Report in which the committee requests to be kept informed of development - Report No 335, November 2004

1. 1186. The complaints are contained in communications from the Federation of Peruvian Light and Power Workers (FTLFP) dated 17 July 2003, and from the General Confederation of Workers of Peru (CGTP) dated 1 and 10 December 2003.
2. 1187. The Government sent partial observations in communications dated 4 May and 22 June 2004. At its June 2004 meeting, the Committee issued an urgent appeal to the Government to transmit its observations [see 334th Report, para. 9].
3. 1188. Peru 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 complainants’ allegations

1. 1189. In its communication of 17 July 2003, the Federation of Peruvian Light and Power Workers (FTLFP) alleges that, in violation of the terms of the existing collective agreement/arbitral award, state enterprise Electro Sur Este S.A.A. used threats of dismissal and other sanctions in order to insist that trade union travel expenses should be accounted for. The complainant organization adds that this facility afforded to trade unions in the national electricity industry dates back to the 1970s. The complainant points out that, since the time of the entry into force of the agreement/arbitral award regarding trade union travel expenses, the enterprise in question has paid such expenses without laying down any requirements or requiring accounts. The complainant organization notes that, on this matter, the latest arbitral award, dated 30 May 2004, stipulated the following: “In addition, those officials on trade union business away from their normal place of work and/or attending trade union events shall continue to receive trade union travel expenses to cover expenses incurred whilst carrying out their duties and the cost of their transportation as set out under the aforementioned previous point.”
2. 1190. FTLFP adds that, recently, at the start of the annual collective bargaining process, some of the enterprise’s employees have been harassing union officials and putting pressure on them. More specifically, the complainant organization states that union officials Nazario Arellano Choque and Efrain Yepez Concha were subjected to scare tactics by employees of Electro Sur Este S.A.A.
3. 1191. In its communication dated 1 December 2003, the General Confederation of Workers of Peru (CGTP) states that the Luz del Sur company is the property of two transnational companies, Sempra Energy International and Public Service Enterprise Group (PSEG). The CGTP notes that the Unified Trade Union of Electricity Workers of Lima and Callao (SUTREL) took action in support of a decision handed down by the Tax Court which stated that, as a part of its supervisory remit, the National Tax Administration Superintendency (SUNAT) should review divisions, mergers, revaluations and depreciations of electricity companies in line with regulation VIII of the Tax Code.
4. 1192. The complainant organization adds that, having acquired Luz del Sur, as has been the practice in privatized companies in Peru, the management then proceeded to dismiss over 50 per cent of the company’s permanent workforce, in accordance with section 34 of Presidential Decree No. 003-97-TR that allows for arbitrary dismissal “with no reason given”. At the same time, the company replaced these workers with employees of (temporary) service enterprises and ultimately outsourced several aspects of its main activity with the clear aim of slashing the number of workers belonging to the trade union. This action was also intended as an attack on freedom of association in that it was aimed at: (a) penalizing union membership through the threat of dismissal; (b) weakening as far as possible the trade union organization representing the workers; (c) outsourcing services such as billing, complaints, repairs, power cuts, amongst others, with the aim of denying workers the right to join a trade union and, consequently, to collective bargaining.
5. 1193. The CGTP points out that, in carrying out its responsibility as a representative body in accordance with the Act on labour relations and with section 9 of Act No. 26,636 and article 28 of the Political Constitution, SUTREL has run campaigns, not only for the defence of the individual and/or collective rights of its members, but also with the aim of giving people guidance regarding the defence of their rights and the nation as a whole. These perfectly legal activities have taken the form of written representations addressed to government authorities for protection against arbitrary charges, etc. As is natural, in his role as chief representative of the union, the Secretary-General of SUTREL, Mr. Luis Martín del Río Reátegui, has always been at the forefront of these activities. As already mentioned, as a part of these activities SUTREL launched a campaign to publicize the tax problem affecting the Luz del Sur S.A.A enterprise.
