Report in which the committee requests to be kept informed of development - Report No 367, March 2013

1. 270. The complaint is contained in a communication from the Canadian Union of Postal Workers (CUPW–STTP) dated 15 August 2011. In communications dated 19 August, 26 August and 8 September 2011 respectively, the Canadian Labour Congress (CLC), the UNI Global Union and the International Trade Union Confederation (ITUC) associated themselves with the complaint.
2. 271. The Government forwarded its response to the allegations in communications dated 28 September 2012, and 23 and 31 January 2013.
3. 272. Canada has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), but has not ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainants’ allegations

1. 273. In a communication dated 15 August 2011, the complainant organization alleges that the Federal Government of Canada violated the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), by passing Bill C-6, an Act to provide for the resumption and continuation of postal services.
2. 274. According to the complainant organization, Bill C-6, an Act to provide for the resumption and continuation of postal services, has impeded postal workers employed by Canada Post Corporation and represented by the CUPW–STTP from exercising their fundamental right to freedom of association by making it more difficult for workers to join unions, engage in free collective bargaining and exercise their right to strike. The complainant claims that by interrupting collective bargaining between the parties, referring the dispute over to compulsory and binding final offer selection arbitration, violating the union’s right to strike, and setting a dangerous precedent of premature government intervention in a labour dispute, where the parties had arrived at essential service protocols, the Federal Government has violated the terms of Convention No. 87. In the complainant’s view, Bill C-6 directly contravenes the provisions of Convention No. 87, which enshrine protections in regards to the freedom of association and sets a dangerous precedent of government intervention in labour disputes that do not involve essential service industries.
3. 275. Bill C-6 includes:
   • ■ Extension of the collective agreement: the collective agreement is restored until a new agreement has been determined by the arbitrator. This new agreement will expire on 31 January 2015.
   • ■ Lower wages imposed by law: The Bill legislates wage increases that fall significantly below the employer’s last offer of 1.9 per cent in 2011, 2012 and 2013, and 2 per cent in 2014. The law provides for increases of 1.75 per cent in 2011, 1.5 per cent in 2012, 2 per cent in 2013 and 2 per cent in 2014. This would take 875.50 Canadian Dollars (CAD) out of the pockets of an average full-time postal worker during the four years of the agreement. It represents a theft of CAD35 million from postal workers and their families.
   • ■ Final offer selection: The new collective agreement will be decided by a government-appointed arbitrator. The parties will each submit a draft collective agreement and the arbitrator must choose one in its entirety.
4. 276. The complainant organization believes that Bill C-6 is unnecessary. In early June 2011, when the union was on a series of rotating strikes, it publicly offered to return to work, with the sole caveat that the recently expired collective agreement be fully reinstated. The enterprise refused this offer and, on 14 June 2011, locked out Urban Operations bargaining unit members. The employer could have rescinded the lockout but refused to allow Urban Operations bargaining unit members to work in non-struck locations. Ironically, the back to work legislation retroactively imposed the recently expired collective agreement.
5. 277. The complainant indicates that the union initiated a picket protocol for other bargaining units and workers employed at the enterprise, which explicitly allowed union members of the Rural and Suburban Mail Carriers unit to work during the entire period of the strike and lockout. The picket protocol provided for a mechanism for members of the Union of Postal Communications Employees to work during this period. In addition, the protocol authorized postal cleaners and cafeteria workers to work during the entire period of the strike and lockout. In situations where the post office was in a shared facility, arrangements were made to authorize the access and egress.
6. 278. The complainant organization states that the union also developed a protocol with the employer and provincial, federal and territorial governments to allow for the processing and distribution of socio-economic cheques. This included Federal Government Canada Pension Plan, Old Age Security and Child Benefits cheques. Quebec, Ontario, Saskatchewan, Alberta and the North West Territories used this protocol to have some socio-economic cheques delivered. Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick, Manitoba, British Columbia, Yukon and Nunavut opted not to have social assistance cheques delivered through the enterprise.
7. 279. According to the complainant, the union has engaged in 11 rounds of bargaining since 1978. From 1978 to 1989, the bargaining certificate covered inside postal workers. From 1989 onwards, the bargaining certificate covered internal postal, delivery employees, retail employees, and technical and service workers. Out of the 11 rounds of bargaining since 1978, the Federal Government has resorted to back-to-work legislation, on five occasions.
   • ■ CUPW was ordered back to work in 1978.
