Report in which the committee requests to be kept informed of development - REPORT_NO356, March 2010

1. 1281. This complaint is contained in a communication dated 10 February 2009 from the Uruguayan Chamber of Industries (CIU), the National Chamber of Commerce and Services of Uruguay (CNCS) and the International Organisation of Employers (IOE). Subsequently, the complainant organizations sent supplementary reports in a communication of 16 October 2009.
2. 1282. The Government sent its observations in communications of 29 December 2009 and 11 January 2010.
3. 1283. Uruguay has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), and the Collective Bargaining Convention, 1981 (No. 154).

A. Allegations of the complainant

1. 1284. In their communication of 10 February 2009, the IOE, the CIU and the CNCS indicate that they have approached the Committee on Freedom of Association because the Government of the Oriental Republic of Uruguay has failed to fulfil the obligations that it assumed when it ratified Conventions Nos 87, 98, 144 and 154. The complainant organizations consider that the Collective Bargaining Bill put before Parliament in October 2007, item No. 1085 of the Committee on Labour Legislation of the Chamber of Representatives File No. 2159 of 2007, contains provisions which violate the provisions of the aforementioned Conventions as is explained below.
2. 1285. In addition, they consider it important to point out that the entire process of modification of labour legislation in Uruguay since 2005 has taken place with total disregard for the opinions and contributions of the employers’ side, and in the total absence of the social dialogue and tripartism which drives the International Labour Organization (ILO) and which are enshrined in Convention No. 144 and Recommendation No. 152.
3. 1286. The CIU is the most representative employers’ organization for the industrial sector in the country. It was formed in 1898 with the objective of promoting the interests of national industry, defending its rights and stimulating the country’s industrial growth. Its organization is profoundly democratic in structure. The country’s most important industries, as well as smaller industrial workshops are represented in it. The CIU has always been concerned to maintain constant dialogue with the government authorities, seeking to ensure that the private and public sectors can work together with a common aim: peace, happiness and prosperity for all the country.
4. 1287. The CIU’s chief objectives, consistent with the paramount interests of the country and the Constitution of the Republic, are as follows: (a) to defend the rights and legitimate interests of national industry; (b) to stimulate the growth and improvement of industrial activity by all the means at its disposal; (c) to promote the creation and development of industrial enterprises and related services, providing employers with all possible technical tools and support services; (d) progressively to improve productivity and conditions of work; (e) to foster the internationalization of industrial enterprises; and (f) to encourage affiliation to the CIU of organizations with which it has shared objectives and interests.
5. 1288. The CIU is composed of 48 trade organizations and over 1,100 affiliated companies. Together with the CNCS, the CIU is undoubtedly the most representative organization of the employers’ side in Uruguay. It is a member of the IOE, the sole organization which represents employers’ interests in the social and labour sphere internationally.
6. 1289. The CNCS is the trade representative body of the Chamber of Trade, founded in 1867, since when it has represented the commercial employers’ side and more recently, the developing services sector. Currently, it has some 15,000 members and 115 trade organizations, 22 of which represent business interests within the country. It thus covers the entire territory of the Republic. The CNCS and the CIU are the two employers’ institutions recognized by the ILO in Uruguay, and regularly attend its annual Conference.
7. 1290. The complainant organizations consider that the Collective Bargaining Bill put before Parliament in October 2007, item No. 1085 of the Committee on Labour Legislation of the Chamber of Representatives File No. 2159 of 2007, contains provisions which violate the provisions of the aforementioned Conventions as is explained below. The complainants indicate that for greater clarity, they will divide their complaint into the various subjects concerned.
8. 1291. The complainants indicate that Uruguay 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), in 1954, the Collective Bargaining Convention, 1981 (No. 154), and the Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144), in 1987. The complainants refer in chronological order to the process of the passing of the labour law reforms from 2005 up to the present, culminating with the submission to Parliament of the Bill to create a system of collective bargaining to which we will refer.
9. 1292. According to the complainant organizations, the Uruguayan Government, which took office on 1 March 2005, embarked on a fundamental reform of labour law in total disregard for the business sector, total lack of consideration for the contributions of the sector, a total lack of recognition of employers’ rights in a context where social dialogue and effective tripartite consultation was totally absent. It is against this background that they passed a series of laws which support this assertion and which are briefly described below:
   • – Decree of the Executive Power, No. 145, dated 2 May 2005, repeals Decree No. 512 of 19 October 1966 and Decree No. 7 of 4 October 2000, which allow the Ministry of the Interior through the police to remove workers from companies occupied by them. It should be emphasized that the said Decree was issued without any form of consultation, communication or notification of any kind or nature, amending laws which regulated that particular aspect which had been in force for 40 years. As explained below, this would bring about a true “state of defencelessness” of employers who were the subject of this unlawful measure taken by workers outside the clear and powerful constitutional provisions. Indeed, article 7 of the Constitution of the Republic enshrines the right to private ownership when it states that “the inhabitants of the Republic have the right to be protected in the enjoyment of life, honour, liberty, security, work and ownership”. Decree No. 145/2005, published in the Diario Oficial (Official Journal) on 6 May 2005, orders the parties to a dispute to resort to law in that “the dispute between private individuals must be heard by the Judicial Power”. The preambular paragraphs of the Decree start from the false premise that all disputes or disputes of interest must be resolved in the courts although Uruguayan legislation itself recognizes compulsory prior conciliation through the administrative process in the Ministry of Labour and Social Security. In addition, preambular paragraph III of the Decree in question provides that “it is pertinent to derogate the regulations concerned, in order that the interested parties may resort to the appropriate judicial process in order to preserve and guarantee the rights in question”, forgetting that there always was and remains the possibility of recourse to the courts to resolve a dispute between parties. In short, without achieving a consensus and betraying the tripartism much trumpeted by the Government, the applicable laws were changed after over 40 years without any kind of participation or effective consultation, and contributions were not sought from the employers’ side. Furthermore, Decree No. 145/2005 does not draw attention to the fact that it violates the Constitution when it grants primacy to the right to strike enshrined in article 57 over the right of ownership enshrined in article 7.
   • – Act No. 17930. Article 321 of Act No. 17930 of 19 December 2005 (National Budget Act), submitted by the Government to Parliament and published in the Official Journal on 23 December 2005, provides for the creation of the Register of Offending Companies in the ambit of the Inspectorate-General of Labour and Social Security (this Act was passed without any consultation with the employers’ side).
   • – Act No. 17940. Act No. 17940, published in the Official Journal on 10 January 2006, set out trade union powers, deduction of trade unions dues, trade union leave and other workers’ rights without setting out, or even contemplating, any of the employers’ rights which the sector had claimed insistently (the brief consultations held were clearly intended to “legitimize” a decision that had already been taken by the Government).
   • – Decree No. 66/06 of 6 March 2006, published in the Official Journal on 10 March 2006, regulates the provisions of Act No. 17940 on trade union activity (the contributions and suggestions by the employers’ side to which it refers were not taken into account in the content of the Decree).
   • – Decree No. 263/06 of 7 August 2006, published in the Official Journal on 16 August 2006, which regulates the Register of Offending Companies created by Act No. 17930 (without any prior consultation with the employers’ side).
   • – Act No. 18091, published in the Official Journal on 19 January 2007, which increases the prescription period for labour credits (without any prior consultation with the sector and at the same time as a committee was created and appointed by the Government to discuss labour matters).
   • – Act No. 18172 of 31 August 2007, on filing of accounts and a budget report for the year 2006, article 346 of which establishes the joint and several liability of owners, partners or directors or their legal representatives for breaches of safety and prevention rules, at the same time creating and appointing a committee with the Government to discuss the other subjects mentioned in the previous paragraph. Again, this is a case of another law passed without any regard for the opinion of the employers’ side.
   • – Act No. 18099 of 28 December 2007, referring to the subcontracting, and intermediation of labour in clear opposition to the proposal of the employers’ side and without taking account of the views expressed.
   • – Decree No. 291/2007 published in the Official Journal on 20 August 2007, regulating Convention No. 155 of the ILO, was issued in the face of the expressed opposition of the employers’ side, which for many months had asked for various contributions to be taken into account but which were not included in the Decree.
   • – Act No. 18251 of 6 January 2008, which amends Act No. 18099. Yet again, this law was passed in the face of clear opposition to what had been requested by the employers’ side, and did not include any significant contribution, as the consultations did not respect the principles which, according to the ILO, should govern them, that they should be effective and in good faith.
   • – On 15 October 2008, a bill was put before Parliament for the creation of a system of labour relations and collective bargaining without any kind of prior consultation and containing provisions in clear violation of Conventions Nos 87, 98 and 144, as will be explained below.
10. 1293. The complainant organizations indicate that the Government had been characterized by the casual and ineffective convocation for the formation of certain forums of a tripartite character, in which the employers’ side was represented, in the ever vain hope that their contributions would be heard and respected. Far from that, the impact of the employers’ side in the formation of laws was and is null. These forums or committees do not take any heed of the aspirations of the sector nor the rights of employers. Thus they create inequity, arbitrariness and consequently a dangerous imbalance in the system. In consequence, they regret to observe a lack of genuine social dialogue and effective tripartite consultations in Uruguay, despite constant efforts and interest expressed in recent years by the complainant chambers to strengthen relations and collaboration with the Government.
11. 1294. The list of legislation introduced by this administration and the fundamental changes to labour law and labour relations involved make effective tripartite consultation a vital necessity. The complainant organizations assert and provide evidence that in Uruguay there has been limited dialogue in the convening and holding of meetings which do not seek to reach agreements or accept contributions. They state that in many cases, the invitation to consultations is sent only 24 hours in advance, based on working papers previously prepared by the Government, with no real prospect, for the employers’ side, of analysing it thoroughly, consulting and introducing suggestions and contributions. In short, the legislation described, which involves enormous changes, was introduced without due and proper consultation with the employers’ side.
12. 1295. The complainants indicate that they have repeated on many occasions that it was necessary to create a proper system of labour relations. However, the Government persisted in the dangerous idea of generating a series of isolated, disorganized, general laws, and thereby generated legal uncertainty which is directly prejudicial to the employers. Moreover, it seeks to regulate only certain partial aspects of labour relations, giving rights to only one of the parties, the workers, while ignoring employers’ rights.
13. 1296. Since the Government, on 1 March 2005, communicated its intention to make fundamental labour reforms, the business chambers appearing here have been at all times ready to engage in serious, productive and effective dialogue, in order that the prospective legislation would reflect the aspirations of the social partners on an equitable basis, balancing the rights of the workers and those of the employers. In this regard, and in principle, there was a clear interest in complying with article 57 of the Constitution which recognizes and declares that trade unions have the right to strike, establishing the law that will regulate the exercise of that right.
14. 1297. The Collective Bargaining Bill sent to the national Parliament by the Government deserves special attention. In general, and as will be explained, if the Bill becomes law, companies’ powers of organization and management will be compromised, efficiency and productivity will be affected together with the industrial fabric, without any benefit to the workers. As mentioned above, the Bill was not offered to the employers’ organizations for consideration or tripartite consultation, thus violating the fundamental principles of the ILO.