6. 1194. The CGTP alleges that, for no apparent reason, Luz del Sur S.A.A. initiated dismissal proceedings against Mr. Luis Martín del Río Reátegui and that, on 23 August 2003, he received a letter from the company, dated 22 August, giving him his notice. The letter contained several totally unsubstantiated accusations as to his behaviour. More specifically, CGTP points out that the Secretary-General was accused of the following: (a) sending out public communications, together with other individuals, to various recipients and systematically and repeatedly issuing statements to the press containing slanderous comments regarding his employer (Luz del Sur), as well as the company’s management and board of directors; (b) drafting SURTEL communications in which “slanderous” accusations were directed against Luz del Sur (describing the company’s conduct using words such as “arrogance”, “blackmail” and “benefits” and “regulations drawn up by the mafia in the Fujimori/Montecinos government”); (c) stating in the daily newspaper La Republica that the company had carried out “fraudulent” revaluations, as well as tax evasion; (d) displaying a lack of loyalty towards his employer and betraying the latter’s trust by damaging the company; (e) intending to damage the image and good name of the company by contacting the President of the Republic and other national authorities, accusing the company of tax evasion, as well as fraudulent recourse to Act No. 26,283; and (f) being intent on damaging the company and its executives, as well as its public image.
7. 1195. The CGTP indicates that, based on the aforementioned facts and in application – erroneous, according to CGTP – of section 25 of Presidential Decree 003-97-TR, the Luz del Sur company accused the Secretary-General of SUTREL of having committed the following serious offences, punishable with dismissal: (a) failure to fulfil work-related obligations and consequent loss of industrial goodwill and failure to observe internal work regulation No. 18.25; and (b) a serious lack of discipline, making slanderous remarks and issuing offensive verbal and written statements regarding the company, the company’s representatives, management staff and other workers.
8. 1196. The complainant organization denies that the Secretary-General of SUTREL committed any of the offences of which he has been accused. In particular the complainant organization stresses the fact that he took part in the presentation of a written representation addressed to the state authorities in his capacity as a union member and as Secretary-General, exercising his right to trade union autonomy, freedom of opinion, and to defend workers’ rights and national interests. It also points out that, in none of the texts that have been published is it stated or hinted that the company or its employees have in the past committed an offence, or that they are doing so now. SUTREL was not in any way, be it explicitly or tacitly, directly or indirectly, suggesting that there had been criminal conduct. It sought, rather, to explain that inappropriate use had been made of tax benefits, and hence the tax assessment would have technical and legal elements that justify it.
9. 1197. The complainant organization points out that SUTREL has not adopted a confrontational stance in the face of the company’s subjective claims that it has been damaged, insulted and slandered. Rather than starting a legal and political battle, SUTREL has sought to establish a direct dialogue through the labour authority. Prior to the dismissal of the Secretary-General there had been a request and two summonses to appear before the administrative labour authority, to which Luz del Sur refused to respond. The CGTP and other representative organizations have protested vigorously and have requested that Mr. Luis del Río be immediately reinstated in his post as a matter of urgency.
10. 1198. In its communication dated 10 December 2003, the CGTP alleges that the administrative labour authority has not registered the executive committee of the Peruvian Union of Folklore Artists (SITAFP), under the pretext that six former members put forward objections. The complainant organization further alleges that those same workers who opposed the registration of the executive committee used weapons to violently seize the trade union’s premises on 2 December 2003; the complainant organization states that, hours later, the premises were returned to the trade union with the help of the National Police.

B. The Government’s reply

1. 1199. In its communication dated 4 May 2004, the Government notes that Luz del Sur S.A.A. states that it is not true that Mr. Luis Martín del Río Reátegui was dismissed because of the campaign that was started to support SUNAT. He was dismissed because of the serious offence he had committed in making slanderous and insulting remarks about the company and its employees in various media. The company adds that the official in question then acted improperly in attempting to hide behind his trade union office. Furthermore, it was not necessary to make slanderous remarks in order to carry out any kind of defence or support, as there is no law that authorizes lack of respect or personal slander as a consequence of a complaint, since this should be done through legal channels. Consequently, Mr. del Río Reátegui could have initiated and run his campaign in support of SUNAT without resorting to insults or slander.
