Report in which the committee requests to be kept informed of development - REPORT_NO374, March 2015

1. 802. The complaint is contained in a communication from the General Confederation of Workers of Peru (CGTP) and the Trade Union of Miners of Shougang Hierro Peru and Others (SOMSHYA) dated 20 November 2013.
2. 803. The Government sent its observations in a communication dated 14 April 2014.
3. 804. Peru 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 complainants’ allegations

1. 805. In its communication dated 20 November 2013, the CGTP and SOMSHYA explain that in terms of the company’s workforce, SOMSHYA is the most representative trade union (the company has a total of 1,260 workers, of which 933 are trade union members of SOMSHYA, which represents 74 per cent of workers).
2. 806. However, the complainants state that the company has been carrying out a series of acts intended to affect the functioning of the trade union, in line with the findings of the Administrative Labour Authority in Report No. 67-2013 of 14 June 2013. These include, in particular, acts of interference in the establishment and functioning of the minority trade union, the “Trade Union for the Integration of Workers of Shougang Hierro Peru SAA”, by granting its members favours and advantages, such as only offering and granting housing to them or scheduling them for overtime hours. These acts of interference are contained in the Report of 30 April 2013, Inspection Order No. 083-2013-MTPE/2/16, of the Administrative Labour Authority. Furthermore, the company has also been manipulating the functioning of the minority trade union by making the recruitment of new workers contingent upon becoming members of that union. In addition, the company signed a collective agreement with this trade union on 1 June 2013.
3. 807. In contrast, the 2013–14 bargaining demands submitted by the most representative, majority trade union have not, to date, been dealt with; it is the company’s aim to make bargaining contingent upon the content of the collective agreement of the minority trade union.
4. 808. The complainants highlight that the Collective Labour Relations Act (hereafter the Act) the single consolidated version of which was approved by Supreme Decree No. 001-2003-TR, stipulates that the majority trade union is to represent the workers for the purposes of negotiating collective agreements in the relevant field, applicable to all workers whether they are trade union members or not, including workers who are members of the minority trade union. Therefore, if negotiations are permitted with the minority trade union, its members would receive benefits in addition to the benefits of the majority trade union, thus harming the majority trade union with the aim of undermining it and causing members to leave the union.
5. 809. The complainants state that they are not calling into question the trade union status bestowed on the minority trade union, nor by any means its capacity legitimately to represent the interests of its members, but rather the fact that this union organization does not have the bargaining capacity since it operates in the same field as a more representative trade union. In this regard, the complainants state that article 9, paragraph 1 of the single consolidated text of the Act establishes “in matters of collective bargaining, the trade union with the absolute majority of members amongst workers in its field assumes the representation of all these workers, even if they are not members of the trade union”. Article 47 of the Act establishes: “(a) the relevant trade union or, in its absence, the expressly elected representatives by an absolute majority of workers are entitled to negotiate collectively on behalf of the workers …”. Article 34 of the Regulations under the Collective Labour Relations Act establishes:
   • … in accordance with the provisions of articles 9 and 47 of the Act, in matters of collective bargaining, representation of all workers in a given field, with the exception of management and employees in positions of trust, shall be carried out by the trade union whose members constitute an absolute majority of the total number of workers in the relevant field. To this end, ‘field’ is understood to mean the various levels of an undertaking or a category, section or branch thereof; and the various levels of activity, trade union and sector as referred to in article 5 of the Act. Where no trade union in the same field has an absolute majority of workers therein, it shall represent only its members …
6. 810. The complainant organizations state that Violation Report No. 67-2013, resulting from Labour Inspection Order No. 00000101-2013-MTPE/2/16, reports a series of acts contrary to the exercise of the right to freedom of association, which include, based on the statement of the minority trade union leader, blatant unlawful acts of interference in the establishment of the said trade union with the intention of affecting the majority trade union most representative by making the renewal of the contracts of minority trade union members easier, scheduling them to work overtime shifts, giving them economic benefits and providing housing.