15. 1298. According to the complainants, and as shown by the statement in support of the Bill sent to Parliament, it is intended to create a “national collective bargaining system”. In consequence, it is highly significant that the law itself refers to matters such as the “express omissions”, which shows Uruguay as a country governed by minimal regulation of collective labour law. The justification states that “Collective labour relations, in the traditional sense, form a triad composed of the trade union, collective bargaining and disputes”. Yet, while the Bill says nothing about the first pillar of this triad, it does talk about collective bargaining and disputes. Thus it is clear that the objective of the law is to regulate collective bargaining and disputes, but not the third component of the “triad” that it mentions, namely, the trade union. This leads to an imbalance to the direct detriment of the employers.
16. 1299. As described, the law which seeks to create a “system” says nothing concerning protection of the right of ownership, which includes the right to ownership of the means of production and especially the product of the activity of the factors involved in the process. It makes no mention of protection of the company’s assets. It omits to refer to the freedom of trade and industry which includes the freedom to form a company, and the right of an employer to organize and manage which implies, in turn, the right to manage the company and the right to make changes. It said nothing about the right to safeguard employers’ interests against measures which are not covered by the right to strike. The law says nothing about the rights and obligations of organizations or the responsibilities of organizations or their representatives.
17. 1300. It does not contain provisions on the system for adopting decisions in disputes or the corresponding obligation of liability for damages and injuries caused by breach of agreements. It says nothing about the duty of peace, prior notice of the adoption of certain measures, nor the right to work of those workers who are not in agreement with the adoption of certain measures. In short, it seeks to create a system which fails to fulfil the constitutional requirement set out in article 57 of the Constitution of the Republic which requires regulation of the exercise of the right to strike. Moreover, it states in the justification that “the intention of the Bill is to create legislation which puts in the hands of the actors in labour relations a series of procedures to allow bargaining”, but it does not seem reasonable to believe that articles 21–24 permit or allow the possibility of bargaining. They do not believe that a violation of the right of ownership “permits or allows the possibility of” bargaining.
18. 1301. The Bill contains a Chapter I concerning “Fundamental principles and rights of the collective bargaining system”. This chapter is nothing more than a mere declaration of principles without the least basis in fact as stated above and which will be duly supported by evidence. Article 4 of the Bill, when it provides for the “obligation to bargain in good faith”, establishes that “the parties must also exchange the necessary information to allow the normal conduct of the collective bargaining process. In the case of confidential information, the communication thereof carries with it the implicit obligation of secrecy”. The complainants consider that this article alters the necessary balance between the parties.
19. 1302. The fact is that it contains the express wording “obligation of information”. Notwithstanding that this was part of an agenda for discussion and bargaining which was coordinated with the Government, it introduces this aspect in the Bill, forgetting that this obligation to bargain in good faith and to provide information is only possible if the parties are structured in a transparent and regulated organization for the reasons which will be explained below.
20. 1303. The complainants indicate that most of a company’s information is confidential, since from it can be inferred the strategic plans it has drawn up to market its products or services. It is not possible to guarantee the “obligation of secrecy” which the law imposes if the trade union cannot be held liable in law for breach or non-fulfilment of this obligation. As the right to strike as set out in article 57 of the Constitution is not regulated in domestic law, it is not possible to guarantee that workers will comply with obligations, since the trade union does not have legal personality and thus does not exist in law. In consequence, it is not possible to hold workers or the trade union responsible in the event of breach of the “obligation of secrecy”. In a nutshell, under the Bill, the employer is not guaranteed either compliance, or remedy or compensation or even the certainty of being able to take legal action to remedy any possible injury.
21. 1304. Chapter II of the Bill creates a body which, according to the complainants, warrants serious criticism in that it violates one of the guiding principles of tripartism and fundamentally alters the necessary balance between the parties by creating dangerous imbalances which undermine a healthy system of labour relations. It creates the Higher Tripartite Council as the “body for the coordination and governance of labour relations”. It will be composed of “nine delegates of the Executive Power, six delegates of the most representative employers’ organizations and six delegates of the most representative workers’ organizations”. The composition of this Council is seriously questioned for several reasons.
22. 1305. In the first place, as set out in the preambular paragraphs of the Bill sent to Parliament, it is granted wide powers, to the extent that it may “consider and pronounce on questions related to tripartite and bipartite bargaining (article 10, paragraph (d)). Thus, the Council, placed at the head of the system, must have an overall view of the phenomenon of collective bargaining in all its dimensions”. This clearly shows that the Council will have to be established as the governing body in collective bargaining in all its dimensions, overlooking the fact that, by definition, collective bargaining is bipartite, free and voluntary. In this, the Bill demonstrates a marked “interventionist and dirigiste” vision of labour relations. There is no doubt that interventionism by the Government in labour relations, as contemplated in the Bill, not only does not foster free and voluntary collective bargaining thereby violating Conventions signed by the country, but also has a serious impact on the autonomy of the social partners in collective bargaining.
23. 1306. The complainants maintain that the powers assigned to this body violate the principle of employers’ freedom of action, as it allows the Government to “pronounce” without having been requested or asked by them to do so. Secondly, the Government, through its representatives, has more votes than the social partners, nine in total, while the employers and workers each have six.
24. 1307. Even more significant, however, is that the law allows the Council to deliberate “in advance” on the “establishment, application and modification of the national minimum wage and that determined for sectors of activity which cannot fix them through collective bargaining” (article 10, Powers, paragraph (a)). Worded in this way, the power might be seen as vague and imprecise and thus diffuse and unlimited. Despite the foregoing, a reading of it leaves no room for two opinions. It implies that the Government’s interventionism and dirigisme will cover the fixing of wages in any sector of activity where an agreement is not reached in bipartite collective bargaining. Collective bargaining will not be free and voluntary, as it will be conducted under the threat enshrined in this article. In short, the Government is endowing itself with an arbitration mechanism which substitutes tripartite bargaining for bipartite, as a mechanism prior to direct intervention by the Government in collective bargaining between the company and its workers.
25. 1308. Furthermore, this pronouncement of the Council, composed as it is of a larger number of government representatives, alters the balance between the parties and transforms it in practice into compulsory arbitration on questions from which the Government should remain totally aloof.
26. 1309. Chapter III of the abovementioned Bill provides that collective bargaining may take place in wages councils which may be convened by the Executive Power “ex officio or mandatorily at the request of the organizations representative of the activity sector concerned” (article 12, Powers, second paragraph). This article, like those mentioned above, is in clear violation of the principle of free and voluntary bargaining set out in the relevant Conventions and the many pronouncements of the Committee on Freedom of Association.
27. 1310. In other words, the convening and establishment of the wages council at the request of the workers or the Government itself, given the greater number of members on the Government side and the possibility that the Council can decide by majority vote, transforms collective bargaining into compulsory arbitration. It is crystal clear that Article 4 of Convention No. 98 refers to free and voluntary negotiation and excludes coercion, and that the Committee on Freedom of Association has considered that for collective bargaining to be effective, it must be voluntary in character.
28. 1311. Wages councils as they operate in Uruguay and as they are intended to be regulated in the Bill have been in clear violation of the Conventions concerned. The Government has played an interventionist and dirigiste role in collective bargaining, forgetting that the Committee has established that the sole and mere intervention of one representative of the public authority simply in the drafting of collective agreements, if not confined to a merely technical assistance role, cannot be reconciled with the spirit of Article 4 of Convention No. 98.
29. 1312. Chapter IV concerning bipartite collective bargaining also warrants serious objections and we regard them, too, as clearly in violation of the abovementioned Conventions. The complainants consider that the Bill in question contains very considerable defects which should be addressed: deficit of representativeness, adaptability and legal certainty. Article 14 provides that “... in company collective bargaining, in the absence of a workers’ organization, bargaining authority shall pass to the most representative higher level organization ...”. It is possible that “... the absence of an organization (with all that the word entails) does not mean the absence of collective relations within the company ...”. Moreover, the organization of the branch of activity may “... be representative and strong at branch level but not present at company level ...”. The Bill gives precedence to the hierarchical principle and this, in the opinion of Professor Pérez del Castillo which we fully share “... conspires against the function of the collective agreement as a ‘bespoke suit’ for which the rules are made ...”. He maintains that the higher level may be an average of the companies of which it is composed, but it is “... very different at the specific lower level of a given company”. We agree that the proposed law sidelines the “represented collective interest”.
30. 1313. Moreover, “administrative checks to test representativeness and consultation” are missing from the Bill in question. The lack of adaptability refers to the impossibility under the Act concerning the ineffectiveness of a legal provision which prevents an agreement being a true “bespoke suit”. The deficit of legal certainty refers to the idea “... we are provided with a rapid legal process for failure to fulfil the obligations assumed under the Convention, peace clauses, breach of confidentiality of information, settlement of disputes on questions of representativeness ...”, and this leaves serious gaps in a bill on which there was a lack of consultation.
31. 1314. When it refers to the duration of the collective agreement in its article 17, the Bill provides that “a collective agreement whose term has expired shall remain fully in force with respect to all its clauses until substituted by a new agreement”. In this regard, we must recall that, as the Committee has said, any extension of collective agreements should be following tripartite analysis of the ensuing consequences for the sector to which it applies.
32. 1315. As regards Chapter V on prevention and settlement of disputes, the complainants state that articles 21–24 are clearly in violation of international Conventions signed by Uruguay (these articles refer to the occupation of the workplace during a strike; these articles were withdrawn by the Government).
33. 1316. The complainant organizations indicate that, in short, the Bill does not enshrine a system, but a set of laws which partially regulate certain aspects in favour of only one of the parties. They assert that the Bill in question contains deliberate omissions: it regulates only workers’ rights, but does not subject them to obligations of any nature or kind, it does not refer to employers’ rights, it gives legal status to a manifestly unlawful action which violates rights enshrined in the Constitution, and it confers on the Executive Power a maximum degree of intervention in collective bargaining between employers and workers. All of this ultimately gives rise to dangerous imbalances in the system, and one-sided and thus arbitrary solutions. In conclusion, the complainants consider that the Government is acting on the fringes of what is lawful in contravention of the provisions of the international Conventions to which it is a party, namely Conventions Nos 87, 98, 144 and 154.
34. 1317. In their communication of 16 October 2009, the complainant organizations report the approval on 18 August 2009 by the national Parliament, of the Collective Bargaining Act, which is the subject of this case. They draw the attention of the Committee on Freedom of Association to the failure by the Government of the Oriental Republic of Uruguay to fulfil the obligations it assumed when it ratified Conventions Nos 87, 98, 144 and 154, by passing the Bill which is the subject of the case.
35. 1318. The complainants state that the recently passed Act, despite certain specific changes introduced in it, is in flagrant breach of the international Conventions signed by Uruguay. They state that, as has been explained, there were no “discussions” that were “free”, “detailed”, in “good faith”, in a “framework of trust” and “mutual respect” with “sufficient time to express their points of view and discuss them in depth with a view to reaching a satisfactory compromise”.