2. 1200. The company points out that the following statements were included in the appeal addressed to the President of the Republic, members of Congress and of the Tax Board on behalf of SUTREL: (1) “… At the current time … the workers must … take a stand with respect to national interests when these interests are unjustly affected, as is the case with the tax evasion committed by the electricity companies over the last nine years …”; (2) “upon transfer to the Edelnor, Edegel and Luz del Sur companies, the said fixed assets are revalued at scandalously high rates …, in addition to the unscrupulous and shameful increase in the value of the fixed assets, the value of fixed assets belonging to Electrolima S.A., which were not received, was also included. … It having been clearly shown that all of this was done with the aim of evading income tax, making fraudulent use of Act No. 26,283, we, the workers employed at these companies, testify that the mergers and divisions involving our employers were manifestly not carried out in accordance with Act No. 26,283; on the contrary the sole aim was to carry out a fraudulent revaluation of fixed assets …”; (3) “… it is unclear why these companies do not pay tax, despite the fact that, since 1994, they have been generating significant revenues … we have been saying since 1994 that they have been generating significant revenues … we call on the representatives of our employers, as well as on those holding shares in these companies, to stop setting a bad example and to acknowledge what they have done and show some shame in front of the nation…”.
3. 1201. According to the enterprise, the above statements made by Mr. Luis Martín del Río Reátegui contain various slanderous elements, e.g.: (a) the expression “blackmail” is used repeatedly, a term which refers to criminal, or at least reprehensible, behaviour and is therefore slanderous; (b) he uses the words “arrogance”, “scandalously” and “perpetrated” to describe the company’s actions, displaying intent to damage or obstruct, insult and not simply argue or even condemn; (c) he links Luz del Sur S.A.A. to “benefits”, “advantages” granted by “the mafia”, “the corrupt fugitive Fujimori government”. Here, his intention is also clearly, to present the company as being an accomplice to corruption or linked to corruption, thus damaging its image; (d) alongside this, he accuses Luz del Sur S.A.A. of “political blackmail” and of having launched a “campaign of destabilization”. This is not a trade union speaking up for workers’ rights, but an individual acting deliberately to damage the image of his employer; (e) he uses the terms “tax evasion”, “fraudulent use of the Act” and “fraudulent revaluation”, all of which suggest that he is openly accusing officials of Luz del Sur S.A.A. of having committed an offence; (f) he accuses Luz del Sur S.A.A. of “non-payment of tax”. Here, he is making a groundless accusation in an attempt to ruin the company’s image. Luz del Sur S.A.A. has always paid its taxes, as evidenced by the fact that, every year since privatization, the company has paid the workers their shares in the profits (except for the financial year 1994, when the company made a tax loss); and (g) the representatives of and shareholders in Luz del Sur S.A.A. are called on to “stop setting a bad example” and to “acknowledge what they have done and show some shame”. The remarks made attacking the representatives and shareholders of Luz del Sur S.A.A. are extremely offensive and damaging, both to their images and that of the company, considering that they have always acted within ethical, moral and legal bounds.
4. 1202. The company denies that it has dismissed over 50 per cent of the permanent workforce by sheltering behind the existence of section 34 of Presidential Decree No. 003-97-TR, the consolidated text of the Act on productivity and labour competitiveness. The company explains that most of the staff at Luz del Sur S.A.A. retired of their own free will, taking advantage of the incentive schemes that the company offered in certain cases, which included reasonably attractive financial incentives, independent of the social benefits (the financial incentives were always higher than the amount set as severance pay for arbitrary dismissal). The company denies that the reorganization process was aimed at penalizing union membership through threats of dismissal, nor was it aimed at weakening trade union organizations, as evidenced by the fact that, each year, the company concludes collective agreements with the two trade union organizations represented in it.
