Definitive Report - REPORT_NO363, March 2012

1. 1202. The complaint is contained in a June 2011 communication from the Inter-Trade Union Assembly – Workers’ National Convention (PIT–CNT).
2. 1203. The Government sent its observations in communications dated 6 and 13 October 2011.
3. 1204. 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), the Labour Relations (Public Service) Convention, 1978 (No. 151), and the Collective Bargaining Convention, 1981 (No. 154).

A. The complainant’s allegations

1. 1205. In its June 2011 communication, the Inter-Trade Union Assembly – Workers’ National Convention (PIT–CNT) states that the adoption of Act No. 18508 on collective bargaining in the public sector was a major recent milestone given the major effect it is expected to have on the public sector labour relations system. Act No. 18508 genuinely favours workers and makes corresponding demands on the public sector as an employer. Furthermore, it can be argued that the adoption of the Act has led to the recognition of an inherent right to collective bargaining through the reference made in section 1 of the Act to ILO Conventions Nos 87 and 151.
2. 1206. The Act sets forth the content or substance of collective bargaining and sections 8 to 14 of the Act define the structure of the collective bargaining system. The structure comprises three bargaining levels: a first level consisting of a senior negotiating council for the public sector made up of eight representatives of the Government and eight representatives of the trade unions that are most representative of public employees nationwide, and in which efforts will be focused on reaching agreements with the most relevant scope possible; a second level consisting of one bargaining panel for each branch or sector (central government, autonomous bodies or decentralized agencies) and also made up of eight representatives of the Government and eight representatives of the trade unions that are most representative in the sector or branch in question; and a third level comprising a bargaining panel made up of the authorities in each department or body and the grass-roots trade union organizations.
3. 1207. A new Government took office at the beginning of 2010 and a five-year budget was adopted accordingly. An announcement that reform of the State was forthcoming added to the variety of existing complaints, aspirations and demands of trade unions of public employees. As a result, the trade unions of public employees called for collective bargaining at the various levels defined in the Act. Various bargaining sessions were convened and suspended, then eventually held in late July, August and September 2010.
4. 1208. PIT–CNT states that proceedings in those sessions did not even remotely constitute a genuine opportunity for collective bargaining as it is clearly defined in the legislation in force. In those sessions, the public employees’ representatives set out their demands but the response from the representatives of the executive branch was insufficient to generate a dynamic of proposals and counter proposals. Worse still, while the sessions were going nowhere, the executive branch was simultaneously working on its draft five-year budget, which included a large number of regulations governing the working conditions of public employees.
5. 1209. According to PIT–CNT, at each and every one of the sessions, the representatives of the workers asked the representatives of the executive branch for information on the process of drawing up the five-year budget, and for economic data that would enable a debate on wages and the wage-adjustment system. Nothing of the sort happened; the representatives of the executive branch did not respond to the requests for information on which discussion and debate should have been based. The executive branch merely expressed its determination not to renew contracts that were about to expire or to change the amount of the minimum wage on the basis of a predetermined number of working hours, and indicated that it would not provide information on the budget because it had not yet been finalized.
6. 1210. PIT–CNT considers that, in the light of the abovementioned legislative provisions, this attitude of the public sector as an employer constitutes a clear violation of the Act in so far as it has failed to meet its obligation to bargain. The obligation to bargain is not an obligation to agree. The fact that there is no such thing as an obligation to agree cannot be interpreted in such a way that bargaining is deprived of any real substance or content. Collective bargaining requires the strict compliance with various processes that give it real meaning. Some of them are substantive and others are instruments intended to expedite bargaining.
7. 1211. PIT–CNT states that, in practice, bargaining involves engaging in discussions on a number of subjects identified in the Act as being the focus of bargaining. The obligation to bargain in good faith and provide information is key to enabling the parties to interact. Whether or not an agreement is reached, there must be a unity of time and place where there is engagement between the parties, making proposals and counter proposals on the basis of information duly provided enough time in advance for it to be analysed.