36. 1319. The Bill passed by Parliament and promulgated by the Executive Power as Act No. 18566 enshrines direct intervention by the Government in collective bargaining in accordance with the articles described below. Article 7 of the Act creates the Higher Tripartite Council as the “body responsible for the coordination and governance of labour relations”. With regard to its composition, the Act provides that the Council shall consist of nine delegates of the Executive Power, six of the most representative employers’ organizations and six of the most representative workers’ organizations.
37. 1320. According to the complainants, the above warrants the following considerations. Firstly, it is a body which will interfere directly (“coordination and governance”) in the principal aspect of labour relations, which is collective bargaining. Secondly, the greater number of delegates from the Executive Power ensures that, in nominal voting, decisions will be in accordance with the interests and vision of the Government. Indeed, article 9 establishes an absolute majority of members, in which the sectors do not have equal representation with the Government. This is unquestionably a violation of tripartism, the guiding principle of the ILO.
38. 1321. One of the most worrying aspects for the complainant organizations, however, is that the Council has an ex officio power of convocation which allied to the quorum, transforms it into a powerful executing agency of the policies which the Government wishes to implement. Notwithstanding the above, special attention should be paid to article 10 which refers to the powers of the Council. The complainant organizations indicate that special consideration should be given to paragraphs (d) and (e). Indeed, paragraph (d) provides that the Council’s powers will include “to consider and pronounce on questions relating to tripartite and bipartite bargaining levels”. In addition, paragraph (e) provides that it may “study and adopt initiatives on subjects which it considers pertinent to promote consultation, bargaining and the development of labour relations”.
39. 1322. The concern of the complainant organizations is that the new body will be able to decide on any question related to bargaining levels and adopt initiatives to develop labour relations. As conceived, with the ex officio right of convocation, the greater number of delegates of the Executive Power, nominal voting, and powers defined in a broad, ambiguous, confused and ill-defined manner, this is undoubtedly a case of a body whose objective is clear: state intervention and dirigisme in labour affairs and collective bargaining. It thereby violates the autonomy of the actors and parties and the principle of free and voluntary collective bargaining enshrined in Convention No. 98. In a nutshell, moreover, the provisions of the abovementioned articles are contrary to the many pronouncements of the Committee on Freedom of Association which establish that public authorities must refrain from interfering to limit the right of the parties to free negotiation.
40. 1323. Article 17 of the Act provides that “a collective agreement whose term has expired shall remain fully in force with respect to all its clauses until substituted by a new agreement”. It is clear from this that it establishes a compulsory extension of the term of collective agreements, which is an interference in free collective bargaining. In article 12, when it refers to tripartite wages councils, whose functioning, according to a report of the Committee on the Application of Standards of the International Labour Conference 2009, has been the subject of observation, it provides that “decisions of wages councils shall take effect for the respective group of activity once they have been registered and published by the Executive Power”. The requirement of publication for an agreement to enter into force is not fully in conformity with the principles of voluntary negotiation established in Convention No. 98, as the Committee has stated clearly.
41. 1324. Most importantly, however, is that this Act ultimately enshrines something that was precisely a reason for observation by the Committee of Experts on the Application of Conventions and Recommendations in 2008 when it examined the application by Uruguay of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98). According to the complainants, the observation of the Committee of Experts acquires special relevance since it was in response to the considerations of the Government itself. In short, the Act ultimately enshrines intervention and interference by the public authorities in clear violation of the abovementioned international Conventions. In conclusion, according to the complainant organizations, the Collective Bargaining Act passed by the national Parliament constitutes a violation of those Conventions.

B. The Government’s reply

1. 1325. In its communication of 29 December 2009, the Government states that it must respond to the complainant proceeding filed by the IOE, the CIU and the CNCS for alleged violations of Conventions Nos 87, 98, 144 and 154. The Government states that the focus of the complaint is linked to the Collective Bargaining Bill submitted by the Executive Power to the national Parliament and that the complainant organizations consider that the process of amending Uruguayan labour legislation, which began in 2005, took place with total disregard of the employers’ sector or their contributions, and thus in an absence of tripartism and social dialogue.
2. 1326. The Government states that it will demonstrate the lack of justification of the action, and the eventual benefits of the Bill which, as is natural in any democratic process, was subject to countless amendments from its submission to its final approval by the national Parliament, which is a crucible of all the political forces in the country and where the various sectors were invited to expound their positions.
3. 1327. The Government indicates that, before analysing the Bill, a clarification must be made which the complainants omitted to mention. Namely, the President of the Republic gave an undertaking to the employers’ sector and the public (in that it was communicated to the press) to withdraw articles 21–24; i.e. those which referred to occupation of workplaces, from the original Bill. In addition, the Minister of Labour and Social Security conveyed that decision on more than one occasion to the parliamentary authorities (Committee on Labour Legislation of the Chamber of Deputies), several meetings with employers and the press in general. Consequently, the employers (by which we mean exclusively the CIU and the CNCS) should not have omitted to mention that information to the Committee. It does not seem an appropriate practice for a proceeding governed by principles so dear to democratic institutions and justice as good faith and fairness.
4. 1328. In domestic law, which obviously does not bind the Committee but which reflects a tradition or part of the cultural heritage of our country, paragraph 1 of article 5 of the General Procedures Code states: “Good faith and fairness – the parties, their representatives or assistants and, in general all participants in the proceedings, shall suit their conduct to the dignity of the law, the respect due to the litigants and fairness and good faith”. In consequence, any allusion to the aforementioned articles by the employers’ sector masks a spurious intent which may possibly confuse the Committee, therefore we shall make no reference to those articles or any comment thereon by the complainants.
5. 1329. Secondly, the Government reiterates its assertions in the first paragraph of this reply, namely that the employers formulated a complaint on a bill, in the drafting of which they were invited to participate as in the case of all the other bills to amend the labour system. However, as will be shown below, they initially took part in the process and then, voluntarily, withdrew. The original Bill, submitted to a bicameral parliamentary process, was subject to many changes (including some suggested by the employers themselves) and the Bill (annexed) was passed. The complainants then added new arguments, taking positions at one time or another which contradicted each other and abusing the procedural process in the case. For all these reasons, the Government requests the Committee’s indulgence when considering this reply, which is due to the confusion introduced into the proceedings by the other side.
6. 1330. The Government indicates that it will try to set out its reply in a logical order following the initial list suggested by the employers’ organizations, following the numbering of the chapters in their submission.
7. 1331. With regard to Chapter I which refers to the background of the complainant employers’ bodies (setting out their history and action from their perspective), the Government emphasizes that these are not the only employers’ organizations in the country. For example, there is the Rural Association of Uruguay which is not represented by any of these associations, the construction industry chambers, etc. Chapter II sets out the subject of the complaint which, as mentioned above, is based on the assertion that the Bill concerned would (in the opinion of the employers) contravene certain international labour Conventions, and that the employers were not involved in the process prior to the adoption of laws passed since 2005. In Chapter III, they identify the ILO Conventions ratified by the country which the employers’ organizations allege were violated by the Collective Bargaining Bill.
8. 1332. As regards Chapter IV, the Government states that in 2005, when the present administration took office, the Uruguayan labour scene was dismal. Minimum wages were at levels which were frankly appalling, collective bargaining hardly existed, freedom of association was constantly suppressed, affiliation rates both in the workers’ and employers’ sectors were at alarming levels. With respect to the treatment of the national minimum wage, the Government suggests that reference should be made to the observation of the Committee of Experts in 2000 and 2002 concerning the application by Uruguay of Convention No. 131.
9. 1333. With regard to the trend in real wages, the reality under the economic policies applied since the 1990s shows that of the 700,000 private sector workers in the country at that time, only 16.28 per cent had collective bargaining. Moreover, from the wages point of view, up to 1999, real wages grew by only 7.2 per cent in seven years. Up to 2001, they stagnated, and then in the last two years there was a very sharp fall. Trade unionism, without any kind of promotion, in contravention of article 57 of the Uruguayan Constitution, had collapsed to not more than 8 per cent of all employed workers.
10. 1334. According to the Government, the legislation contained flagrant contraventions of international labour Conventions. For example, rural workers or domestic workers did not have a limited working day nor the right to bargaining in wages councils. Those bodies were not convened after 1990, and the country was under constant observation by the ILO supervisory bodies for failure to comply with Convention No. 131. There were less than 100 company-only collective agreements which covered less than 10 per cent of the total workforce. Data provided by the Documentation and Records Division in the National Directorate of Labour show that: in 2000, 62 collective agreements were registered; in 2001, 77 such instruments; in 2002, 88 agreements were registered; in 2003, 115 agreements were registered; and in 2004, 55 collective agreements.
11. 1335. As regards protection of freedom of association – a fundamental human right – a trade union official or militant could be dismissed without the right to reinstatement. The Committee on Freedom of Association had referred to this matter. As regards one of the pillars of the present complaint, there was no social dialogue or tripartism, which is now demanded so stridently by the employers’ sector, in disregard of the position before 2005. Minimum wages, with the exception of the national minimum wage which was set at a shameful level, were set by the market, although that market was marked by high unemployment (note that between 2002–03, unemployment was above 18 per cent in the open market) and the abundant informal work (estimated in those years at around 40 per cent).
12. 1336. In 2002 and 2004, numerous collective agreements were signed on terms which diminished workers’ rights and in contempt for them. When the new Government took office in 2005, one of its first measures was to re-establish wages councils. For 15 years (from 1990 to 2005), these bodies had not been convened, despite the fact that the Act which created them (Act No. 10449 of 1943) was fully in force. Despite that, the employers’ side never formulated a complaint based on the failure to convene those bodies. The reason is obvious. The employers today are still promoting a policy of deregulation and impoverishment of workers’ wages and conditions of work. What are the powers of these councils? In principle, they can be described as tripartite bodies (employers, workers and the State) whose chief responsibility is to set minimum wages by branch of activity and category.
13. 1337. They also have other powers such as to act as conciliation bodies in the case of collective disputes, fix wage increases for the remaining workers, etc. As a first step, the Higher Tripartite Council was set up, with the participation of the three sectors (note the broad social dialogue), in which it was unanimously agreed how those bodies would function. Twenty activity groups were organized which in turn, internally, also by consensus of the three sectors, established subgroups. The latter now far exceed 200 (due to the particular characteristics of the rural sector, a similar council was created at the same time which created three groups and several subgroups).
14. 1338. Similarly, a framework for discussion was established in the public sector, which reached a framework agreement and by consensus a law on collective bargaining for the public sector (which is also annexed to this reply) and which has a certain similarity to that of the private sector. Finally, a wages council was set up for domestic or homeworkers, leading to a collective agreement which is in force until next year.