5. 1203. The company adds that, prior to dismissing Mr. Luis Martín del Río Reátegui, it had fulfilled all the relevant procedural requirements involved in the dismissal of an employee: a letter, certified by a notary and dated 22 August 2003, was sent to him in which the charges which led to his dismissal were clearly laid out. Mr. Luis Martín del Río Reátegui answered the letter but did not contest the charges made against him, thus confirming his guilt. The letter sent to Mr. Luis Martín del Río Reátegui explained that he had committed serious offences under the terms of subsections (a) and (f) of section 25 of Presidential Decree No. 003-97-TR, the consolidated text of the Act on productivity and labour competitiveness, and regulation 18.25 of the internal work regulations. The company goes on to say that Mr. del Río Reátegui’s attempt to shield his individual actions behind his trade union official is not valid as a defence, as his trade union office does not exonerate him from his duties as a worker and that he had wrongly claimed to represent all the workers in the company.
6. 1204. For its part, the Government notes that Mr. Luis Martín del Río Reátegui has appealed to the judiciary in relation to his dismissal, bringing an action against Luz del Sur S.A.A. before the 9th Labour Court of Lima for nullity of arbitrary dismissal, with the aim of being reinstated in his post according to the terms of subsection (a) of section 29 of Presidential Decree No. 003-97-TR, the consolidated text of Legislative Decree No. 728 (Act on productivity and labour competitiveness) which establishes that any dismissal motivated by trade union membership, or participation in trade union activities, is null and void. Thus nullity applies in the case of any dismissal illegally impairing freedom of association. The Government states that the Republic of Peru, like any other constitutional democracy, makes provision for the separation of powers (article 43 of the Peruvian Political Constitution), according to which public functions are distributed. The Government therefore declares that it undertakes to keep the International Labour Organization informed of the outcome of the legal proceedings against the employer.
7. 1205. In its communication dated 22 June 2004, the Government refers to the allegations that the administrative labour authority, acting through the Subdirectorate of General Registrations and the Directorate for the Prevention and Settlement of Labour Disputes, has been blocking the registration of the executive committee of the Peruvian Union of Folklore Artists (SITAFP).
8. 1206. The Government states that it requested information on this case from the Subdirectorate of General Registration and Certification and the latter replied on 2 March 2004, as follows:
   • – on 15 November 2002, the administrative labour authority became aware of the latest meeting of the executive committee of SITAFP, with the election as Secretary-General of Mr. Fausto Castillo Huiza for the 2001-03 period;
   • – when the latter Secretary-General died, a communication was received on the restructuring of the executive committee represented by Mr. Eladio Rogelio Sánchez Rodríguez but, at the same time, Mr. Carlos Rolando Guillén Oporto announced that another executive committee had been formed for the 2002-05 period. Given the situation, the administrative labour authority decided not to issue a decision, in accordance with the terms of section 8 of Presidential Decree No. 011-92-TR, implementing regulation of the Act on collective labour relations. This decision was confirmed through Directorate Order No. 096-2003-DRTPEL-DPSC dated 28 April 2003;
   • – on 9 June 2003, the representatives of the restructured executive committee (Rómulo Mendoza Castillo and Eladio Rogelio Sánchez Rodríguez) requested that official stamps be placed on four books. In reply, on 14 June 2003, the administrative labour authority issued a resolution referring back to the aforementioned resolution (in which the administrative labour authority decided not to issue a decision);
   • – an action for nullity was lodged against the latter resolution on 14 June 2003, and was found to be groundless on 5 September 2003; an appeal was then lodged against this decision, and the case was referred to the Directorate for the Settlement of Disputes for decision;
   • – the trade union represented by Mr. Carlos Rolando Guillén Oporto sent a communication announcing the election of the executive committee for the 2003-06 period, through application No. 019846 dated 28 November 2003;
   • – through application Nos. 020308 and 020372 dated 10 and 11 December 2003, respectively, an electoral committee, presided over by Filomeno Malpica Iparraguirre and Rogelio Sánchez Rodríguez, announced the election of another executive committee that is represented by Mr. Porfirio Gonzáles Sánchez, for the 2004-06 period;
   • – through document No. 002443 dated 12 January 2004, presented by Mr. Carlos Guillén Oporto, the former Minister of Labour and Employment Promotion was requested to intercede so that the executive committee could be registered;
   • – on 13 January 2004, Mr. Rogato Lucio Zavala Molina, in his capacity as a member of the trade union, contested the election of the executive committee represented by Mr. Porfirio Gonzáles Sánchez;
   • – on 27 January 2004, in application No. 001277, Mr. Porfirio Gonzáles Sánchez reiterated his request for the recognition of the executive committee headed by himself for the 2004-06 period. The applications will be processed once the supporting documents that are needed for issuing a decision have been returned.