7. 811. It is worth noting that, in the context of the inspections arising from Inspection Order No. 00000101-2013-MTPE/2/16, the order issued to Shougang Hierro Peru SAA of 11 June 2013 stated:
   • First: the abovementioned company must take the necessary steps to ensure compliance with the provisions in force regarding freedom of association, which is understood, without prejudice to the scope of the violation report, to mean that the company must refrain from acting in such a way as to violate the freedom of association of the trade union leaders and members of the Trade Union for Workers of Shougang Hierro Peru SAA and the Trade Union of Miners of Shougang Hierro Peru and Others, as such acts interfere with matters that are within the individual and collective preserve of members, by promoting the establishment of trade union organizations and favouring the members thereof by offering them better working conditions and guaranteeing the conclusion and renewal of work contracts.

B. The Government’s reply

1. 812. In a communication of 14 April 2014, the Government provides a copy of the comments and information from the company Shougang Hierro Peru SAA concerning the complaint submitted by the CGTP and SOMSHYA.
2. 813. The company states that it respects the right to freedom of association as recognized under article 28 of the Constitution of Peru, whereby the fundamental principle of freedom of association guarantees that all workers should enjoy adequate protection against acts of anti-union discrimination in respect of their employment, such as dismissal, demotion, transfer or other prejudicial measures.
3. 814. With regard to Violation Report No. 67-2013 of 14 June 2013 mentioned by the complainant trade union which suggests imposing a fine of 40,700 nuevos soles (PEN) for the violation of trade union rights, anti-union discrimination and the infringement of collective bargaining rights, the company states that it has submitted the relevant evidence for its defence, in relation to which administrative proceedings are currently under way.
4. 815. This process is provided for in the General Labour Inspection Act (No. 28806). Article 45(c) stipulates that once the violation report has been issued, the relevant party has 15 working days to submit the evidence for its defence which it considers relevant. It is “the administrative labour authority that assesses the case in the proceedings imposing sanctions, including the evidence put forward by the party being inspected in order to establish whether the latter actually infringed social and labour laws”, and, where this is the case, it imposes the appropriate fine in accordance with the law. The company states that it denies the allegations made by the complainant trade union, maintaining that it does not interfere, and never has, with the establishment of any trade union, and much less threatened workers, forcing them to withdraw from their trade union organization under duress. The defendant states that the creation, establishment or formation of a trade union, whichever it may be, fall outside its sphere of competence, interference or participation, since it obtains the relevant status from the competent administrative labour authority by entry in the register. Therefore, it respects the decision of workers to form the trade unions which they believe to be relevant, especially with regard to minority trade unions which have received trade union status from the labour authority, particularly bearing in mind that Peruvian labour legislation covers the establishment of trade unions. The company indicates that it has respected the workers’ rights.
5. 816. With regard to the alleged acts of favouritism, the company states that it did not persuade workers to leave their trade union in exchange for economic benefits and housing, especially bearing in mind that article 3 of the single consolidated text of the Act establishes that “membership is free and voluntary. The employment of a worker cannot be made conditional upon membership, lack of membership or resignation from membership, a worker cannot be obliged to join a trade union nor can he be stopped from doing so”. Moreover, paragraph 4 of point 7 under the heading “verified facts” in Violation Report No. 67-2013 states “… the statements are only indicia or pieces of evidence and do not constitute conclusive proof”. Membership is granted to workers by the trade union, and not the company.
6. 817. With regard to the conclusion of the collective agreement with a minority trade union, the Government reports that contrary to the complainants’ claims, it is perfectly legal to conclude agreements with minority trade unions.
7. 818. Article 9, paragraph 1, of the Act, referred to by the complainants to support their argument, only establishes that, in terms of collective bargaining, the majority trade union undertakes the representation of the entire workforce, regardless of whether workers are members of the trade union organization. This is the only prerogative recognized under the Peruvian legal system as a preferential right of the majority trade union, since the scope of the rights cannot be extended beyond that which is expressly provided for. This means that the regulation in question may not be relied on to attempt to strengthen so-called exclusive bargaining, which certainly is not what is provided for or even suggested in that legal provision.