15. 1339. Three bargaining rounds took place: the first in 2005 which resulted in 93 per cent of collective agreements being adopted unanimously or by a majority. The second took place in 2006, which brought the level of agreements to 96.5 per cent and the third in 2008, with agreement in 91 per cent of cases. It should be noted that in all cases, over 80 per cent of collective agreements were reached unanimously. The Government states that this shows the promotion by the Government of broad tripartism, as well as a policy based on the fullest social dialogue, which not only took place in relation to minimum wages and the National Directorate of Labour, but also extended on a cross-cutting basis to the basic spheres of the Inspectorate-General of Labour and Social Security (creating tripartite committees to implement the provisions of Convention No. 155), the National Employment Directorate (creating the National Institute of Employment and Vocational Training, also with tripartite composition), the National Social Security Directorate (where there was national social dialogue on social security leading to agreement on reform of unemployment insurance and better access to pensions) and the National Audit Office.
16. 1340. Mention should also be made of a significant growth in real wages, which rose on average by over 26 per cent, according to data provided by the National Statistical Institute. This was accompanied by a fall in unemployment to levels which, according to the latest measurement for these years, was around 6.4 per cent, one of the lowest levels since this indicator has been measured, and below the country’s structural unemployment. As a consequence, the level of informal work in the labour market has declined to around 23 per cent. Today over 1,500,000 workers pay social security contributions and for the first time ever, the pensions institute showed surpluses in both 2008 and 2009. In the legislative sphere, several laws related to the world of work and social security have been passed. In particular, due to their importance, it is worth highlighting the following: (a) Act on the promotion and protection of trade union activity (its adoption was crucial in the context of promoting collective bargaining); (b) two laws on subcontracting or outsourcing of corporate services; (c) the new Act on homeworkers and domestic service; (d) the Act limiting the working day of rural workers; (e) laws on special licences; (f) the Unemployment Insurance Reform Act; (g) the Collective Bargaining (Public Sector) Act; and (h) the Act on reform of the labour process.
17. 1341. The Government indicates that it has pursued a policy of democratizing social dialogue in all possible areas, including social security, based on the purest of tripartism. Negotiating on a tripartite basis in good faith does not necessarily mean achieving unanimity or consensus. Of course, unanimity or consensus is the ideal, but it presupposes that each social interlocutor is prepared to give and take. If one of the parties to the negotiation resorts to a systematic strategy of refusing any kind of reform, it means that the rest of the sectors involved can decide the matter by majority. The pursuit of social consensus cannot be allowed to hold up, let alone block, the reforms needed by the country to continue its progress.
18. 1342. Moreover, several political parties of all philosophical persuasions of the Uruguayan social spectrum are represented in the national Parliament, the natural body where proposed laws are sent for discussion and approval. This means that if discussions in pursuit of consensus are exhausted, the Bill is sent to the legislative body and each professional group is heard.
19. 1343. The Government indicates that with respect to the reiterated theme of occupations, articles 21–24 of the initial Bill (relating to the subject of occupations) were withdrawn by express order of the President of the Republic himself, after being requested to do so by the employers. This is another example where the employers’ voice was again heard by the Government.
20. 1344. The Government states that 2009 is an election year in Uruguay and that, for this reason, the complaint seems to be framed as a political statement rather than a complaint against a bill. Indeed, a variety of statements are formulated which will be inclined to confuse the Committee on Freedom of Association. The Government states that authentic tripartism and social dialogue have been established in the country and that the complainant’s assertions to the contrary depart from the facts. The Government makes reference to certain spheres of social dialogue, tripartism and collective bargaining created since 1 March 2005, the date when the Government took office: re-establishment of wages councils (considered by the doctrinaire as a fundamental instrument, perhaps the most important, of participation and social dialogue in Uruguay, since it has the potential to function as a mechanism for governing the system of labour relations); the so-called space for social dialogue, the Compromiso Nacional; the launching of the National Economic Council; and the tripartite membership of the following bodies: the Committee on the Eradication of Child Labour (chaired by the Inspectorate-General of Labour), the Equality and Gender Commission (which functions in the National Directorate of Labour), the Occupational Safety and Health Commission (chaired by the Inspectorate-General of Labour), the Committee on Classification and Grouping of Labour Activities (chaired by the National Directorate of Labour), the Tripartite Committee for the Construction Industry (chaired by the Inspectorate-General of Labour), the Construction Workers Unemployment and Pension Fund (chaired by the National Directorate of Labour), the Tripartite Committee for the Metal Industry (chaired by the Inspectorate-General of Labour and Social Security), the Tripartite Committee for the Shipping Industry (which has issued orders based on consensuses reached in its deliberations), the Tripartite Committee for the Dairy Industry (also chaired by the Inspectorate-General of Labour), the Tripartite Committee for the Chemical Industry (also chaired by the Inspectorate-General of Labour), the Tripartite Committee for the Regulation of Convention No. 184, and the National Dialogue on Social Security which ended with agreement between the three parties. Many of these spheres enjoy or have enjoyed support or technical assistance from the ILO itself.
21. 1345. The employer sector has always been heard. It should be noted that in a climate of protection of social dialogue, and so much effective tripartism, it is impossible that some of their positions would not have been taken into account and it is reasonable to think and easy to demonstrate that in some matters they have imposed their points of view. Not in vain, either, as in the case of wages, over 80 per cent of the activities arrived at collective agreements unanimously. This is indisputable evidence that defies argument. The agreements mentioned are published in the Official Journal and posted on the Ministry’s web site. The Government adds that what happened is that in Uruguay from 1990 to 2005, there was hardly any social dialogue, because state labour relations policy was to do nothing. At that time, the workers were never in a position of parity to demand improvements from the employers’ sector.
22. 1346. The Government also indicates that it observes a constant negative attitude on the employers’ side on the majority of subjects proposed for social dialogue. If it was a negative attitude in that they offered other alternatives, it would help to enrich the instrument. However, in many cases, it was a negative attitude without a counter-proposal, or even unjustified. The Government maintains that it shows recklessness on their part to assert that the labour laws passed were not the product of social dialogue. The IOE, the CIU and the CNCS mention in their complaint a long list of laws and decrees where they were apparently not heard. The Government states that this is not true, as they are always heard; committees are set up, generally in the Ministry of Labour and Social Security, and they are received in parliamentary circles. That is, not to mention the many requests for interviews and exchanges of views with the Minister himself and other officials of the Secretariat of State.
23. 1347. The Government indicates that the employer sector was heard in the process prior to the passing of Act No. 17940 on Freedom of Association and Laws for its Protection; the passing of the laws on subcontracting and outsourcing; the passing of the laws on special licences; and the passing of Act No. 18091 on Prescription of Labour Credits. The Government maintains that opening a space for social dialogue, tripartism or collective bargaining does not necessarily require reaching an agreement. They will make every effort to do so, but when they fail, if there is partial consensus, the laws are put before Parliament with those partial agreements.
24. 1348. The Government states that the Bill was drafted on the basis of many contributions from highly qualified experts, some of them working for the Executive Power, others as parliamentarians or as parliamentary advisers, practising lawyers, officials of the Ministry of Labour and Social Security. At the time when the Bill was being drafted, none of those who participated could fail to take into account the recommendations of the ILO mission which visited the country in November 1986. The Executive Power was not, and is not, unaware that collective labour law is based on three pillars: the trade union, collective bargaining and the right to strike. This Bill does not seek to regulate those three pillars, but only to regulate one of them: collective bargaining. The complaint submitted omits to mention, maybe voluntarily, that freedom of association was regulated by Act No. 17940 by this very administration, after lengthy discussion, in which the employers opposed its regulation. This absence of regulation meant that the country was continually questioned by the ILO itself, since there were no mechanisms to generate stability for trade union officials or militants, and no action for reinstatement was available.
25. 1349. The system thus refers to one of the pillars, collective bargaining, those subject to it, organizational levels, purpose, etc. It does not talk of strikes or trade unions. There was originally a chapter on mechanisms for ending the occupation of companies, but the President of the Republic himself, as well as the Minister of Labour and Social Security, undertook before the employers themselves, the public and the parliamentary committees, that that aspect of the Bill would be dropped, and that can be seen in Act No. 18566 which was finally passed. It is therefore reiterated that the Bill refers only to collective bargaining. The Government therefore wonders why this Bill should have anything to say about protection of the right of ownership. That right is enshrined in the Constitution and the law, and its protection is essentially entrusted to the Judicial Power. It also wonders why it must refer to freedom of commerce and industry, when that is also supported by the Constitution and the law.
26. 1350. The Government reiterates that the Act left out the articles which sought to regulate occupations, it did not regulate the right to strike and, even less, measures which in the opinion of the national employers should not be covered by it. If the workers adopt this type of measure, the employers must take action before the judicial authority and it will be that authority, and that alone, which will determine whether or not it is a case of the right to strike. They must not complain to the administrative authority, which is not competent in the matter. However, the Bill and the current Act regulate a system of collective bargaining, indicating how the institutions, of which it is made up, are structured.
27. 1351. The Government indicates that the Bill contains a model which refers to collective bargaining, not the responsibility of the parties involved (whether workers or employers). This means that if it is a company, a group of companies, or one or more employers organizations’ that fail to comply with the agreement, it does not regulate their responsibility. That is not the purpose of the Act. In the latter case, it would be the subject of an act which regulates the life of trade organizations (whether workers’ or employers’), and that was not, and is not, the purpose of the Bill.
28. 1352. The Government also maintains in relation to the assertion that “... it does not seem reasonable to believe that articles 21–24 permit or allow the possibility of bargaining, that it does not believe that a violation of the right of ownership ‘permits or allows the possibility of’ bargaining”. The Government reiterates that the articles which are alluded to were excluded from the Bill a long time ago by order of the President of the Republic and are not included in the Act that was passed.
29. 1353. The Government indicates that it is proposed to analyse in rather more depth the content of the Act that was passed. The Act follows the changes that occurred in the practice of wages councils since 1985, reorganizing them and adding certain innovative solutions. It is structured in six chapters. The first refers to the fundamental principles and rights of the collective bargaining system, essentially based on Recommendations Nos 113 and 163 of the ILO. Chapters II and III set out the model of collective bargaining by branch of activity, which continues to be centralized up to the present. It basically amends certain key articles of Act No. 10449. Chapter IV is devoted to bipartite bargaining, i.e. classic collective bargaining by a company or group of companies. Chapter V introduces clauses for the prevention and settlement of collective disputes, which are not contained in current practice and the present powers of the National Directorate of Labour and the wages councils established in article 20 of the original Act No. 10449. Lastly, Chapter IV, which is the product of a last-minute political agreement, which was the subject of serious criticisms both by the trade unions and labour law doctrine, appears without a name, and refers to the peace clauses to be included in collective agreements.
30. 1354. The system is structured at three levels. The first has national or general scope, the second is branch of activity or productive chain and, finally, the last consists of the classic bipartite bargaining at company or group of companies level. A governing body is established at the first level with functions of governance of labour relations, the Higher Tripartite Council, which will act as a consultative body in the fixing of the national minimum wage and will organize the other levels (branch of activity or wages councils), etc.
31. 1355. At the second level, bargaining is structured by branch of activity or productive chain. It follows the traditional tripartite model that exists in the country; i.e. the bargaining that takes place in wages councils. The Act includes an interesting variable, albeit not defined in detail, that it can also be organized by productive chains. Lastly, at the third level, classic collective bargaining takes place.