8. 1212. PIT–CNT considers that worst of all is the fact that the executive branch violated section 6 on the “right to information”. Section 6 stipulates, inter alia, that the State must provide information on the progress of work on draft budgets, the economic situation of bodies and possible changes in working conditions. In the absence of such information, bargaining is absolutely impossible, because the draft five-year budget contains all of the subjects for discussion specified in section 4 of the Act, namely, working conditions, career structures, and management reform, among others. All of these subjects were comprehensively covered in the draft budget but not negotiated for the simple reason that, during bargaining, the executive branch never shared the draft with the other party, the Confederation of Civil Service Trade Unions (COFE), before transmitting it to the legislative branch, even though the workers had persistently sought to have it shared with them. On 31 August 2010, the executive branch transmitted the draft national budget to the legislative branch. COFE became aware of the content of the draft budget when the executive branch published it on its website.
9. 1213. According to PIT–CNT, the seriousness of this situation is made even clearer by the content of the draft budget. The Government unilaterally defined all of the conditions. For example, it defined criteria for raising and adjusting wages; rules for the handling of public employees’ personal data by both Human Resources and the National Civil Service Office; criteria for the redeployment of public employees; criteria for determining employees’ leave entitlements; staff budgeting processes and criteria; and criteria for converting budgeted staff posts. It defined which posts are considered to be reserved for particularly trusted employees; established criteria for the payment of certain types of financial compensation (such as allowances for cash shortages); defined criteria for setting wage ceilings; changed the licensing system for employees; defined the procedure to be followed when employees are sick or physically unfit for work; defined criteria for admittance to the civil service; defined promotion criteria and procedures; defined the contractual modalities under which the State hires employees, namely contracts for work, artists’ contracts, temporary contracts under public law, employment contracts; and defined other categories of recruited employees, namely interns and trainees.
10. 1214. These are among the subjects covered in the “employees” chapter in part one of the draft budget. A large number of other provisions that also concern working conditions are also found in the chapters on each of the paragraphs in the budget, namely the ministries and the various agencies. PIT–CNT considers that these subjects cover the full range of working conditions, including salaries, of state employees. None of them was agreed or negotiated with COFE. On the contrary, they were drawn up and defined unilaterally by the executive branch, outside the scope of collective bargaining.
11. 1215. PIT–CNT adds that a similarly serious violation of the law occurred when the executive branch promulgated Decree No. 319/2010 on the reorganization of office hours and staff working hours in the central Government. The authorities summoned COFE to a bargaining session in the presence of the National Labour Director himself and presented the draft decree. COFE expressed its acute concerns about the fact that the Decree enabled sanctions of up to 180 days to be applied with no investigation being required, and was thus a regression with respect to due process and the system of guarantees, and further stated that the change in office hours increased the working hours of professional and technical staff without a corresponding increase in their wages and might therefore violate constitutional principles on the protection of wages. The executive branch stated that it would examine COFE’s observations then convene another meeting to deliver its response. According to PIT–CNT, absolutely nothing of the sort ever happened. The only communication received was intended to inform COFE that the Decree was going to be promulgated in the form in which it had been proposed.
12. 1216. PIT–CNT states that all of these facts constitute a violation of the spirit, logic and letter of Act No. 18508 and ILO Conventions Nos 98, 151 and 154. The Government failed to meet its obligation to bargain. It cannot even be said that it complied with the requirement to consult or inform, namely the minimum form of worker participation.

B. The Government’s reply

1. 1217. In its communications dated 6 and 13 October 2011, the Government states that it regretfully cannot agree with the point of view expressed by the state workers’ organization, whose version of events is not consistent with the facts. Indeed, the Government considers that various passages of the complaint confirm that there have been numerous opportunities to meet and reach agreements. The Government states that before the current phase of public sector collective bargaining was initiated, various social actors referred to the need to provide a regulatory framework for bargaining in this kind of activity, since a framework would create greater certainty and promote bargaining. As a result, and pursuant to Convention No. 151, the executive branch issued Decree No. 104/005 on 7 March 2005 to invite public employees’ organizations to join a bipartite bargaining panel with a view to establishing a regulatory framework for collective bargaining in the public sector. Decree No. 113/005 of 15 March 2005 subsequently defined the criteria for the membership and operations of the various working groups, of which there were supposed to be three. Finally, a framework agreement on collective bargaining in the public sector was signed on 22 July 2005. The agreement formalized the context for the negotiation of labour relations with employees, and the State established a senior negotiating council for the public sector for the purpose of conducting high-level collective bargaining. Given the need for legislation on collective bargaining in the public sector, it was decided to draft a bill on collective bargaining in the state sector and define the criteria for implementing that legislation without infringing the freedom of action and powers of the State or the full exercise of trade union rights.