8. 819. Therefore, at the same time as strictly complying with the mandate provided for in article 9, paragraph 1 by undertaking collective bargaining with the majority trade union and implementing the agreements adopted with that trade union for the benefit of all the workers in that field, there is nothing to prevent the employer – if it sees fit – from establishing, on a voluntary basis, agreements with minority trade unions, which will have a limited effect since they only affect the members of that trade union.
9. 820. The company states that it is fundamental to bear in mind that freedom of association also involves respecting the principle of free and voluntary membership and refraining from any act that obstructs or hinders the establishment or activities of minority trade union organizations. Such obligations – applicable both to the employer and other trade union organizations – derive from the provisions of article 3 of the Act, which states that “membership is free and voluntary. The employment of a worker cannot be made conditional upon membership, lack of membership or resignation from membership, a worker cannot be obliged to join a trade union nor can he be stopped from doing so”.
10. 821. According to the complainants, when agreements are concluded with the minority trade union, additional benefits are granted to its members, thereby unjustifiably differentiating between workers in the same field and category. In this regard, the Government indicates that the benefits obtained by the minority trade union are the result of a different bargaining process than that with the majority trade union; each bargaining process is based on a set of factors that are not comparable such as: different bargaining committees, different closing dates, different stages or circumstances in which the agreement is concluded, a different overall duration of the bargaining process, etc. This situation constitutes a reasonable and objective criterion which justifies an eventual differentiation between the benefits obtained by the workers who are members of one union or another, and which can, therefore, hardly be deemed to be discrimination in the light of constitutional jurisprudence.
11. 822. The Constitutional Court, in its ruling handed down in a different case (No. 02974-2010-PA/TC of 24 October 2011), clarified that:
    • … not all inequality is necessarily discrimination, since not all types of differential treatment in the exercise of fundamental rights are banned; equality will only be infringed where unequal treatment cannot be objectively and reasonably justified (Álvarez Conde, E. curso de Derecho Constitucional [course of Constitutional Law], Volume I., Madrid, Tecnos, 4th edition, 2003, pp. 324–325). The application, therefore, of the principle of equality does not exclude unequal treatment and that principle is not infringed when different treatment is established, provided that it is based on objective and reasonable grounds. These clarifications must go hand in hand with a proper understanding of the difference between two constitutional law concepts, namely differentiation and discrimination. It must be noted that, in principle, differentiation is permitted under the Constitution, since not all unequal treatment is discriminatory. In other words, differentiation is where unequal treatment is based on objective and reasonable grounds …
12. 823. However, despite being members of different trade unions, it must be pointed out that in the present case, the benefits granted to the minority trade union for the period 2013–14 under the agreement concluded on 1 June 2013 are in fact lower than those obtained for the same period by the majority trade union (Regional Directorate Decision No. 016/017-2013-GORE-ICA-DRTPE). This situation actually required benefits to be brought into line with each other so that workers of the minority trade union could access the greater benefits obtained by the majority trade union for the workforce.
13. 824. The complainants allege that the agreement concluded between Shougang Hierro Peru SAA and the minority trade union is an attempt to breach the erga omnes principle solely to undermine SOMSHYA by introducing unlawful differences between workers. Nevertheless, none of the adverse and/or unlawful effects alleged by the complainants have occurred since Shougang Hierro Peru SAA states that: (a) it has not breached the principle of erga omnes as it extended to all the workers that fall within that category of work benefits obtained by the majority trade union in the collective bargaining agreement for 2013–14, strictly in line with article 9, paragraph 1 of the Act; and (b) it has not in any way, differentiated between workers; it has aligned benefits in such a way as to allow workers of the minority trade union to access the greater benefits obtained by the majority trade union.