32. 1356. Its predominant characteristic is that it is bipartite, which means that it takes place between an employer, group of employers, one or more employers’ representative organizations on the one hand, and on the other, by one or more workers’ organizations. In this respect, national doctrine has underlined that “trade unions have always distrusted the company agreement, either for fear that a generalization of the bargaining model could put the activity in crisis, or because they considered that at company level the trade union is weaker and thus the workers have less bargaining power. This distrust is not capricious but feeds on a reality which showed, especially in the period 1994–2004, that the company agreement very often meant a mere formula to reduce workers’ benefits”. The provisions of article 15 of the new Act are important, to the extent that they establish that the parties may bargain by branch, sector of activity, company, establishment or at any other level that they consider appropriate, but on condition that the lower bargaining levels may not diminish the minimum provisions adopted at a higher bargaining level, “except as agreed in the respective wages council”. This means enshrining what are commonly called opt-out clauses.
33. 1357. Chapter I, as the complainants recognize, refers to the fundamental principles and rights of the collective bargaining system. These articles do no more than assemble the principles of international labour law applicable to collective bargaining, set out in countless international agreements and especially the international labour Conventions which the employers believe to have been violated. With respect to the obligation to negotiate in good faith and the right to information (article 4), it seems to be a case of the historic opposition of the Uruguayan entrepreneurial movement to any proposal to introduce collective bargaining. The right to information stems from the right to negotiate in good faith and is extensively developed in Article 7 of ILO Recommendation No. 163.
34. 1358. The Government underlines that there can be no free, serious and productive collective bargaining without the inclusion of this type of obligation. In particular, because, without reliable data, no one can be certain what the bargaining is about. If the employers’ sector in a bargaining round declares that it is in a critical state and the workers do not even have the possibility of checking that, the result could be improper bargaining. The right to information is essential for collective bargaining and bargaining in good faith includes providing information so that the other party is in a position of equality.
35. 1359. In addition, as indicated in the justification prepared by the Executive Power with its submission to the national Parliament, article 4 partially reproduces ILO Recommendation No. 161 on collective bargaining, establishing mechanisms for exchange of information and consultations, and including the obligation of secrecy. It is not sought to subjugate a company’s confidentiality and secrets, but simply to achieve a degree of transparency in matters which relate to its present and future conditions. The employers saw an absence of substance in the article if it did not impose some kind of responsibility for any breach of the duty of secrecy, but the final wording of the Act was improved to take account of those criticisms with the addition precisely of the obligation of secrecy “... breach of which shall give rise to the civil liability of those in breach”.
36. 1360. With regard to the impossibility of enforcing the responsibility of trade unions due to the fact that there was no obligation on them to possess legal personality, the Government states that this is a half truth. It is true that the system of collective law, which is abstentionist by definition, based on the utmost freedom of association, does not require trade unions to have legal personality in order to be able to act in the world of work. In other words, acquiring legal personality is a requirement in their own interest. Constitutionally, article 57 of the Constitution promotes this type of organization by offering them exemptions from fees for acquiring legal personality. It is crucial to recall here that the State does not create the trade union. It forms itself. By granting it legal personality, the State does no more than recognize a pre-existing state of affairs and comply with an international, not to mention constitutional, obligation. In practice, the majority of trade unions at branch of activity level do have legal personality, thus if it is sought to take action against them for civil liability, there would be no obstacles from the point of national positive law. In any case, it is reiterated that the intended regulation has nothing to do with a law regulating collective bargaining. It would have to be the subject of a law on professional associations.
37. 1361. Article 5 of the Bill and the Act provides for communication and consultation between the parties, taking as a basis the principles included in ILO Recommendation No. 131 on consultation. It is not understood how this point could inconvenience the employers. Moreover, as indicated, in a climate of broad social dialogue and tripartism as developed by the current administration, there has been a surfeit of spaces for participation and consultation.
38. 1362. As regards Chapter II, to which the complainants object, creating the Higher Tripartite Council, the Government indicates that this does not involve anything new. It simply enacts in law a body created by decree of the Executive Power which has functioned on a tripartite basis in wage bargaining rounds from 2005 to the present and in which, in fact, the complainants participated as full members. As regards what happened before, Act No. 10449 did not establish this body, but refers only to the establishment of wages councils, without specifying the existence of a coordinating or governing body. However, prior to the de facto end of the Government which ruled in the country from 1973 to 28 February 1985, there was the National Programming Commission (Comisión Nacional Programática – CONAPRO), whose purpose was to act as a mechanism to coordinate the principal lines of action to be announced at the start of each new presidential term. Within the Commission there was a specialized group on labour relations which, among its other activities, was engaged in studying the re-establishment of wages councils, policies for setting the minimum wage, etc. Once it had concluded its work, the need emerged to keep this group and the so-called Higher Wages Council was set up. This was a body composed of high-level representatives of the labour relations system which had certain powers of governance, coordination, etc. with regard to wage matters.
39. 1363. After the end of the first post-dictatorship Government (1990), wages councils were never convened again until 2005, thus no traces of that body remained. When the present administration took office, it was decided as a matter of policy to re-establish the wages councils, issuing for that purpose Decree No. 105/2005 of 7 March 2005, which convened the bodies in question. In its article 3, the Decree created a Higher Tripartite Council with the following tasks: (a) to analyse and decide the re-classification of activity groups of wages councils and disputes arising in that respect; (b) the second task set out in the Decree was to “analyse and draft amendments to be introduced into Act No. 10449 of 12 November 1943”; and (c) in practice, the Higher Tripartite Council took on other powers: as the forum in which the Executive Power presented its economic plans for each round, it dealt with trends in each, and it sought to be a forum for initial discussion on the creation of a bill on promotion and protection of the right to organize, etc.
40. 1364. The Government states that it is impossible to analyse this body without first understanding the Bill as a whole. The Bill, which has now become the Act which establishes the national collective bargaining system, is structured basically at three bargaining levels: the first, macro, the Higher Tripartite Council, which will have the following powers: (a) to act as the consultative body prior to the fixing and/or modification of the national minimum wage and wages in those areas where they cannot be set by a collective bargaining process; (b) carry out classification of tripartite bargaining groups by branch of activity or productive chains, in each case designating the bargaining bodies in each sphere. That is what happened from 2005 onwards; (c) advise the Executive Power on the allocation of administrative resources in the light of decisions concerning the classification of companies. This function had also been fulfilled in practice, for companies in particular, by the Tripartite Commission on Classification and Grouping of Labour Activities; (d) study questions related to bargaining levels. For example, if a company agreement can affect the minima laid down in an agreement reached at branch of activity level, etc.; and (e) study and adopt initiatives to promote consultation, collective bargaining and the development of labour relations.
41. 1365. A second level, where collective bargaining takes place by branch of activity, the purpose of which is to fix minimum wages by branch or sector of activity, conforms to the traditional type of collective bargaining in the country. The third level of collective bargaining takes place at company level.
42. 1366. As set out in the abovementioned exposition of justification for the Bill: “In this case, legal confirmation is given to a body which has been crucial to the holding of the most recent wages councils, when it achieved almost complete agreement for the formation of activity groups, an agreement subsequently confirmed by decree of the Executive Power” (another example of social dialogue and effective tripartism). According to the Government, the complainants are confusing collective bargaining with labour relations, asserting that the Council would have to take the governing role in collective bargaining in all its dimensions, forgetting that collective bargaining is by definition bipartite, free and voluntary. Anyone who is familiar with the constitutional obligations of the Uruguayan State and the international obligations it has assumed through the signature of numerous treaties in the UN, the OAS and the ILO, must realize that the State often has to intervene and direct aspects of the labour relations system. For years, the Uruguayan State was told that it was not fully in compliance with the international obligations assumed on freedom of association, by not adequately protecting trade union officials and militants through, for example, mechanisms for reinstatement or reincorporation. The obligations assumed in a multiplicity of international instruments require protection of this fundamental human right. In that case, then, (due to the particular national situation), that would require state intervention to promote it, and direction by the State to ensure compliance with these obligations of international origin, because one of the parties, the workers, found itself in a much weakened situation.
43. 1367. In speaking of state interventionism in relation to collective bargaining, the Government is thinking of a limited concept, basically involving fixing of minimum wages. Curiously, the complainants omit any reference to ILO Conventions Nos 26 and 131, also ratified by Uruguay, under which the ILO has repeatedly made observations because consultation mechanisms were not being used to fix minimum wages, and the unionization of rural, public and domestic workers was not being promoted. The State, in the light of the obligations assumed in those Conventions, decided to intervene to promote the system of labour relations. Thus, collective bargaining, for example with regard to minimum wages, ceased to be exclusively free. On this point, the provision of paragraph 1 of Article 4 of Convention No. 131 should be observed. That is, in this area, fixing of minimum wages, an inescapable international obligation is assumed by the Uruguayan State towards the ILO to guarantee increases in citizens’ minimum wages. This is achieved through the system of wages councils, thereby complying with its obligation to intervene in the system of fixing minimum wages and guaranteeing those wages and their increases.
44. 1368. If a collective agreement reached freely fixes minimum wages below the national minimum, the State must intervene in that situation and correct it to comply with international law. The Government indicates that, for 15 years, i.e. from 1990 to 2005, tripartism in the country practically disappeared, trade unions grew weak, some disappeared, and the rate of membership fell below 10 per cent. Also, wages councils were not convened during that period, real wages fell in some cases by up to 50 per cent, social security was under-financed like never before, informal labour stood at levels close to 40 per cent, etc. The fact is that at the time the employers never demanded the tripartism they advocate today.
45. 1369. The Government emphasizes that, at the branch of activity level alone, since the reestablishment of wages councils, over 700 collective agreements have been concluded, the rate of trade union membership has risen from 8 per cent to over 25 per cent, formalization of work has been given an impetus, unemployment has maintained a constant downward path, membership of and contributions to the social security system have vastly increased and, above all, companies have multiplied without losing competitiveness. It is not for nothing that the country did not fall into recession during the recent global financial crisis. In Uruguay, tripartism is manifest. An infinite number of possibilities of this kind have been created. The law seeks to guarantee them and especially modify the process of convening wages councils. Previously, convocation was a matter for the government of the day. Thus, from 1985 to 1990, they functioned. The new Government in 2000 did not convene them and this sphere of tripartism and social dialogue vanished, despite the workers’ constant complaints and demands for reestablishment. The employers said nothing. Neither did the governments which took office in 1995 and 2000 recreate that possibility or apply Act No. 10449. Neither did the employers protest on those occasions. However, the reform that is now enshrined in law, makes convocation by any of the three sectors involved at primary and secondary level compulsory, thus removing the discretionary nature of convocation from here on. In this way, tripartism is endowed with the three essential characteristics of predictability, stability and continuity, and removed from the uncertainty of government policy.