   • ■ CUPW successfully bargained a collective agreement in 1980.
   • ■ CUPW achieved a collective agreement after a 42-day strike in 1981.
   • ■ CUPW successfully bargained a collective agreement in 1984.
   • ■ CUPW was ordered back to work in 1987.
   • ■ CUPW was ordered back to work in 1991.
   • ■ CUPW successfully bargained a collective agreement in 1994.
   • ■ CUPW was ordered back to work in 1997.
   • ■ CUPW successfully bargained a collective agreement in 2003.
   • ■ CUPW successfully bargained a collective agreement in 2007.
   • ■ CUPW was ordered back to work in 2011.
8. 280. The complainant organization provides for a brief chronology of the recent events:
   • ■ The union and the enterprise began bargaining for the Urban Operations Collective Agreement on or about 21 October 2010.
   • ■ As per the Canada Labour Code, the union applied for conciliation on 21 January 2011.
   • ■ The Urban Operations Collective Agreement expired on 31 January 2011.
   • ■ The parties continued to negotiate.
   • ■ On 11 April 2011, the union announced a 94.5 per cent strike vote and reported the highest turnout in history.
   • ■ Conciliation was extended to 3 May 2011.
   • ■ Mediation commenced on 4 May 2011.
   • ■ The parties continued to negotiate.
   • ■ The union served strike notice on 30 May 2011.
   • ■ At 10 a.m. on 30 May 2011, the enterprise announced the Urban Operations Collective Agreement was not in effect. Coverage under the dental, hearing and vision, and extended health-care plans was immediately stopped, which deprived union members access to much needed prescription medication. The enterprise also began immediately laying off temporary employees.
   • ■ On 10 June 2011, the union offered to return to work if the enterprise would reinstate the recently expired collective agreement. The enterprise refused.
   • ■ The union embarked on rotating strike action on 2 June 2011 at 11.59 p.m.
   • ■ The strike locations were as follows: 3 June 2011 (Winnipeg), 4 and 5 June (Hamilton), 6 June (Montreal), 7 June (Victoria, Moncton), 8 June (Edmonton, Calgary), 9 June (Labrador City, Acadie-Bathurst, Summerside, Ste. Therese, St. Jerome, Thunder Bay, Hearst, Brantford, St. Thomas, Flin Flon, Yellowknife, Whitehorse, Vernon), 10 June (Quebec City, Kitchener), 11 and 12 June (Red Deer), 13 June (Cornerbrook, Fredericton, Sydney, Nova Scotia, Mauricie, Sherbrooke, Windsor – Ontario, Niagara Falls, Regina, Nanaimo, Cornwall) and 14 June (Toronto, Montreal).
   • ■ On or about 8 June 2011, the enterprise announced their decision to cease letter carrier delivery on Tuesdays and Thursdays. Meanwhile volumes in many post offices were normal or above normal.
   • ■ On 14 June 2011, approximately 11.30 p.m., the enterprise announced a nationwide lockout. Workers in post offices across the country were escorted out of the workplace by the management.
   • ■ Union members commenced picketing all locations where Urban Operations bargaining unit members were working when the lockout was imposed.
   • ■ On 15 June 2011 in the morning, the Federal Minister of Labour stated she had received very few complaints about the labour dispute.
   • ■ On 15 June 2011 in the afternoon, the Federal Minister of Labour announced she would be bringing in back-to-work legislation.
   • ■ On 16 June 2011, the union met with the President of the enterprise in an effort to resolve the labour dispute.
   • ■ The union continued to meet with the enterprise and the mediator during this period in an effort to achieve a new Urban Operations Collective Agreement.
   • ■ On 20 June 2011, the Federal Government introduced Bill C-6 into Parliament.
   • ■ From 20 to 25 June 2011, the union made extensive efforts to resolve the labour dispute.
   • ■ Bill C-6 was passed by the House of Parliament on 25 June 2011 and by the Senate on 26 June.
   • ■ Union members began returning to work in the afternoon of 27 June 2011.
9. 281. The complainant organization concludes that, by enacting Bill C-6, the Federal Government terminated the right to strike, interrupted collective bargaining between the union and the enterprise and referred the dispute to compulsory and binding final selection arbitration, thus violating freedom of association principles enounced in Convention No. 87.