9. 1207. The Government adds that the complainant organization has not taken into account the reason why the Ministry for Labour and Employment Promotion decided to issue the resolution dated 15 November 2002, confirmed by Directorate Order No. 96-2003-DRTPEL-DPSC dated 28 April 2003, in which the administrative labour authority decided not to handle the applications for recognition and registration of the restructured executive committee of SITAFP. The Ministry of Labour refrained from acting because two applications were presented to the administrative labour authority at the same time, requesting the registration of executive committees whose terms of office overlapped and which were made up of different members; such a situation meant that it was not possible to determine which of the executive committees was the one that had been elected to represent the members of the aforementioned trade union organization. As this situation arose out of a dispute within a trade union, it was decided to apply the legal provisions contained in section 8 of Presidential Decree No. 011-92-TR, implementing regulation of the Act on collective labour relations, which specifies that, in the case of disputes between trade unions or within a trade union, the administrative labour authority shall be guided by the findings of the judiciary. The Government emphasizes that, for the reasons already given, it can be seen that the Ministry of Labour and Employment Promotion has not intervened in SITAFP’s activities, neither does the fact that the trade union organization has not been registered constitute a violation of the complainants’ right to freedom of association; on the contrary, respect has been shown for the decisions taken within each trade union by leaving it to the judiciary to clear up the disputes that arise within trade unions.
10. 1208. Finally, the Government confirms that Peru’s legal system contains the guarantees necessary for the effective protection of the right to freedom of association. Furthermore, the State, in accordance with the international Conventions signed with the ILO, has at no time attempted to obstruct the right of the complainant organization to organize. On the contrary, in order to safeguard these rights, the administrative labour authority, on seeing that the election of Mr. Carlos Rolando Guillén Oporto as Secretary-General of the trade union for the 2002-05 period overlapped with that of the trade union’s executive committee for the 2002-03 period, represented by Mr. Eladio Rogelio Sánchez Rodríguez, has prudently chosen to refrain from handling the case and from issuing a ruling until the controversy within the aforementioned trade union has been resolved.

C. The Committee’s conclusions

1. 1209. The Committee observes that: (1) the Federation of Peruvian Light and Power Workers (FTLFP) alleges that state enterprise Electro Sur Este S.A.A. has violated the terms of an arbitral award by using threats of dismissal and other sanctions when insisting that trade union travel expenses should be accounted for; and (2) the General Confederation of Workers of Peru (CGTP) alleges: (i) the dismissal of the Secretary-General of the Unified Trade Union of Electricity Workers of Lima and Callao (SUTREL), Mr. Luis Martín del Río Reátegui from the Luz del Sur company, as a consequence of actions undertaken by the trade union in relation to the company’s tax situation (it is also alleged that, since the privatization of the company, there has been an ongoing campaign to penalize trade union membership) and (ii) the administrative labour authority’s refusal to register the executive committee of the Peruvian Union of Folklore Artists (SITAFP), as well as the violent seizure of the trade union’s premises by a group of workers opposed to the registration of the executive committee.
2. 1210. With respect to the allegation that state enterprise Electro Sur Este S.A.A. has violated the terms of an arbitral award by using threats of dismissal and other sanctions when insisting that trade union travel expenses should be accounted for, the Committee regrets the fact that, despite the time which has elapsed and after having issued an urgent appeal for the Government to send its observations as a matter of urgency [see 334th Report, para. 9], the Government has still not sent its observations. The Committee therefore urges the Government to carry out an investigation without delay into this allegation and to keep it informed in this respect.