2. 1218. The agreement was the immediate precedent for Act No. 18508 of 26 June 2009 on the regulation of collective bargaining in the public sector. This Act, together with Act No. 18566 on collective bargaining in the private sector and Act No. 17940 on freedom of association, was a genuine novelty in national collective law, which was traditionally considered abstentionist and unregulated, and is part of the protective or rights-based model implemented in Uruguay from 2005 onwards. From March 2005 until the adoption of Act No. 18508, some 60 agreements were signed, ranging from branch framework agreements and wage agreements to specific agreements in a number of bodies.
3. 1219. Regarding the new collective bargaining system (Act No. 18508), the Government states that the system in place is governed by the principles set forth in Chapter I (participation, consultation and collaboration, right to collective bargaining, obligation to bargain in good faith, right to information and training in bargaining) of the abovementioned Act, and by internationally recognized labour rights (articles 57, 65, 72 and 332 of the Constitution). Collective bargaining in the public sector takes place in two main areas, namely a first area where there is collective bargaining in the executive branch, autonomous bodies and decentralized agencies carrying out the industrial and commercial activities of the State. The first area comprises three levels: (a) the general or highest level – the senior negotiating council for the public sector; (b) the sectoral or branch level – bargaining involving autonomous bodies or organized by particular sectors; and (c) the level of each department or body – bargaining sessions involving trade union organizations representing the grass roots and the bodies in question.
4. 1220. The second area comprises collective bargaining in the legislative branch, the judiciary, the administrative court, the electoral court, the court of auditors, autonomous bodies of the public school system and departmental governments. Bargaining in this area takes place in bargaining sessions within the framework of the parameters recognized by the Constitution of the Republic.
5. 1221. The Government states that, before dealing with the substance of the complaint, it considers itself duty-bound to make a few points of a conceptual nature. Indeed, although the complaint is presented by the PIT–CNT central workers’ organization and its state and municipal employees department, the subject of the complaint almost exclusively concerns employees of the central Government (executive branch employees working in the various ministries) and certain non-commercial decentralized agencies such as the Uruguayan Institute for Children and Adolescents (INAU). These workers are members of COFE and they are the ones affected by the contested budgetary standards. The same applies with regard to Decree No. 319/2010. In other words, the complaint in fact relates to a category of public sector workers and not to public sector workers in their entirety.
6. 1222. Consequently, the following considerations are applicable only to that bargaining unit. In any event, the Government provides information on various public sector negotiations involving other state employees such as employees of public enterprises, teaching institutions, other state bodies, audit agencies and departmental governments. Reference is also made to bargaining in various first-level departments or bodies.
7. 1223. As regards budgetary standards, the Government states that the special constitutional conditions surrounding the adoption of the National Budget Act are such that a special observation is required for the underlying problem and for the inappropriateness of the complaint to be fully understood. The national budget requires formal approval in the form of an act debated and adopted, obviously, by the national Parliament. Therefore, the national budget needs to be approved, not by the executive branch but, to the best of their ability, by legislators. This is no minor point and it is one of the special conditions affecting collective bargaining in the public sector. Adoption of the National Budget Act is not the same as that of routine legislation since the procedure to be followed is expressly and clearly defined in the Constitution of the Republic. Indeed, by way of example, initiating the budget is the prerogative of the executive branch and the time limits for its adoption are strict.
8. 1224. One thing that is abundantly clear is that the content of the National Budget Act is not confined to the bill sent by the executive branch. Numerous amendments, deletions and additions are made during the parliamentary adoption process as a result of countless negotiations forming part of a dynamic political process with constant exchanges between legislators and the executive branch as well as various social organizations.
9. 1225. The Government adds that, upon closer inspection, various passages of the complaint explicitly confirm that there have been numerous opportunities for collective bargaining in the public sector. For example, it is acknowledged that a number of public sector bargaining sessions were organized; the executive branch made proposals on the amount of the minimum wage for employees; and reference is made to COFE being summoned to discuss draft Decree No. 319/2010. Therefore, according to the Government, such a negative and critical appraisal of the Government’s behaviour is not justified when the complaint itself highlights the large number of meetings and bargaining opportunities.
