Report in which the committee requests to be kept informed of development - REPORT_NO386, June 2018

1. 353. The complaint is contained in a communication dated 21 October 2016 from the Single Confederation of Workers of Honduras (CUTH).
2. 354. The Government sent its observations in communications dated 3 May 2017 and 23 April 2018.
3. 355. Honduras has 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).

A. The complainant’s allegations

1. 356. In a communication dated 21 October 2016, the complainant organization alleges non compliance by the Honduran Social Security Institute (hereinafter “the Institute”) with various clauses of the 14th collective labour agreement currently in force, concluded in April 2011 with the Union of Workers of the Honduran Social Security Institute (SITRAIHSS) (which is part of the Unitary Federation of Honduran Workers (FUTH), which is in turn affiliated to the complainant organization).
2. 357. The complainant states that the Government decided in 2014 to intervene in the affairs of the Institute in order to safeguard public interests, appointing an oversight committee for this purpose, which has been in charge of the Institute’s administration ever since. The complainant alleges that, since 2014, the oversight committee has failed to comply with nine of the clauses of the collective labour agreement and that, despite the fact that the SITRAIHSS wrote on a number of occasions requesting the oversight committee to comply fully with the collective agreement, it had replied that it was unable to accede to such a request. The complainant further states that the SITRAIHSS filed four complaints with the Ministry of Labour and Social Security between 2015 and 2016 regarding non-compliance with the nine clauses of the collective agreement alleged in this complaint.

Clause 73(h)

1. 358. On 11 November 2015, the SITRAIHSS filed a complaint for non-compliance with clause 73(h) of the collective agreement, which provides that the Institute will grant paid union leave to workers for various purposes, including attending conferences, union-related training courses, congresses, seminars and other similar events to do with union activity, for each activity’s duration, provided that the number of absent workers is not such that the normal functioning of the institution is adversely affected. The complainant claims that the Institute has failed to grant paid leave to union leaders or to those carrying out trade union activities and that, in a letter sent in September 2015, the oversight committee stated that, while there was no problem in granting union leave, this should be subject to section 95(5) of the Labour Code, which prohibits employers from remunerating union leave. Concerning the complaint filed, the complainant states that, although the Ministry of Labour and Social Security decided in November 2016 to impose a penalty on the Institute for violation of freedom of association, it revoked its decision following counter evidence presented by the oversight committee, thereby rendering null and void the previously imposed penalty.

Clauses 27 and 29

1. 359. On 19 April 2016, the SITRAIHSS filed a complaint for non-compliance with clause 27 (regarding meal breaks included in the working day and the right of workers on certain shifts in hospital medical units to be provided with a snack and breakfast) and clause 29 of the collective agreement (according to which the Institute undertakes to provide water coolers with sufficient supplies of water bottle refills in accessible locations for service units). According to the complainant, there has been a failure to comply with both clauses, since: (i) food is not being provided to workers, meaning that they incur additional costs; and (ii) water coolers are not being provided for staff, which is putting workers’ health at risk, given that they have the right to satisfy their thirst in the workplace with the highest quality water (pure water) that poses no risk to health. The complainant states that, in a letter dated 17 February 2016, the Institute informed it that: (i) due to budget constraints, it was decided that food would be provided on a priority basis to patients and not to staff so long as the difficult financial situation continues; and (ii) the Institute did not have the means to cover the amount required to buy water for employees. The complainant states that, following the submission of a complaint on the matter, on 11 August 2016 the Ministry of Labour and Social Security decided to impose a financial penalty on the oversight committee. Despite this, the situation has not been resolved.

Clauses 4 and 45

1. 360. On 11 July 2016, the SITRAIHSS filed a complaint for non-compliance with clause 4 (monthly meetings to be held between the trade union and the Institute’s management, and extraordinary meetings if the parties so agree) and clause 45 (public holidays when staff required to work will receive triple normal pay) of the collective agreement. According to the complainant, both clauses were allegedly being violated, given that: (i) the current administration is not concerned about labour disputes within the Institute and is simply not interested in meeting with the SITRAIHSS; and (ii) since 2014, the Institute’s oversight committee has been instructing the Human Resources Department to advise that, on the sole initiative of the oversight committee, the institution’s activities were being reprogrammed, removing the holidays already established in the collective agreement. The complainant states that the processing of the complaint has become protracted in the Ministry of Labour and Social Security and the outcome is still pending.