3. 1211. As regards the allegation that, having acquired Luz del Sur, the management then proceeded to dismiss over 50 per cent of the company’s permanent workforce, in accordance with section 34 of Presidential Decree No. 003-97-TR that allows for arbitrary dismissal “with no reason given” and replaced these workers with employees of (temporary) service enterprises and ultimately outsourced several aspects of its main activity with the clear aim of slashing the number of workers belonging to the trade union, the Committee observes that the company: (1) denies that it has dismissed over 50 per cent of the permanent workforce by sheltering behind the existence of section 34 of Presidential Decree No. 003-97-TR, the consolidated text of the Act on productivity and labour competitiveness; (2) explains that most of the staff at Luz del Sur S.A.A. retired of their own free will, taking advantage of the incentive schemes that the company offered in certain cases, which included reasonably attractive financial incentives, independent of the social benefits; (3) denies that the reorganization process was aimed at penalizing union membership through threats of dismissal, nor was it aimed at weakening trade union organizations, as evidenced by the fact that, each year, the company concludes collective agreements with the two trade union organizations represented in it. Noting the contradiction that exists between the statement of the complainant and that of the company, the Committee requests the Government to send additional observations in this regard.
4. 1212. With respect to the alleged dismissal of the Secretary-General of the SUTREL trade union, Mr. Luis Martín del Río Reátegui, from the Luz del Sur company, as a consequence of the actions undertaken by the trade union in relation to the company’s tax situation, the Committee notes that the Government states that, according to the company, the dismissal in question was based on the individual in question having committed serious offences under sections (a) and (f) of section 25 of Presidential Decree 003-97-TR and regulation 18.25 of the internal work regulations, having made slanderous and insulting remarks about the company and its officials. The Committee also notes that the Government states that Mr. Luis Martín del Río Reátegui has brought an action against his dismissal before the judiciary, with the aim of being reinstated in his post. The Committee expresses the hope that the judicial authority will come to a quick decision on the dismissal in question and, should it order that Mr. Reátegui be reinstated, asks the Government to ensure that the judicial decision is put into effect immediately and that he is paid any outstanding wages. The Committee requests the Government to keep it informed of the judicial decision and to send it a copy of the judgement handed down. Lastly, with respect to the general allegation that, since the privatization of the Luz del Sur company, there has been an ongoing campaign to penalize trade union membership, the Committee notes that the enterprise denies that the reorganization process was aimed at penalizing union membership through threats of dismissal, nor was it aimed at weakening trade union organizations, as evidenced by the fact that each year the company concludes a collective agreement with the two trade unions represented within the company.
5. 1213. With respect to the administrative authority’s alleged refusal to register the executive committee of the SITAFP, the Committee notes that the Government states that: (1) the administrative authority decided to refrain from recognizing and registering the executive committee of SITAFP because two applications to register executive committees whose terms of office overlapped and which were made up of different members were presented to the administrative labour authority at the same time; (2) against this background, it was decided to apply the terms of Presidential Decree No. 011-92-TR, the implementing regulation of the Act on collective labour relations, which specifies that, in the case of disputes between trade unions or within a trade union, the administrative labour authority shall be guided by the findings of the judiciary. The Committee observes that, according to the Government’s observations, there are still two appeals pending which were lodged with administrative bodies. The Committee therefore asks the Government to keep it informed of the result of the pending administrative appeals related to these allegations, as well as of the outcome of any legal proceedings initiated in this respect.
6. 1214. With regard to the alleged violent seizure of SITAFP’s trade union premises by a group of workers opposed to the registration of an executive committee, the Committee observes that the Government has not sent its observations on this issue. However, the Committee observes that, according to the complainant organization, the premises were returned with the help of the National Police. In these circumstances, the Committee will not pursue its examination of this allegation.