B. The Government’s reply

1. 282. In a communication dated 28 September 2012, the Government indicates that this document is presented in response to the complaint made by the CUPW alleging that Bill C-6, an Act to provide for the resumption and continuation of postal services, was enacted in violation of Convention No. 87. The Government states that it respectfully disagrees with the allegations and, given the nature of its intervention, respectfully requests that the complaint be dismissed.
2. 283. As regards the legislative regime for collective bargaining in Canada, the Government indicates that the majority of the Canadian labour force is subject to the various provincial labour statutes. Although only 6 per cent of the labour force is under federal jurisdiction, the key nature of the infrastructure and other industries falling within federal jurisdiction are of considerable importance to the Canadian economy. Industries that are subject to the federal industrial relations legislation include federal Crown corporations such as Canada Post. Part 1 of the Canada Labour Code (as last amended in 1998) is the statute that covers employees engaged in these industries (currently, approximately 800,000).
3. 284. The Government underlines that, in view of the fundamental constitutional principle that only the Parliament of Canada can make legislation in the federal jurisdiction, the parties to collective bargaining cannot bind the Parliament to amend or enact new legislation. With reference to Article 8 of Convention No. 87, the Government recalls that the mandate of the Committee and the ILO Conventions contemplate that collective bargaining operates within a legislative framework and that the Committee determines whether (draft) legislation complies with the principles of freedom of association and collective bargaining.
4. 285. The Government further indicates that the Minister of Labour is responsible to Parliament for the administration of the Canada Labour Code. The Federal Mediation and Conciliation Service (FMCS) of the Labour Program of Human Resources and Skills Development Canada administers the dispute settlement provisions of the Code, including all statutory conciliation and mediation functions. A conciliation officer is a government official whose role is to foster harmonious relations between trade unions and employers by assisting them in the negotiation of collective agreements and their renewal, as well as the management of the relations resulting from the implementation of the agreements. In addition, the FMCS carries out non-statutory preventive mediation and grievance mediation programs. The Canada Industrial Relations Board is responsible for the quasi-judicial aspects of the application of the Code’s provisions.
5. 286. Part 1 of the Canada Labour Code sets the general framework for collective bargaining in the federally regulated private sector, in particular the following: (i) exclusive bargaining rights are granted to bargaining agents representing employees in a given bargaining unit, generally on the basis of majority support; (ii) bargaining agents and employers have a duty to meet and bargain in good faith and to make every reasonable effort to conclude a collective agreement; (iii) strikes and lockouts are not permitted during the term of an agreement; (iv) notice to bargain for renewal and revision of an existing collective agreement may be given by either party within the period of four months immediately preceding the date of expiration of the term of the collective agreement; (v) if the parties fail to enter into or renew their collective agreement, either party may inform the Minister by sending a notice of dispute who can then appoint a conciliation officer, commissioner or Board; and (vi) the Minister may at any time appoint a mediator to assist the parties in settling a dispute (usually FMCS government official; sometimes independent third party from the private sector); this does not affect the acquisition of strike or lockout rights. According to the Government, in 2011–12, where a notice of dispute has been received by the Minister of Labour and the FMCS has assisted the parties, over 93 per cent of the collective bargaining disputes have been resolved without a work stoppage.
6. 287. With respect to the role of Canada Post, the Government indicates that Canada is the second largest country in the world with a total area of 9,984,670 square kilometres. The population of Canada is approximately 34 million people. While the majority live in cities, almost 9 million Canadians live in rural and remote areas of the country which occupy 9.5 million square kilometres (95 per cent of Canada’s territory). The Canada Post Corporation serves the public by providing quality postal services to all Canadians located in rural and urban areas in a secure and financial self-sustaining manner. It was legislatively created under the Canada Post Corporation Act and has a single shareholder which is the Government of Canada. Canada’s primary postal operator is a Crown corporation reporting to the Minister of Transport, Infrastructure and Communities and delivers more than 10 billion pieces of mail, parcels and messages annually to more than 15 million addresses across the country.
7. 288. According to the Government, in Canada, mail is the most convenient, inexpensive way to connect seniors or disabled citizens to the services upon which they rely; Canada Post is also an essential lifeline to Canadians who live in rural and remote areas for the delivery of items, such as prescription drugs. Individuals who receive welfare, pension or other government assistance cheques by mail are consequently very vulnerable to any interruption in that service. Small and medium-size businesses rely heavily on postal services to reach and serve their clients and customers.