Clauses 33, 36, 39 and 49

1. 361. On 30 August 2016, the SITRAIHSS filed a complaint for non-compliance with clause 33 (Christmas and New Year bonus), clause 36 (sum donated by the Institute each April for the 1 May celebrations), clause 39 (sum of money given each year by the Institute for study scholarships to be granted by the trade union to workers’ children) and clause 49 (the minimum wage for newly recruited workers is fixed by the Institute in line with the amount stipulated by the State, which can automatically be amended by new legislation) of the collective agreement. The complainant alleges that the above clauses have been violated, given that since 2014 the Institute has only partially complied with its obligations by paying some of the agreed amounts. Moreover, although in a letter dated 2 October 2015 the oversight committee announced that from October 2015 the minimum wage agreed in the collective agreement would be paid, the Institute allegedly failed to comply with its obligation to pay the amount of minimum wage due for the period between January 2014 and September 2015. With regard to the complaint, according to the complainant, the processing of the complaint has become protracted in the Ministry of Labour and Social Security and the outcome is still pending.

B. The Government’s reply

1. 362. In a communication dated 3 May 2017, the Government indicates that the Institute is a state budgetary and non-profit institution, responsible for providing social security and health coverage and protection from occupational risks. The Government states that: (i) it had intervened in the affairs of the Institute in 2014 because of failings in the management and administration of the Institute, which had led to a serious crisis situation and to financial collapse; and (ii) the objectives of the oversight committee are to restructure personnel administration and management, enhance service quality and ensure drug supplies. The Government adds that corruption had forced it not only to intervene in the affairs of the Institute, but also to conclude agreements with the Organization of American States in the fight against impunity. As a result, a joint body was established, called the Mission to Support the Fight against Corruption and Impunity in Honduras.
2. 363. The Government adds that the institutional crisis resulted in the oversight committee deciding to bail out the Institute, taking actions specifically aimed at mitigating the following risks: (i) the Institute’s closure, incurring social damage by preventing the delivery of pension and social security services; (ii) damage through the loss of a source of employment for all employees and officials in the institution due to the financial collapse; (iii) suspension of employment contracts without pay, and other extreme measures such as staff reductions; and (iv) the cessation of activities in connection with contracts concluded by former administrations that commit significant resources of the institution to service planning and delivery.
3. 364. The Government states that, given the above circumstances, the oversight committee opted to: (i) reduce current expenditure in order to provide and improve services to members; (ii) restore the image of and confidence in the institution; and (iii) change the system of internal control, with clear processes and mechanisms, thus reforming the institution. The Government emphasizes that the actions taken by the oversight committee were aimed at bailing out the Institute and lifting it out of the serious administrative, technical and financial situation it was in, using as a legal basis the provisions of the General Act on Public Administration, section 100 of which provides that:
   • The oversight committee has the same powers as those invested in administrators in the exercise of their legal representation. The very act of intervention is just cause for the oversight committee to temporarily suspend staff, terminate employment contracts or revoke agreements concluded with staff considered to be superfluous.
4. 365. The Government includes detailed information in its communication on the Institute’s financial situation before its intervention and describes each of the measures adopted by the oversight committee to fully settle the Institute’s main contractual obligations that posed financial and social risks. The Government also underlines that it is not, or has never been, its intention to violate any of the clauses, but rather to fulfil its responsibility of bailing out the Institute in order to consolidate and guarantee not only existing rights and benefits, but also to ensure the capacity to provide social security coverage, and on a sustainable basis.