10. 1226. The Government adds that the first meeting of the senior negotiating council for the public sector took place on 8 June 2010, meaning that it is not true that the general sessions under Act No. 18508 did not take place until late July, as the complainant erroneously claims. On that occasion, the Government, acting mainly through the Ministry of Economic Affairs and Finance, explained the broad lines of the incipient draft bill. Meetings were then held during July 2010. The Government provided the workers with a draft document on “strategies and instruments for strengthening state institutions”, previously discussed in the Council of Ministers. The document contained a range of proposals such as a streamlining of labour relations with the State, and the adoption of minimum working hours for employees. The workers, meanwhile, set out their demands and produced a written document with observations on the Government’s document.
11. 1227. Following a series of meetings and numerous exchanges, a decision was taken to open bargaining in the various “activity branches”, namely the central Government, public enterprises, teaching institutions and the like. Discussions in the central Government and non-commercial bodies thus began in July 2010. On 6 August 2010, COFE made its wage proposal in a note presented to representatives of the executive branch. It requested a minimum wage for public employees of 14,427 Uruguayan pesos (UYU). In subsequent meetings, the Government stated that it was considering the introduction of a minimum wage equal to the amount paid for 40 hours of work per week for central Government workers. As can be seen, the proposal conveniently put forward by the workers and referred to above was used as the starting point and reflected in section 754 of the National Budget Act (No. 18719 of 27 December 2010) which set the abovementioned minimum wage.
12. 1228. The Government states that bargaining continued until just before the draft budget was transmitted, at a time when an agreement was about to be signed on adjustments and departures on grounds of presenteeism. There was also bargaining during the parliamentary debate on the Act. The bargaining was not fruitless to the extent that a collective agreement covering the Government’s entire term was eventually signed. Regarding the definition of contract types, the aim was to simplify labour relations as previously proposed by the Government. In any event, the clear purpose of the legislation is to create greater stability and order in the hiring of public employees.
13. 1229. The Government states that the obligation to bargain is not an obligation to agree. This is acknowledged by the workers and explicitly set forth in the last paragraph in section 4 of Act No. 18508. As previously mentioned, solutions were reached jointly in some areas but not in others, as in all bargaining processes. The National Budget Act was eventually adopted as Act No. 18719 on 27 October 2010. The Act includes explicit references to collective bargaining in the public sector.
14. 1230. The Government states that bargaining sessions involving workers and the national Government were held at the time the National Budget Act was adopted and subsequently, a collective agreement with COFE was reached, and the accusations made in the present complaint are thus without foundation. A modern approach to labour relations sees them as a dynamic process, as reflected in the events of 2010 and 2011. Moreover, considering that the Government’s term has only just begun, there is ample scope for dialogue with workers. Indeed, as of December 2010, the bargaining committee of the central Government attended a variety of meetings to discuss the new wage agreement and debate the new Institutional Strengthening Programme. The broad lines of the Programme were presented by the executive branch in a meeting on 8 December 2010 and include, inter alia: (1) organization design; (2) the new public service; and (3) the modernization of structures and processes. It was agreed in the meeting that once the broad outlines of the new public service had been defined, it would be submitted to a bargaining session.
15. 1231. There were further meetings on 20, 23, 27, 29 and 30 December 2010 specifically devoted to negotiating the new wage agreement. After the meetings held at the headquarters of the Ministry of Labour and Social Security and the Ministry of Economic Affairs and Finance, the wage agreement was signed on 30 December 2010. The five-year agreement sets the guidelines to be followed by the central Government in the wage-adjustment process and establishes the procedures and mechanisms guiding wage discussions between the parties. In addition to setting general wage adjustments, the agreement provides for selective salary adjustments to allow advancement within each grade of the salary scale established within the framework of the central Government’s new occupational and salary system. According to the agreement, a working group will be set up on 1 and 31 May every year to consider individual cases and determine the abovementioned adjustments. The working group is to be tasked with assessing the feasibility of formalizing the incentive set forth in section 754 of the 2010–14 National Budget Act while taking into account the constraints specified in the Act.