46. 1370. The Government indicates that another of the allegations is the criticism of the Act based on the false dichotomy of dirigisme–interventionism versus free and voluntary negotiation. The Government indicates that this is a false comparison. The State must, on some occasions, intervene in the system of labour relations (bearing in mind that to fail to do so, as did previous governments, is also a form of intervention which can be called inaction) to ensure fulfilment of workers’ fundamental human rights, for example, respect for freedom of association, the right of collective bargaining, moral conscience, private life, right to limits on working time, etc. Many of these rights are grounded in the Constitution of the Republic itself; others in international obligations assumed by the Uruguayan State, for example, with the ILO. Intervention may also fall into a third category; i.e. creating legislation and conditions to foster the promotion of freedom of association, collective bargaining, the right to organize, etc. First, by constitutional mandate and secondly, by taking a decision and adopting a policy which finds in this system healthy, constructive and strong labour relations. One such obligation is to fix minimum wages for workers, with periodic adjustments and as far as possible to allow workers, employers and the State itself to participate on an equal footing.
47. 1371. At the second level of collective bargaining (article 12 and following), it is established that wages councils shall comply with these international obligations, as they are responsible for “fixing the minimum amount of wages and conditions of work of all workers in the private sector ...”. The third level establishes bipartite collective bargaining (article 14 and following), where bargaining is free, voluntary and has the characteristics of collective autonomy. The Government considers that it is therefore tendentious and reflects an erroneous interpretation, aimed at confusing the Committee, to assert that in all cases where a bilateral agreement is not reached (typical collective agreement), wage councils will resort to wage fixing. Bilateral collective bargaining, i.e. classic collective agreements will continue, as they do now, to be free and voluntary, but in the matter of fixing minimum wages, when there is no agreement, when the bargaining in a branch of activity fails or in the absence of a collective bargaining framework, the State will convene the wages councils, which are tripartite bodies, to fix minimum wages and thus comply with Article 4 of ILO Convention No. 131.
48. 1372. The Government indicates that, the comments that the decisions of the Council will not be properly balanced because the Government has more representatives than the professional sectors, shows that they are not familiar with or reject the way in which the major ILO organs function, where delegations do not have the same number of delegates by sector. In general, the State has twice as many as the professional sectors.
49. 1373. As regards the objections to Chapter III, that the convocation to wages councils is in violation of free and voluntary bargaining, the Government states that the Bill, on the one hand, provides for classic collective bargaining, and on the other hand, through the socalled atypical collective bargaining, fulfils the obligation to fix minimum wages, in accordance with Convention No. 131. The proposed wording clearly draws on the abovementioned international instrument, thereby overcoming the observation that has been made against the country by the ILO’s own supervisory bodies (Committee of Experts on the Application of Conventions and Recommendations and the Conference Committee on the Application of Standards of the International Labour Conference) which had repeatedly pointed out that the provisions of the Convention concerned were not being applied, because the public authorities were not consulting the most representative workers’ organizations in the case of establishing, applying and modifying minimum wages.
50. 1374. Furthermore, the collective bargaining that takes place in the wages councils continues to be free and voluntary. Although the State convenes the parties to this sphere of bargaining, it does so in order to fix minimum wages and their modifications. The professional organizations are free not to participate, but if they do not do so, they are the ones who fail to take advantage of or recognize this space for negotiation and consultation. In that case, the State can fix minimum wages without listening to them because they did not attend, or listening to only one of the parties. Attending wages councils does not involve an obligation to agree, as was said in the rounds that took place from 2005 to now, where the percentage of unanimity was over 80 per cent and those agreed by a majority, 13 per cent. In the remaining average of 7 per cent where there was no form of agreement, the State made orders setting the minimum wages, but after having been present throughout the bargaining round, mediating to try and reach agreement. In this way, it fulfilled its obligation to fix minimum wages and create mechanisms for collective bargaining and consultation. The curious thing about the whole of this complaint is that the employers are apparently opposed to the way the system of wages councils operated, yet at local level they demanded vehemently to be involved in them and, when the moment of the bargaining reached an overwhelming majority, they signed collective agreements in those bodies.
51. 1375. As regards the objections to Chapter IV on bipartite collective bargaining, and specifically the objection to the provisions that one of the defects lies in company collective bargaining “... in the absence of a workers’ organization, bargaining authority passes to the most representative higher level organization ...”. The Government explains that it arises because in Uruguay almost all companies are micro-, small or medium-sized enterprises. Trade unions are essentially organized not at company level but by branch of activity. In other words, the workers join this branch union, because there is no union in their company. Thus there are a great many federations, such as the Commercial and Industrial Workers’ Federation of Uruguay (FUECI), the Federation of Beverage Sector Workers (FOEB) and the Uruguayan Health Federation (FUS). That is why, historically, collective bargaining in the country has basically been by branch of activity. It also means that the collective interests of workers in a company who belong to a branch trade union may be represented by that organization.
52. 1376. As regards the other criticism that “administrative checks to test representativeness and consultation are missing”, the Government states that the criteria used are in line with those established by the ILO itself. However, the criticism may be addressed in the regulations which will undoubtedly ensue from the Act. As regards Chapter V on prevention and resolution of disputes, the Government reiterates that articles 21–24 on occupations of workplaces were excluded from the Bill by decision of the President of the Republic, as duly communicated to the employers and announced to the public.
53. 1377. Lastly, the Government states that the complaint is based on assumptions that can be clearly seen as untrue and fallacious. To deny that social dialogue and tripartism exist in Uruguay is to deny reality, or perhaps it is to seek to confuse those who need to understand the situation. For 15 years, wages councils were not convened, with the obvious consequences for workers’ wages, which undoubtedly had an effect on social values. The impoverishment of the workers undermined the social fabric, concentrating wealth in a few sectors, increasing levels of informal work and weakening the unionized social actor.
54. 1378. In its communication of 11 January 2010, the Government indicates that although it had already sent its observations concerning the case, it considered it of crucial importance to explain the reasons why the Government was delayed in formulating its observations. The Committee on Freedom of Association in its 355th Report, relating to the 306th Session held in November 2009, made an urgent call to the Government, as at the time it still had not received the requested information. In this regard and bearing in mind that the Government has always endeavoured to submit a prompt reply to cases raised, it wishes to express with respect to the present case that it relates to a Collective Bargaining Bill submitted to the national Parliament in October 2007, which since then has been the subject of various amendments.
55. 1379. Among these amendments, special mention should be made of the undertaking given by the President of the Republic to withdraw articles 21–24, which refer to occupations of workplaces, from the original Bill; a commitment made to the employers’ sector and the public, in that it was communicated to the national press, and was in turn transmitted by the Ministry of Labour and Social Security to the parliamentary authorities, the employers and the various media. In addition, as regards the parliamentary processing of the Bill, it should be mentioned that it was analysed by the Committee on Labour Legislation in the Chamber of Representatives (item No. 2159 of 2007) and by the Committee of Labour Affairs and Social Security in the Senate (item No. 1591 of 2009), after hearing representations from the Merchant Chamber of Country Products, the CNCS, the CIU, the National Association of Uruguayan Broadcasters (ANDEBU), the Uruguayan Hauliers’ Federation (ITPC), the Association of Private Construction Promoters of Uruguay (APPCU), the Uruguayan Construction Chamber (CCU), the Internal Press Organization (OPI), the Este Construction Industry Chamber (CICE), the Uruguayan Construction League, the Chamber of Tourism, the Navigation Centre, the National Association of Micro- and Small Entrepreneurs (ANMYPE), the Uruguayan Fishing Vessel Owners Chamber (CAPU), the Uruguayan Fishing Industry Chamber (CIPU), the National Mercantile Chamber, as well as the Director of the Institute of Labour Law and Social Security in the Faculty of Law of the University of the Republic, the Inter-Union Plenary of Workers – National Workers’ Convention (PIT–CNT), and the Ministry of Labour and Social Security.
56. 1380. As can be seen from the foregoing, the study, analysis and process of the Collective Bargaining Bill took several months, underwent several amendments, for which reason the Secretariat of State considered it appropriate to await the outcome in order to formulate its reply in this case. To this should be added the fact that in July 2009, there was a change of authorities in the Ministry of Labour and Social Security, both the Minister and ViceMinister. Finally, on 11 September 2009, Act No. 18566 was enacted on Fundamental Principles and Rights of the Collective Bargaining System, and when the Government was preparing to present its observations, it received a note from the ILO in which additional information relating to this complaint was provided, which had to be considered again. The Government reiterates that it has always formulated its observations to the various complaints that it has received as promptly as possible. However, this case has not been typical, in that a series of instances and events arose which prevented us from honouring our obligations with the desired promptness.

C. The Committee’s conclusions

1. 1381. The Committee observes that in this case the complainant organizations allege that, at the instance of the Government, a series of labour laws were passed without consulting or without taking into account the contributions of the employers’ sector and they also object to a Bill (which subsequently became law in Act No. 18566) creating a system of collective bargaining.
   • Absence of consultation in good faith in the adoption of labour legislation
2. 1382. With regard to the allegation that at the instance of the Government, a series of labour laws were passed without open consultations in good faith and without sufficient time for the employers’ sector to express its views and discuss them in depth in order to reach an appropriate compromise (the complainant organizations refer extensively to Decree No. 145 of 2005 which revoked two decrees, one which had been in force for over 40 years, which allowed the Ministry of the Interior to clear company premises which had been occupied by the workers; Act No. 17930 which created the Register of Offending Companies within the ambit of the Inspectorate-General of Labour; Act No. 17940 on Freedom of Association and its regulations in Decree No. 66/06; Act No. 18091 which increased the period of prescription of labour credits; Act No. 18172 of August 2007 on filing of accounts and budget performance reports; Act No. 18099 of December 2007 on intermediation and subcontracting of labour; Decree No. 291/2007 regulating ILO Convention No. 155; Act No. 18251 of January 2008 which establishes rules on labour responsibility in processes of corporate decentralization; and in particular, the Collective Bargaining Act, No. 18566), the Committee notes that the Government declares that: (1) it has pursued a policy of democratizing social dialogue in all possible areas, based on the purest of tripartism; (2) negotiating on a tripartite basis in good faith does not necessary mean reaching unanimity or consensus; (3) if one of the parties to the negotiation uses a systematic strategy of refusing any kind of reform, it means that the rest of the sectors involved can decide the matter by a majority, as the pursuit of social consensus cannot impede, let alone deny, the reforms needed by the country to continue its progress; (4) several political parties of all philosophical persuasions of the Uruguayan social spectrum are represented in the national Parliament where proposed laws are sent for discussion and approval and each professional group is heard there; (5) an example showing that the employers’ sector is heard is the fact that articles 21–24 of the Collective Bargaining Bill were withdrawn by order of the President of the Republic; (6) since the arrival of the new Government in March 2005, authentic tripartism and social dialogue had been established and the employers’ side had always been listened to. Proof of that was that in the case of wages, over 80 per cent of the activities reached collective agreements by unanimity; they are always heard and committees are created in the Ministry of Labour and Social Security and they are received in parliamentary circles; (7) it is not true that the labour laws adopted were not the product of social dialogue; there were hearings in the process prior to the adoption of the laws on freedom of association, subcontracting or outsourcing, special licences, prescription of labour credits and the Bill to create a national system of collective bargaining; (8) with regard to the Collective Bargaining Bill (subsequently Act No. 18566), the employers were invited to participate and began the process and then voluntarily withdrew, and in the parliamentary process, the employers’ organizations, workers’ organizations and representatives of academia were received; and (9) opening a space for social dialogue, tripartism or collective bargaining does not necessarily require an agreement to be concluded.