5. 366. The Government states that the oversight committee prioritized compliance with all of the priority obligations of the Labour Code and the collective agreement in 90 per cent of cases, and emphasizes that there has been no failure to comply with the collective agreement, but rather that circumstances and conditions arose making it impossible to meet some of the non-priority obligations of the collective agreement because of the financial crisis faced by the institution. The Government also emphasizes that it has always complied with the following clauses of the collective agreement to ensure that all workers in the Institute enjoy benefits: clause 32 (voluntary redundancy bonus), clause 40 (assistance with the cost of spectacles), clause 41 (assistance with funeral costs), clause 42 (holiday pay), clause 43 (special leave (prophylactic)), clause 48 (adjustment for seniority (five-year period)), clause 54 (overtime premium), clause 56 (group life insurance), clause 67 (transport for night-shift workers), clause 73 (paid leave), clause 74 (study leave), clause 76 (shift changes), clause 77 (seniority bonus) and clause 85 (reimbursement of medical expenses).
6. 367. With regard to compliance with clause 73(h) of the collective agreement (union leave), the Government states that, on 30 November 2015, the oversight committee presented evidence to counter the General Labour Inspectorate’s notification informing the Institute of the imposition of penalties. The Government also emphasizes that, in accordance with the law, the oversight committee authorized unpaid union leave for the persons elected as members of the executive committee and who sought ongoing periods of leave in order to carry out trade union activities. According to the Government, this decision is based on the final subparagraph of section 95(5) of the Labour Code, which states that: “… employers are required to … grant union leave to the worker … .Where a worker holds union management positions, the leave shall last for as long as the worker remains in his/her post. The employer is prohibited from paying wages for this purpose. The leave in question shall be requested by the individual trade union organization”.
7. 368. As for the alleged non-compliance with clause 45 of the collective agreement (public holidays), the Government states that the Institute, in order to ensure that union members benefited from prompt care in the health system, decided to allow employees compensatory time off for the days when they are required to undertake activities as part as their duties. It also states that this measure was taken to ensure the well-being of members and that they receive prompt health care. Furthermore, with respect to clause 49, the Government states that the Institute has been paying the minimum wage agreed in the collective agreement since October 2015 and that the Institute has always ensured that members receive the benefits provided for in the Labour Code such as the 13th-month and 14th-month salary bonuses (clauses 50 and 51 of the collective agreement).
8. 369. Concerning clauses 27 and 29 of the collective agreement (food and water coolers for employees), the Government states that the Institute’s budgetary capacity is only sufficient to provide food for patients admitted to the country’s different hospital units. The Government points out, however, that all priority and substantive obligations, arising both from the Labour Code and the collective agreement, have been paid punctually every month to all employees. The Government emphasizes that the financial crisis faced by the Institute has resulted in it taking measures to control spending, earmarking available financial resources for priority expenditure. The Government also emphasizes that, from the date its intervention began, it has been paying the monthly deductions due from permanent employees, amounting to 1 per cent, punctually to the trade union organization. With regard to clause 4 (meetings between the trade union and the Institute authorities), the Government points out that the oversight committee has engaged in communication and ongoing dialogue whenever the trade union organization has requested it to do so and, as proof of this, they attach the attendance lists of the meetings between the oversight committee and the SITRAIHSS.
9. 370. In its communication dated 23 April 2018, the Government reports that, on 22 December 2017, the oversight committee signed an agreement with the Medical Association of the Honduran Social Security Institute (AMIHSS) and the Honduran Medical School (CMH) (organizations distinct from the complainant organization), which ended a strike called by the Institute’s doctors to seek a salary increase. The Government reports that the oversight committee undertook in this agreement to: (i) grant medical staff a salary adjustment equivalent to 11 per cent, starting in January 2018; and (ii) grant a one-off sum equivalent to a normal salary earned from December 2017 to those who worked throughout December without a break. The doctors, for their part, promised to return to work immediately. The oversight committee also undertook in this agreement to review two clauses of the collective agreement in the second quarter of 2018 relating to contests for the appointment of doctors and voluntary redundancies (clauses that are not subject to the complainant’s allegations of non-compliance in the present complaint).