14. 825. In light of the above, the Government requests the Committee to declare the case closed.

C. The Committee’s conclusions

1. 826. The Committee observes that the allegations made by the CGTP and SOMSHYA refer to the following: (1) acts of favouritism by Shougang Hierro Peru SAA towards the members of a minority trade union involving, for example, loans, housing and overtime (to the detriment of SOMSHYA, the complainant organization); (2) the company has made the recruitment of new workers contingent upon them becoming members of the minority trade union; (3) the conclusion of a collective agreement with the minority trade union (a fact which has also been noted by the labour inspectorate in March 2013) despite the fact that legislation establishes the principle of erga omnes (that is, applying the collective agreement reached with the majority trade union to the entire workforce, regardless of whether they are trade union members). According to the allegations, the above was intended to undermine the majority trade union (the complainant organization) and cause workers to leave their trade union. The complainants state, however, that they are not calling into question the legal status bestowed on the minority trade union, but rather its bargaining capacity within an erga omnes system, such as that of Peru. The complainant organizations underline that the labour inspectorate suggested imposing a large fine on the company for infringement of trade union rights.
2. 827. The Committee notes that based on the statements provided by the Government, the company denies the allegations of the complainant organizations and indicates that administrative proceedings are under way regarding the violation report of the labour inspectorate of June 2013. The Committee notes that the company denies that it infringed trade union rights, that it interfered with the establishment of the minority trade union or that it threatened workers, forcing them to resign from the majority trade union. With regard to the latter point, the company refers to the labour inspectorate’s conclusions regarding the lack of conclusive proof. The Committee notes that the company denies all allegations of acts of favouritism (economic benefits, housing, etc.) and underlines that the statements in the Violation Report are only indicia or pieces of evidence and do not constitute conclusive proof. The Committee notes, however, that the Violation Report of the labour inspectorate identifies acts of discrimination against the members of the complainant trade union and acts of favouritism towards members of the other trade union.
3. 828. The Committee observes that the Government declares that, in accordance with legislation and collective bargaining, it is lawful to conclude collective agreements with minority trade unions, which affects their respective members, and that this is compatible with the collective agreement with the majority trade union which affects the entire workforce. The Committee notes that the Government justifies the different types of specific benefits in the collective agreements with the minority trade union on the basis of the different bargaining committees, closing dates, duration of the bargaining process, etc. However, it states that the present complaint refers to the collective agreement 2013–14, in which the minority trade union obtained lower benefits than those obtained by the majority trade union. The Committee observes, however, that the articles in the legislation provided by the complainant organization only provide for collective bargaining rights of minority trade unions where no trade union has an absolute majority of worker members. The Committee also notes the observation made by the labour inspectorate concerning the fact that the conclusion of an agreement with the minority trade union while an agreement was being concluded with the complainant organization (that is, the majority trade union) was an anti-union practice. The Committee wishes to highlight that while Convention No. 98 is compatible both with systems that grant bargaining rights to the most representative organization which affect the entire workforce erga omnes and systems which allow minority trade unions to bargain on behalf of their members, in the former case it is not consistent also to grant collective bargaining rights in the same field to minority trade unions and, in practice, doing so may lead to anti-union practices.
4. 829. The Committee regrets the excessive delay of the administrative authorities which have still not concluded the administrative proceedings concerning the violation report against the company and recalls that justice delayed is justice denied [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 105].
5. 830. Observing that the Violation Report of the labour inspectorate (March 2013), finding that the complainant trade union’s rights were violated, suggested imposing a fine on the company (PEN47,000) for “very serious infringements”, the Committee requests the Government to keep it informed of the outcome of the relevant administrative proceedings regarding the various anti-union practices alleged in the present case and expects the proceedings will be concluded without further delay.
6. 831. The Committee also expects that if the alleged acts of discrimination and favouritism are confirmed by the labour inspectorate, the necessary measures will be taken to remedy the situation.