall be drawn up by listing and describing all movable or immovable property, bonds and securities of all categories, trading commodities and entitlements in favour of the merchant; that the receiver shall take possession of the property and rights constituting the estate, shall draw up or verify the inventory thereof and to this end he shall have the capacity of sequestrator.
9. 594. As regards the priority of debts, section 221 of the Bankruptcy Act states that labour-related debts other than those indicated in section 221(I) (those referred to in article 123(XXIII)(A) of the Political Constitution of the United States of Mexico and its regulatory provisions setting wages at the level corresponding to the two years prior to the declaration of insolvency) shall be paid after specially privileged debts (those which under the Code of Commerce or relevant legislation are subject to special privilege or a right of attachment) and debts with real security (mortgage or collateral) have been settled, but with priority given to specially privileged debts (the merchant’s burial expenses, should the insolvency ruling be issued after his death, and expenses relating to the sickness leading to the death of the merchant, should the insolvency ruling be issued after his death).
10. 595. Also in relation to the priority of debts, section 113 of the Federal Labour Act stipulates that wages accrued in the last year and benefits owed to the workers take preference over any other debt, including those which are covered by real security, fiscal debts and those owed to the Mexican Social Security Institute, on all the employer’s assets.
11. 596. Section 924(I) of the Federal Labour Act states that from the date of lodging of the files of claims with the notice of strike, the execution of any ruling shall be suspended; any attachment, embargo, proceeding or dispossession versus the enterprise or establishment shall be prohibited; and no property may be seized from the premises where it is installed, except where, before a strike is broken, the securing of workers’ rights is concerned, especially benefits, wages, pensions and other allowances accrued, constituting up to two years’ wages.
12. 597. Finally, it is important to point out that under section 114 of the Federal Labour Act, workers are not obliged to engage in proceedings relating to insolvency, bankruptcy, suspension of pay or succession, as the Conciliation and Arbitration Board shall proceed with the attachment and sale by auction of the property required for the payment of wages and benefits.

C. The Committee’s conclusions

1. 598. The Committee observes that the allegations in the present case refer to a strike at the CONFITALIA S.A. de C.V. enterprise, which took place from 22 January 2003 (and was confirmed by the competent authority on 4 February 2003) with the purpose of obtaining observance of the collective agreement and the legal provisions on profit-sharing. The file of claims with the notice of strike was submitted on 18 December 2001, 6 December 2002 and 17 January 2003. The complainant organization states that on 26 December 2001 the group to which the aforementioned enterprise belongs applied to the judicial authority for a declaration of insolvency in respect of the enterprises in the group. The complainant organization alleges that on 11 August 2003 representatives of the Local Conciliation and Arbitration Board adopted an official document in which, disregarding the reality, they declared the strike to be over, a document which was subsequently declared null and void by the judicial authority further to an appeal by the trade union. Nevertheless, in January 2004 the legal declaration of bankruptcy was issued. According to the complainant organization, a person claiming to be the administrator (receiver) for the bankruptcy pronounced by the judicial authority asserted shortly before the present complaint (April 2004) that the strike was not in operation. The complainant organization requests the Committee to recommend to the Government and the judge presiding over the bankruptcy proceedings to refrain from issuing decisions which affect the rights of the striking workers.
2. 599. The Committee notes the Government’s statements, particularly to the effect that: (1) the complainant trade union in its capacity of creditor may denounce to the judge presiding over the insolvency proceedings any actions or omissions by the receiver which do not comply with the Act, so that the latter may take the attachment measures which he deems appropriate; (2) section 114 of the Federal Labour Act states that wages accrued in the last year and benefits owed to the workers take preference over any other debt, including those which are covered by real security, fiscal debts and those owed to the Mexican Social Security Institute, on all the employer’s assets, and also under section 113 of the Federal Labour Act, workers are not obliged to engage in proceedings relating to insolvency, bankruptcy, suspension of pay or succession, as the Conciliation and Arbitration Board shall proceed with the attachment and sale by auction of the property required for the payment of wages and benefits.
3. 600. The Committee observes, moreover, that the Government states that section 924(I) of the Federal Labour Act states that from the date of lodging of the files of claims with the notice of strike, the execution of any ruling shall be suspended; any attachment, embargo, proceeding or dispossession versus the enterprise or establishment shall be prohibited; and no property may be seized from the premises where it is installed, except where, before a strike is broken, the securing of workers’ rights is concerned, especially benefits, wages, pensions and other allowances accrued, constituting up to two years’ wages.
4. 601. The Committee understands that the purpose of the strike, at least from a certain time, was to preserve the rights and entitlements of the workers in relation to the enterprise’s request to the judicial authority that insolvency and foreseeable bankruptcy be declared, particularly in view of the fact that the legislation provides in the context of strikes for suspension of the execution of any ruling and prohibits the seizure of property except in order to secure workers’ rights and entitlements (benefits, wages, pensions, etc.). The Committee notes that the complainant and the Government agree that, in the event of bankruptcy, the law gives preference to debts owed to workers over any other debts. The Committee notes that the Government emphasizes that if any illegal action is committed by the receiver, an appeal can be made to the judge presiding over the insolvency and bankruptcy proceedings. The Committee also observes that the document drawn up by the representatives of the Local Conciliation and Arbitration Board declaring the non existence of the strike was declared null and void by the judicial authority further to an appeal from the complainant trade union.
5. 602. Hence the Committee concludes that the complainant trade union has been able to exercise its trade union rights and has legal remedies available for defending the interests of its members during the bankruptcy proceedings.
6. 603. As regards the additional information from the complainant organization regarding assaults against workers acting as “strike guards”, the Committee observes that the allegations show that the entry of the police and other officials into the CONFITALIA premises was carried out by judicial order. The Committee observes that the Government has not replied to these allegations and requests it to carry out an investigation into these allegations of assault. The Committee also requests the Government to indicate why the Conciliation and Arbitration Board did not conduct the proceedings to determine the circumstances of the strike. The Committee requests the Government to keep it informed on these two matters.