C. The Committee’s conclusions

1. 371. The Committee observes that in the present case the complainant alleges non-compliance since 2014 with various clauses of the collective agreement concluded in 2011 between the SITRAIHSS and the Institute (a public body responsible for providing social security and health coverage and protection from occupational risks). The Committee notes that the complainant and the Government state that, in 2014, the Government decided to intervene in the affairs of the Institute in order to safeguard public interests, appointing for that purpose an oversight committee, which has been in charge of the Institute’s administration ever since. According to the Government: (i) the intervention in the affairs of the Institute was necessary because of corruption and managerial and administrative failings, which had led to a serious crisis situation within the Institute and to its financial collapse; and (ii) the main objective of the oversight committee is to restructure personnel administration and management, enhance service quality and ensure drug supplies.
2. 372. The Committee notes the complainant’s specific allegation that, since 2014, the oversight committee has failed to comply with nine clauses out of a total of 85 in the collective agreement in question. It also notes that, according to the documents attached by the complainant, in 2015 and 2016 the SITRAIHSS sent several letters to the oversight committee requesting it to comply fully with the collective agreement and that, in response, the oversight committee had emphasized that the intention had never been to affect employees but that, given the financial situation faced by the institution and the resultant recovery process, the main objective was to maintain sources of employment and to progressively ensure compliance with all obligations to ensure enjoyment of benefits.
3. 373. The Committee further notes that the complainant and the Government indicate that in 2015 and 2016 the SITRAIHSS filed four complaints with the Ministry of Labour and Social Security, alleging non-compliance with the nine clauses that are the subject of this complaint. Regarding the status of these complaints, the information provided by the complainant shows that: (i) although the Ministry of Labour imposed a penalty on the Institute for non-compliance with clause 73(h) (union leave was reportedly granted but only on an unpaid basis), following counter evidence presented by the oversight committee, the Ministry of Labour revoked its decision (on the basis that section 95(5) of the Labour Code prohibits employers from remunerating union leave), thereby rendering null and void the penalty imposed; and (ii) the Ministry of Labour also imposed a penalty on the Institute with respect to non-compliance with clauses 27 and 29 (food and water coolers for workers), despite which the situation has not been resolved in practice, according to the complainant. On this point, the Committee notes the Government’s statement that: (i) the Institute’s financial situation prevents it from covering this type of expense; (ii) budgetary capacity is only sufficient to provide food for patients admitted to the country’s different hospital units; and (iii) notwithstanding the foregoing, the oversight committee, despite the current financial crisis situation, is complying with the priority obligations of the Labour Code and over 90 per cent of those arising from the collective agreement.
4. 374. Moreover, the Committee observes that the Ministry of Labour has yet to express its position on the complaints relating to clause 4 (monthly meetings between the trade union and the Institute), clause 45 (public holidays), clause 33 (Christmas and New Year bonus), clause 36 (sum of money for the 1 May celebrations) and clause 39 (study grants). With regard to clause 49 (minimum wage), the Committee notes that, while the complainant acknowledges that from October 2015 the Institute paid the minimum wage agreed in the collective agreement, it is alleged that the oversight committee failed to comply with its obligation to pay the amount of minimum wage due for the period between January 2014 and September 2015.
5. 375. In light of the above, the Committee observes that: (i) in 2014, following serious financial difficulties caused by managerial and administrative failings, the Government appointed an oversight committee, which decided that, in the short term, it could not implement a number of clauses of the collective agreement currently in force within the institution (clauses that, according to the oversight committee, were not of a priority nature); (ii) although the Government stresses that the failure to implement certain clauses of the collective agreement is merely temporary, this situation following the financial crisis in the institution dates back to 2014, and the Government gives no indication in its reply as to when the current situation might end and when it will be in a position to comply fully with the collective agreement; (iii) several of the complaints of non-compliance with the collective agreement presented by the SITRAIHSS in 2015 and 2016 are still pending a decision by the Ministry of Labour; (iv) although the Government mentions a series of meetings held between the oversight committee and the SITRAIHSS since 2014, as well as an agreement signed in December 2017 with doctors’ organizations in order to end a strike, the Government does not state that it entered into negotiations with the SITRAIHSS regarding the impact of the Institute’s financial situation on the implementation of the collective agreement; and (v) under the Labour Code, the validity of the institution’s fourteenth collective agreement, signed in 2011 for a period of three years, will automatically be extended for periods of one year at a time, unless the parties, or one of the parties, expresses in writing their explicit wish to end the agreement.
6. 376. Underlining that agreements should be binding on the parties, the Committee recalls that it has highlighted the importance, in the context of an economic crisis, of maintaining permanent and intensive dialogue with the most representative workers’ and employers’ organizations, and that adequate mechanisms for dealing with exceptional economic situations can be developed within the framework of the public sector collective bargaining system [see Compilation of decisions of the Committee on Freedom of Association, sixth edition, 2018, paras 1334 and 1437]. [See also 364th Report, Case No. 2821 (Canada), para. 378]. In the light of the foregoing considerations, the Committee requests the Government to take the necessary steps to promote dialogue between the Institute and the SITRAIHSS so that the parties can consider appropriate ways to once again fully implement the collective agreement currently in force and address all other issues that they deem appropriate in accordance with the principle of voluntary collective bargaining. The Committee requests the Government to keep it informed in this regard.
7. 377. With regard to non-compliance with clause 73(h) of the collective agreement on paid union leave, the Committee notes that, according to the documents attached by the complainant and the Government, the Ministry of Labour based its decision to revoke the penalty previously imposed on section 95(5) of the Labour Code, in so far as it prohibits employers from granting paid union leave. In this connection, the Committee recalls that the issue of the payment of wages by the employer to full-time union officials should be up to the parties to determine and the Government should authorize negotiation on the issue of whether trade union activity by full-time union officials should be treated as unpaid leave [see Compilation, op. cit., para. 1296]. The Committee therefore requests the Government, in consultation with the representative workers’ and employers’ organizations, to take the necessary steps to review legislation so that the social partners may negotiate the possible remuneration of union leave. The Committee refers the legislative aspects of this case to the Committee of Experts on the Application of Conventions and Recommendations (CEACR).