3. 1383. In this respect, the Committee notes the contradictory statements of the Government and the complainant organizations as to whether or not there was sufficient consultation in good faith with a view to reaching, as far as possible, shared solutions in the framework of the adoption of labour laws. The Committee recalls that the Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113), Paragraph 1, provides that measures appropriate to national conditions should be taken to promote effective consultation and cooperation at the industrial and national levels between public authorities and employers’ and workers’ organizations, and that under the provisions of Paragraph 5 of that Recommendation, such consultation and cooperation should aim, in particular, at ensuring that the competent public authorities seek the views, advice and assistance of employers’ and workers’ organizations in an appropriate manner, in respect of such matters as the preparation and implementation of laws and regulations affecting their interests. The Committee also recalls that on many occasions it has emphasized that “it is important that consultations take place in good faith, confidence and mutual respect, and that the parties have sufficient time to express their views and discuss them in full with a view to reaching a suitable compromise. The Government must also ensure that it attaches the necessary importance to agreements reached between workers’ and employers’ organizations”. [See Digest of the decisions and principles of the Freedom of Association Committee, fifth edition, 2006, para. 1071.] The Committee requests the Government to ensure respect for those principles so that legislation which directly affects the interests of workers’ and employers’ organizations shall be the subject of full and frank consultations and should be the result of shared solutions.
4. 1384. As regards the abovementioned Decree No. 145 of 2005, which, according to the complainants, revoked two decrees, one which had been in force for over 40 years, which allowed the Ministry of the Interior to clear company premises which had been occupied by the workers, the Committee is of the view that the exercise of the right to strike and the occupation of the premises should also respect the right to work of non-strikers and the right of the management to enter its premises. In these circumstances, the Committee requests the Government to ensure respect for these principles in regulatory legislation and in practice.
   • The Collective Bargaining Act, No. 18566
5. 1385. With regard to the impugned Act No. 18566, the Committee, firstly, takes due note that the Government informs that some articles of the Bill, which gave rise to the complaint and had been opposed by the complainant organizations relating to occupation of the workplace during a strike, were not included in the Act which was ultimately passed.
6. 1386. The Committee observes that the complainant organizations allege that: (1) the Act in question provides for Government intervention in collective bargaining by virtue of the creation of the Higher Tripartite Council as the body for the coordination and governance of labour relations (article 7), with a tripartite composition, but with a majority of representatives of the Government (nine Government representatives, six representatives of the most representative employers’ organizations and six of the most representative workers’ organizations); (2) article 10, paragraph (d), provides that the Council’s powers will include considering and pronouncing on questions related to the tripartite and bipartite bargaining levels and paragraph (e) provides that it may study and adopt initiatives to promote consultation, collective bargaining and the development of labour relations; (3) the greater number of delegates of the Executive Power, nominal voting and powers defined in a broad, ambiguous, confused and ill-defined manner, is undoubtedly a case of a body whose objective is intervention and meddling in labour affairs and collective bargaining; (4) article 17 of the Act, which provides for the compulsory extension of the term of a collective agreement until substituted by a new agreement, constitutes interference in free collective bargaining; (5) article 12 relating to the functioning of wages councils is not in conformity with the principles of collective bargaining when it establishes that decisions of these councils only take effect when registered and published by the Executive Power; and (6) this Act provides for intervention and interference by the authorities in violation of Conventions Nos 98 and 154, which gave rise to the observation of the Committee of Experts on the Application of Conventions and Recommendations in its observation on the application by Uruguay of Convention No. 98.
7. 1387. The Committee notes that the Government states that in general: (1) when the administration took office, the labour relations scene was dismal, minimum wages were appalling, collective bargaining hardly existed and freedom of association was suppressed; (2) the legislation contained flagrant contraventions of international Conventions and, for example, rural workers and domestic workers did not have a limited working day nor the right to bargaining in wages councils; (3) the wages councils were not convened after 1990, and there were less than 100 company-only collective agreements which covered less than 10 per cent of the total workforce; (4) between 2002–2004, numerous collective agreements were signed on terms which diminished workers’ rights, and when the new Government took office in 2005, one of its first measures was to establish wages councils; (5) from 1990 to 2005, these bodies had not been convened, despite the fact that the Act which created them was fully in force and the employers’ sector had never lodged a complaint; (6) the wages councils are tripartite bodies whose chief responsibility is to set minimum wages by branch of activity and category, but they also have other powers such as to act as conciliation bodies in the case of collective disputes, fix wage increases for the remaining workers, etc.; (7) as a first step, the Higher Tripartite Council was set up, and then 20 activity groups were organized which in turn established subgroups;( 8) a framework for discussion was established in the public sector, which reached a framework agreement and by consensus a law on collective bargaining for the public sector and a wages council was set up for domestic or homeworkers, which culminated in a collective agreement; and (9) three bargaining rounds took place, over 80 per cent of all collective agreements were reached unanimously, and there was a significant rise in real wages.
8. 1388. More specifically, with regard to the text of the Act, the Committee notes that the Government states that: (1) the bargaining system is structured at three levels (national scope; branch of activity or productive chain; and bipartite collective bargaining at company or group of companies level); (2) at the first level, a governing body is established, with functions of governance of labour relations, called the Higher Tripartite Council, at the second level, bargaining is structured by branch of activity and the bargaining takes place in wages councils, and at the third level, classic collective bargaining takes place (the most prominent feature of which is that it is bipartite); (3) article 15 of the new Act is important in that it establishes that lower bargaining levels may not diminish the minimum provisions adopted at a higher bargaining level, except as agreed in the respective wages council; (4) the right to information set out in article 4 stems from the right to negotiate in good faith and is extensively developed in ILO Recommendation No. 163, and partially reproduces ILO Recommendation No. 161, establishing mechanisms for exchange of information and consultations, and including the obligation of secrecy (the majority of trade unions at branch of activity level do have legal personality, thus if it is sought to take action against them for civil liability, there would be no obstacles from the point of national positive law; (5) the creation of the Higher Tripartite Council did not signify any intervention, but enacts in law a body created by the Executive Power which has functioned on a tripartite basis in wage bargaining rounds since 2005 (the Government refers to the historical evolution of wages councils in the country); (6) the complainants are confusing collective bargaining with labour relations when they assert that the Council would have to take a governing role in collective bargaining in all its dimensions, forgetting that collective bargaining is by definition bipartite, free and voluntary; (7) under article 12, at the second collective bargaining level, wages councils are responsible for fixing the minimum amount of wages and conditions of work for all workers in the private sector and at the third level, collective bargaining is bipartite and free and has all the characteristics of collective autonomy; (8) as regards the alleged imbalance of representatives on the Council, they show that they are not familiar with the way in which the major ILO organs function, where delegations do not have the same number of delegates by sector; (9) the convocation to wages councils fulfils the obligation to fix minimum wages, in accordance with Convention No. 131; (10) the decision that in company collective bargaining, in the absence of a workers’ organization, bargaining authority passes to the most representative higher level organization arises because in Uruguay almost all companies are micro-, small or medium-sized enterprises and trade unions are essentially organized not at company level but by branch of activity; (11) as regards the criticism that administrative checks to test representativeness and consultation are missing, the criteria used are in line with those established by the ILO, but may be the subject of regulations in the future.
9. 1389. The Committee welcomes the Government’s aim of promoting collective bargaining, increased coverage of collective agreements and the number of agreements. With regard to the content of the Act, the Committee formulates the following comments on the articles which may raise problems of conformity with the principles of collective bargaining or which warrant interpretation in accordance with those principles:
   • I. with respect to the exchange of information necessary to allow the normal conduct of the process of collective bargaining and that in the case of confidential information, its communication carries the implicit obligation of secrecy, and breach thereof would give rise to civil liability of those who are in breach (article 4), the Committee considers that all the parties to the negotiation, whether or not they have legal personality, must be liable for any breaches of the right to secrecy of the information which they receive in the framework of collective bargaining. The Committee requests the Government to ensure that this principle is respected;
   • II. as regards the composition of the Higher Tripartite Council (article 8), the Committee considers that an equal number of members could be taken into account for each of the three sectors, and also the appointment of an independent chairperson, preferably nominated by the workers’ and employers’ organizations jointly, who could break the deadlock in the event of a vote. The Committee requests the Government to hold discussions with the social partners on the modification of the law so as to arrive at a negotiated solution to the number of members of the Council;
   • III. with respect to the powers of the Higher Tripartite Council and in particular considering and pronouncing on questions related to the tripartite and bipartite bargaining levels (article 10, paragraph (d)), the Committee has emphasized on many occasions that “the determination of the bargaining level is essentially a matter to be left to the discretion of the parties”. [See Digest of the decisions and principles of the Freedom of Association Committee, fifth edition, 2006, para. 989.] The Committee requests the Government to take the necessary measures including the amendment of existing legislation to ensure that the bargaining level is established by the parties and is not subject to voting in a tripartite body;
   • IV. as regards the possibility of wages councils establishing conditions of work for each case to be agreed by the employers’ and workers’ delegates in the respective wage group (article 12), the Committee recalls, firstly, that under ILO standards, the fixing of minimum wages may be subject to decisions by tripartite bodies. On the other hand, recalling that it is up to the legislative authority to determine the legal minimum standards for conditions of work and that Article 4 of Convention No. 98 seeks to promote bipartite bargaining to fix conditions of work, the Committee hopes that in application of those principles, any collective agreement on fixing of conditions of employment will be the result of an agreement between the parties, as the article in question appears to envisage;
   • V. with respect to the subject of bipartite collective bargaining and, in particular, that in company collective bargaining where there is no workers’ organization, bargaining authority should pass to the representative higher level organization (article 14, last sentence), the Committee observes that the complainant organizations consider that the absence of a trade union does not mean the absence of collective relations in the company. The Committee considers, on the one hand, that bargaining with the most representative higher trade union level organization should only take place if it had a number of members in the company in accordance with the national legislation of each country. The Committee recalls, on the other hand, that the Collective Agreements Recommendation, 1951 (No. 91), gives pre-eminence to workers’ organizations as one of the parties to collective bargaining, and refers to representatives of non-organized workers only in the case of absence of such organizations. In these circumstances, the Committee requests the Government to take the necessary measures to ensure that future legislation takes these principles fully into account;
   • VI. as regards the effects of the collective agreement and, in particular, that the collective agreement by sector of activity concluded by the most representative organizations is of mandatory application to all employers and workers at the respective bargaining level once it has been registered and published by the Executive Power (article 16), the Committee, taking into account the concern expressed by the complainant organizations, requests the Government to ensure that the process of registration and publication of the collective agreement only involves checks on compliance with the legal minima and questions of form, such as, for example, the determination of the parties and the beneficiaries of the agreement with sufficient precision and the duration of the agreement;
   • VII. as regards the duration of collective agreements and, in particular, the maintenance in force of all the clauses of the agreement which has expired until a new agreement replaces it, unless the parties have agreed otherwise (article 17, second paragraph), the Committee recalls that the duration of collective agreements is primarily a matter for the parties involved, but if government action is being considered any legislation should reflect tripartite agreement [see Digest, op.cit., para. 1047]. In these circumstances, taking into account that the complainant organizations have expressed disagreement with the whole idea of automatic continuing effect of collective agreements, the Committee invites the Government to discuss with the social partners on amendments to the legislation in order to find a solution acceptable to both parties.