8. 289. As regards the relationship between Canada Post and the union, the Government indicates that Canada Post is one of the largest employers in Canada. It employs about 69,000 workers, approximately 59,000 of whom are unionized employees. The largest bargaining unit at Canada Post is the CUPW – Urban Postal Operations has 50,000 members and represents plant and retail employees, letter carriers and mail services couriers.
9. 290. The Government then provides a brief overview of Canada Post’s and CUPW’s long history of acrimonious collective bargaining that has often resulted in work stoppages. CUPW started representing employees at Canada Post in January 1975. The Government of Canada has provided extensive assistance to the parties for the past 37 years by appointing multiple conciliation boards, conciliation officers and mediators to support the parties in reaching mutually acceptable collective agreements. Various ministers of labour contacted the parties over the years to encourage them to settle their disputes. However, a profound reciprocal distrust between CUPW and Canada Post has been observed over the years with a dampening effect on the negotiations. In the Government’s view, history demonstrates that the parties have been unable to reach collective agreements and have failed time and time again to renew agreements without Government intervention.
10. 291. Given the difficult collective bargaining relationship between Canada Post and CUPW, the Government states that, in the 2011 bargaining dispute, it was determined to provide as much support as possible to the parties in this latest round of collective bargaining.
11. 292. In October 2010, the parties started bargaining in direct negotiations toward the renewal of their collective agreement (set to expire on 31 January 2011), covering employees represented by CUPW. After reaching an impasse in direct negotiations, a notice of dispute was received on 21 January 2011. On 31 January, the Minister of Labour appointed a conciliation officer to assist the parties in their negotiations. The conciliation officer met with the parties on 2, 9, 10, 22–25 and 28 February 2011, and even more frequently in March (every day from 1 to 15 March, as well as 21–24 and 28–31 March 2011).
12. 293. The Government reports that on 11 March 2011, Canada Post and CUPW signed the Agreement on Processing and Delivery of Government Cheques in the Event of an Interruption of Postal Service Resulting from a Strike or Lockout (attached to the complaint), to ensure that delivery of pension and social assistance cheques would occur in the event of a work stoppage. The Agreement provided for up to two national days of delivery each month. From 29 March to 17 April 2011, CUPW conducted a strike vote across the country and on 18 April, CUPW announced that 94.5 per cent of its membership voted in favour of a strike mandate.
13. 294. The conciliation process that was scheduled to end on 31 March 2011, was extended by the Minister of Labour to 3 May, to allow the parties every opportunity to conclude a collective agreement. The conciliation officer again met extensively with the parties on 1, 4–8, 11–15, 18–21 and 25–29 April and on 2–3 May 2011, at which time the conciliation process ended unsuccessfully.
14. 295. Thereafter, the Minister of Labour appointed a mediator on 5 May, so that the parties could continue their discussion in an attempt to reach an agreement. The mediator met with the parties every day from 5 to 31 May 2011. Many offers and counter offers were exchanged during the negotiations, 11 in total (on 15 May 2011, the employer presented an initial offer; on 17 May the employer presented an offer of settlement to the union; on 22 May the union presented an offer of settlement to the employer; on 24 May the employer rejected the union’s offer and presented a new offer; on 30 May, the union presented a global offer to the employer; after rejecting the union’s global offer, the employer made subsequent offers on 1, 6 and 9 June; subsequent offers were made by the union on 3 and 9 June; the last offer submitted by the parties was submitted by the union on 16 June 2011).
15. 296. Despite the Government’s extensive efforts to assist the parties in resolving their dispute, the parties still did not settle and remained far apart on a number of issues. On the issue of wages alone, the parties’ proposals were still 4 per cent apart. Since the beginning of the negotiations in October 2010, the parties had only managed to move off their positions by 1.7 per cent.
16. 297. On 25 May 2011, the parties had acquired the legal right to strike or lockout as per the Canada Labour Code. On 2 June, the union commenced strike action (by means of rotating strikes) despite the fact that the parties were still exchanging offers. The strikes started in Winnipeg and moved to various cities including Montreal and Toronto.
17. 298. The rotating strikes, resulting in the slowing of operations nationally, began to take their toll on vulnerable Canadians and businesses that rely on Canada Post. On 8 June 2011, Canada Post announced a reduction of mail delivery service to three days per week starting on 13 June. Two days later, on 15 June, Canada Post declared a national lockout. All mail processing plants and letter carrier depots operated by CUPW members were closed. In a video statement to employees, the CEO of Canada Post indicated that the lockout was declared to bring the issue to a head. According to the CEO, Canada Post had endured 12 days of rotating strikes and had lost CAD100 million in revenue, two-thirds of which was to go to labour costs such as employee benefits and pensions. The lockout was conducted in accordance with the Canada Labour Code Part 1, which provides for a lockout to occur without notice being given if a strike is in process as in this case.