16. 1232. After the agreement had been signed, the trade union requested a meeting to deal, inter alia, with the regulatory decree relating to the minimum wage in the central Government. Before the meeting, the executive branch asked the trade union to send a list of amounts that, in its opinion, should not be included in the calculation of a minimum wage. Meetings were then held on 25 February and 4 March, in which the trade union raised a number of points concerning the implementation of the new contracts provided for in the National Budget Act, and consultations were organized to consider the possibility of excluding other amounts specified in the list for the implementation of a minimum wage. The executive branch took into account the points made by the trade union, including most of the amounts identified by the trade union as being suitable for exclusion from the calculation of the minimum wage. Lastly, a fresh meeting with COFE was held on 15 May 2011.
17. 1233. The Government states that there have been numerous bargaining opportunities at all bargaining levels in the public sector. This is evidence of compliance with the duty to participate, consult and collaborate, as set forth in section 2 of Act No. 18508. All of the events organized were genuine opportunities to bargain in which representatives of each sector (workers and government) took part, making proposals and counter proposals that led to agreements being concluded in the vast majority of cases. The number of meetings held and the agreements concluded reflect the executive branch’s interest and willingness to engage in collective bargaining with respect to all issues arising from working conditions in the public sector, and to refrain from imposing unilateral solutions, contrary to the complainant’s allegations. There is no doubt that the obligation to engage in dialogue and exchange information has been met, in accordance with the provisions of section 3 of Act No. 18508. The State has at all times promoted and guaranteed this right by addressing the requests to bargain by public sector workers for the purpose not only of dealing with issues arising from working conditions but also of resolving conflict situations, thereby ensuring the comprehensive implementation of the existing legislation.
18. 1234. Regarding Decree No. 319/2010, the Government states that the draft decree was presented to the trade unions in the form of a document that included regulations on the minimum hours of presence of employees who did not do six hours of work per day at the time the legislation was adopted. Some months earlier, the Government had already brought this issue to the attention of the trade unions, who considered that the Government had merely compiled a new document containing provisions that were already in force, and had not made any substantial innovations. The Government states that the complainant acknowledges that the legislation was submitted for consideration before being adopted. Close analysis of the Decree shows that the provision actually reordered a range of existing legislation that concerned the relevant aspects of labour relations but was scattered across older Acts and decrees. The new legislation did not introduce any substantial novelties. The sanctions mentioned in the legislation refer only to unjustified absences by employees. Furthermore, the claim that the legislation is not rights-based is not true. Indeed, according to section 18 of the abovementioned Decree, once an instance of misconduct has been recorded, the employee is given the opportunity to make comments, and following due consideration of the comments and the employee’s track record, a sanction may be adopted. There are administrative opportunities to appeal against the sanction, which can be struck down by the administrative court. Lastly, the Government states that state employees instituted amparo (protection of constitutional rights) proceedings against the executive branch’s Decree, and the subsequent rulings went against the workers in both the court of first instance and the court of second instance.

C. The Committee’s conclusions

1. 1235. The Committee observes that, in this case, the complainant organization alleges that even though the adoption of Act No. 18508 on collective bargaining in the public sector was a major milestone in the public sector labour relations system, the executive branch sent a draft budget to the legislative branch in 2010 without having presented the draft, bargained or reached an agreement on state employees’ working conditions with COFE, and without having reported on changes in the status of the draft five-year budget; according to the allegations, the draft was sent to the legislative branch before being presented to the abovementioned organization (the complainant does, however, acknowledge that there were some invitations and that a number of meetings took place with representatives of the executive branch). The complainant organization further alleges that the executive branch promulgated Decree No. 319/2010 on the reorganization of the working hours of staff in the central Government, and the authorization of sanctions with no prior investigation being required, without taking into account the observations made by COFE in that regard.
2. 1236. Regarding the allegations according to which the executive branch sent a draft budget to the legislative branch in 2010, without having bargained or reached an agreement on state employees’ working conditions with COFE, and without having reported on changes in the status of the draft five-year budget – according to the allegations, the draft was sent to the legislative branch before being presented to the abovementioned organization – the Committee notes that the Government states, first of all, that: (1) the complaint almost exclusively concerns employees of the central Government (executive branch employees working in the various ministries) and certain non-commercial decentralized agencies; (2) those employees are members of COFE and they are the ones affected by the contested budgetary standards; and (3) this means that the complaint in fact relates to a category of public sector workers and not to public sector workers in their entirety (the Government has provided information on public sector bargaining with other groups of state employees such as those in public enterprises, teaching institutions and the like).