10. 1390. The Committee requests the Government, in consultation with the most representative workers’ and employers’ organizations, to take measures, including the amendment of the Collective Bargaining Act (No. 18566), to give effect to the conclusions formulated in the foregoing paragraphs in order to ensure full conformity of that Act with the Conventions ratified by Uruguay on collective bargaining. The Committee draws this case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.

Appendix

1. Act No. 18566, Collective Bargaining System
2. Creation
3. The Senate and Chamber of Representatives of the Oriental Republic of Uruguay, meeting in General Assembly,
4. Decree:
5. I. Fundamental principles and rights of
6. the collective bargaining system
7. Article 1 (Principles and rights). The system of collective bargaining is inspired and governed by the principles and rights which are set out in this chapter and other internationally recognized fundamental rights.
8. Article 2 (Right of collective bargaining). In the exercise of their collective autonomy, employers and employers’ organizations, one the one hand, and one or more workers’ organizations, on the other, shall have the right to freely adopt agreements on conditions of work and employment, and to regulate their mutual relations.
9. Article 3 (Promotion and guarantee). The State shall promote and guarantee the free exercise of collective bargaining at all levels. For that purpose, it shall adopt appropriate measures to facilitate and foster bargaining between employers and workers.
10. Article 4 (Duty to bargain in good faith). In any collective bargaining, the parties shall confer on their respective negotiators the necessary mandate to conduct and conclude bargaining, without prejudice to any provision concerning consultation within their respective organizations. In any case, they must provide sufficient justification of the positions that they assume in the bargaining process.
11. The parties must also exchange the necessary information to allow normal conduct of the collective bargaining process. In the case of confidential information, communication thereof carries with it the implicit obligation of secrecy, breach of which shall give rise to the civil liability of those in breach.
12. Article 5 (Collaboration and consultation). Collaboration and consultations between the parties must have the general aim of fostering mutual understanding and good relations between the public authorities and employers’ and workers’ organizations, and between the organizations themselves, in order to develop the economy as a whole or certain of its branches, improve conditions of work and raise standards of living.
13. Such collaboration and consultations shall have the objective, in particular, of:
14. (A) Allowing joint examination, by the employers’ and workers’ organizations, of questions of mutual interest, in order to reach, to the greatest extent possible, mutually agreed solutions.
15. (B) Ensuring that the competent public authorities adequately take into account the opinions, advice and assistance of employers’ and workers’ organizations concerning matters such as:
16. (i) the preparation and application of legislation affecting their interests;
17. (ii) the creation and functional of national bodies, such as those concerned with the organization of employment, vocational training and re-training, worker protection, occupational safety and health, productivity, and social security and well-being;
18. (iii) the preparation and application of economic and social development plans.
19. Article 6 (Training in bargaining). The parties to collective bargaining may adopt measures to ensure that their negotiators, at all levels, have the opportunity to receive appropriate training.
20. At the request of the organizations concerned, the public authorities shall provide assistance with respect to such training to employers’ and workers’ organizations who so request.
21. The content and supervision of these training programmes may be established by the relevant employers’ or workers’ organization concerned.
22. The training to be given shall not preclude the right of employers’ and workers’ organizations to designate their own representatives for the purpose of collective bargaining.
23. II. Higher Tripartite Council
24. Article 7 (Creation of the Higher Tripartite Council). There shall be created the Higher Tripartite Council as the body for the coordination and governance of labour relations, which will decide its own rules of procedure.
25. Article 8 (Composition). The Higher Tripartite Council shall be composed of nine delegates of the Executive Power, six delegates of the most representative employers’ organizations and six delegates of the most representative workers’ organizations, plus an equal number of substitutes or alternates for each party.
26. Article 9 (Functioning). The Higher Tripartite Council may be convened by the Ministry of Labour and Social Security ex officio or mandatorily at the proposal of any of the parties.
27. The holding of sessions shall require the presence of at least 50 per cent of the members, taking into account the tripartite representation of the body. In the event that the said quorum is not reached, there shall be a second convocation within 48 hours for which 50 per cent of the members of the Council shall be required.
28. To adopt a resolution, the Council shall require the vote in due form of an absolute majority of its members.
29. Article 10 (Powers). The powers of the Higher Tripartite Council shall be as follows:
30. (A) To deliberate in advance on the establishment, application and modification of the national minimum wage and that determined for sectors of activity which cannot fix them through collective bargaining. For that purpose, the Executive Power shall submit these matters for consultation by the Council sufficiently in advance.
31. (B) To effect the classification of tripartite bargaining groups by branch of activity of productive chain, designating, as applicable, the bargaining organizations in each sphere.
32. (C) To provide mandatory advice to the Executive Power in the case of administrative appeals against decisions relating to disputes caused by the placement of companies in activity groups for tripartite bargaining.
33. (D) To consider and pronounce on questions related to tripartite and bipartite bargaining levels.
34. (E) To study and adopt initiatives on subjects which it considers pertinent to promote consultation, bargaining and the development of labour relations.
35. III. Collective bargaining by sector of activity
36. Article 11 (Wages councils). Collective bargaining at branch of activity or productive chain level may take place following convocation of the wages councils created by Act No. 10449 of 12 November 1943, or by bipartite collective bargaining.
37. Article 12 (Powers). Article 5 of Act No. 10449 of 12 November 1943 is substituted by the following:
38. Article 5. Creating wages councils which shall have the task of fixing the minimum amount of wages by labour category and revising remuneration of all workers in the private sector, without prejudice to the powers assigned by article 4 of Act No. 17940 of 2 January 2006. The wages councils may also establish conditions of work where they are agreed by the employers’ and workers’ delegates in the respective wages group. The decisions of the wages councils shall take effect in the respective activity group once they have been registered and published by the Executive Power.
39. At any time, the Executive Power may convene the wages councils ex officio or, mandatorily, at the request of the organizations representative of the activity sector concerned, in which case it must convene it within 15 days of submission of the request.
40. It will not be necessary to convene wages councils in those activities or sectors in which there is a collective agreement in force which has been duly agreed by the most representative employers’ and workers’ organizations in the activity or sector.
41. Article 13 (Designation of delegates). Article 6 of Act No. 10449 of 12 November 1943 is substituted by the following:
42. Article 6. The Higher Tripartite Council shall effect the classification by activity groups and for each there shall be a wages council formed of seven members: three designated by the Executive Power, two by the employers and two by the workers, and an equal number of alternates.
43. The first of the three delegates designated by the Executive Power shall act as chairperson.
44. The Executive Power shall designate the workers’ and employer’s delegates in consultation with the most representative organizations of the respective activity groups.
45. In sectors where there is not sufficiently representative organization, the Executive Power shall designate the delegates proposed to it by the organizations which make up the Higher Tripartite Council or, if applicable, shall adopt the electoral mechanisms proposed by it.
46. IV. Bipartite collective bargaining
47. Article 14 (Authorized persons). Persons authorized to bargain and conclude collective agreements are an employer, a group of employers, an employers’ representative organization or organizations, one the one hand, and one or more workers’ representative organizations, on the other. When there is more than one organization which has authority to bargain and there is no agreement between them, authority to bargain shall be attributed to the most representative organization, having regard to age, continuity, independence and number of members of the organization. In company collective bargaining, in the absence of a workers’ organization, bargaining authority shall pass to the most representative higher level organization.
48. Article 15 (Levels and articulation). The parties may bargain by branch or sector of activity, company, establishment or any other level that they consider appropriate. Lower level bargaining may not diminish the minimum provisions adopted at a higher bargaining level, except as agreed in the respective wages council.
49. Article 16 (Effects of the collective agreement). Collective agreements may not be modified by an individual contract of employment or agreements with groups of workers to the prejudice of the workers. The collective agreement by activity sector concluded by the most representative organizations is of mandatory application to all employers and workers at the respective bargaining level, once it has been registered and published by the Executive Power.
50. Article 17 (Duration). The duration of collective agreements shall be established by the parties by mutual agreement, and they may also determine its express or tacit extension and the procedure for denunciation.
51. A collective agreement whose term has expired shall remain fully in force with respect to all its clauses until substituted by a new agreement, except where the parties have agreed otherwise.
52. V. Prevention and settlement of disputes
53. Article 18. The Ministry of Labour and Social Security shall have powers with respect to mediation and conciliation in the case of collective labour disputes.
54. Article 19 (Autonomous proceedings). Employers or their organizations and trade unions may, through collective autonomy, establish mechanisms to prevent and settle disputes, including information and consultation procedures and bargaining, prior conciliation and voluntary arbitration bodies.
55. The Ministry of Labour and Social Security, through the National Directorate of Labour, shall provide advice and technical assistance to the parties, with the aim of fostering and promoting the proceedings mentioned in the foregoing paragraph.
56. Article 20 (Mediation and voluntary conciliation). Employers and their organizations and workers’ organizations may resort, at any time and as they see fit, to mediation or conciliation in the National Directorate of Labour or the wages council with jurisdiction in the activity to which the company belongs (article 20 of Act No. 10449, of 12 November 1943).
57. When the parties opt to submit the dispute to the competent wages council, having received the request with the relevant supporting documents, the latter must immediately be convened in order to try to achieve conciliation between the parties involved.
58. If after the lapse of the prudential period, it is believed, in the opinion of the majority of delegates to the wages council, that it is not possible to reach agreement by conciliation, the National Directorate of Labour will be informed for the pertinent action.
59. VI.
60. Article 21. During the term of collective agreements that they conclude, the parties undertake not to take actions which contradict what has been agreed nor to apply coercive measures of any type on those grounds. This clause applies to all matters included in the bargaining and which have been agreed in the signed agreement. Excluded from its scope is adhesion to measures of a national character called by trade unions. To resolve disputes in the interpretation of the agreement, the same procedures must be established, first seeking to exhaust all instances of direct negotiation between the parties, and then, with the intervention of the competent ministerial authority, seeking to prevent disputes and the actions and effects generated thereby. Failure to comply with provisions of the first sentence of this article, except in the case of a procedure fixed by the parties, may give rise to a declaration of termination of the agreement, which must be made before the labour courts.
61. Chamber of Representatives, Montevideo, 2 September 2009.