3. 1237. Specifically, as far as the allegations are concerned, the Committee takes note that the Government states that: (1) the national budget requires formal approval in the form of an Act passed by the national Parliament – this is no minor point and it is one of the special conditions affecting collective bargaining in the public sector; (2) adoption of the national budget is not the same as that of routine legislation since the procedure to be followed is expressly defined as being different in the Constitution of the Republic: by way of example, initiating the budget is the prerogative of the executive branch and the time limits for its adoption are strict; (3) the entire content of the Budget Act is not confined to the bill sent by the executive branch, and numerous amendments, deletions and additions are made during the parliamentary process; (4) the complainant acknowledges that a number of public sector bargaining sessions did take place; (5) the first meeting of the senior negotiating council for the public sector took place on 8 June 2010, and on that occasion, the Government, acting mainly through the Ministry of Economic Affairs and Finance, explained the broad lines of the incipient draft bill; (6) meetings were then held during July 2010, the Government provided the workers with a draft document on “strategies and instruments for strengthening state institutions”, the document contained a range of proposals such as a streamlining of labour relations with the State, and the adoption of minimum working hours for employees; (7) the workers, meanwhile, set out their demands and produced a written document with observations on the Government’s document; (8) following a series of meetings and numerous exchanges, a decision was taken to open bargaining in the various “activity branches”, namely the central Government, public enterprises, teaching institutions and the like, and discussions in the central Government and non-commercial bodies thus began in July 2010; (9) on 6 August 2010, COFE made its wage proposal in a note presented to representatives of the executive branch, and requested a minimum wage for public employees of UYU14,427 (the Government proposed the same minimum wage, which was recorded in what became section 754 of National Budget Act No. 18719 of 27 December 2010); (10) bargaining continued until just before the draft budget was transmitted; (11) regarding the definition of contract types, the aim was to simplify labour relations as previously proposed by the Government; (12) as acknowledged by the workers, the obligation to bargain is not an obligation to agree, but solutions were reached jointly in some areas but not in others, as in all bargaining processes; and (13) there have been numerous bargaining opportunities at all bargaining levels in the public sector and all of the events organized were genuine opportunities to bargain in which representatives of each sector (workers and government) took part, information was exchanged and proposals and counter proposals were made that led to agreements being concluded in the vast majority of cases.
4. 1238. In this regard, while the Committee observes that the accounts given by the complainant and the Government are contradictory when it comes to the exchange of information during the bargaining process concerning the draft budget (the complainant alleges that information was very limited and that as a result it did not become aware of the draft budget until it was transmitted to the legislative branch, whereas the Government argues that information was shared as and when the situation changed and that the trade union organizations produced their own set of demands), the Committee takes note that the Government points out that there were bargaining opportunities with COFE before and after the adoption of the National Budget Act, including agreements between the parties on wages, and a number of later meetings with COFE dealt with other issues. Given the above, the Committee cannot conclude that there was no genuine bargaining, although it does consider that, in future, parties to bargaining should be informed of the regulations provided for in the draft five-year budget affecting the interests of the social partners.
5. 1239. Regarding the allegations that Decree No. 319/2010 was promulgated without taking COFE’s observations into consideration, the Committee notes that the Government states that: (1) the draft decree was presented to the trade unions in the form of a document that included regulations on the minimum hours of presence of employees who did not do six hours of work per day at the time the legislation was adopted; (2) some months earlier, the Government had already brought this issue to the attention of the trade unions, who considered that the Government had merely compiled a new document containing provisions that were already in force, and had not made any substantial innovations; (3) the complainant acknowledges that the legislation was brought to its attention before being adopted; (4) the Decree actually reordered a range of existing rules that concerned the relevant aspects of labour relations but was scattered across older Acts and decrees; (5) the sanctions provided refer only to unjustified absences by employees (the decision can be challenged by means of an administrative appeal and can be struck down by the administrative court); and (6) state employees instituted amparo proceedings against the Decree, and the subsequent rulings went against the workers in both the court of first instance and the court of second instance. In the light of this information and the ruling in question, the Committee will not pursue its examination of these allegations.