18. 299. At this point, the Minister of Labour had met personally with the parties on various occasions. On 31 May 2011, she emphasized the importance of continuing mail delivery to the Canadian public, continued to offer the assistance of the department and urged the parties to come to a resolution of their dispute. The Minister met with the parties again on 1, 2 and 10 June. On 10 June, the Minister sought a suspension of all measures taken by the parties.
19. 300. In addition to the Minister attempting to assist directly, the Government conciliation and mediation officer had met with the parties extensively from February through to the end of May 2011, and almost daily in April and May, without success. By 15 June, including throughout the strike action, the parties had been bargaining for nine months and had received the assistance of a minister-appointed conciliation officer and mediator to no avail. The parties were still far apart on their wage proposals and there seemed little chance of a negotiated resolution in the absence of a lengthy, costly and significantly disruptive work stoppage. This impasse resulted in the Minister of Labour issuing a news release on 15 June informing the parties and the public that the Government decided it would intervene in the dispute if no agreement could be reached in the near future.
20. 301. On 20 June 2011, the Minister of Labour introduced Bill C-6, an Act to provide for the resumption and continuation of postal services (the Act). The Government mediator remained in contact with the parties and was available to assist them in their negotiations. The parties had five days between the introduction of the Bill and the Royal Assent to try and resolve their dispute. Assisted by the Minister of Labour and her officials, the parties continued discussions and negotiations with respect to the outstanding terms. The parties met with the Minister, the Director-General of FMCS and senior representatives of the official opposition in an effort to further clarify matters and to ascertain whether a comprehensive agreement could have been reached prior to the Bill being passed by the House of Commons. Unfortunately, the parties were unable to reach an agreement and it became evident that the dispute would not be resolved without the use of legislation. The House of Commons passed the legislation a few hours later and the Bill was sent to the Senate. The Act received Royal Assent on 26 June 2011 and came into force the following day. CUPW members progressively returned to work as of 27 June 2011.
21. 302. Furthermore, the Government finds it important to place the legislation in its proper economic and social context and, in particular, the fragile state of the Canadian and world economy arising from events in 2007–09. The global economy experienced a massive financial crisis that resulted in the most serious global recession since the Great Depression.
22. 303. The global recession negatively affected the Canadian economy. Real gross domestic product (GDP) fell 3.7 per cent in the fourth quarter of 2008 – marking the beginning of the recession in Canada – as weak foreign demand resulted in lower Canadian exports and deteriorating financial conditions and confidence led to an outright decline in consumer spending and business investment. Real GDP declined further by 5.4 per cent in the first quarter of 2009. In addition to the significant contraction in real economic activity, rapid and sharp declines in world energy and non-energy commodity prices reduced the average price of production in Canada as measured by the GDP price deflator, which declined by 11 per cent in the fourth quarter of 2008 and 6.5 per cent in the first quarter of 2009. GDP dropped by an unprecedented 14.4 per cent in the fourth quarter of 2008 and a further 11.5 per cent in the first quarter of 2009. In addition, as a result of job losses in the manufacturing sector (especially significant losses in the auto and auto parts manufacturing sectors) and a major slowdown in the construction sector, the unemployment rate rose to 8.4 per cent in May 2009, its highest level in 11 years.
23. 304. Consistent with the direction of the ILO Director-General of 10 October 2008, recommending intervention to avoid an international financial crisis that would have grave consequences for enterprises, workers and families around the world, the Government reports that it mobilized all of its resources and engaged with all of its partners –internationally and within Canada – to put in place an unprecedented economic stimulus package (CAD62 billion). Canada’s Economic Action Plan, tabled on 27 January 2009, was the Government’s response to the deepest global recession in generations. The goal of the Economic Action Plan was to: (i) provide Canadians with significant, permanent personal income tax relief and Canadian businesses with the lowest overall tax rate on new business investment among the major industrialized economies; (ii) help the unemployed through enhanced employment insurance and training programs; (iii) avoid layoffs by enhancing the employment insurance work-sharing program; (iv) create jobs through a massive injection of infrastructure spending; (v) help create the economy of tomorrow by improving infrastructure at colleges and universities and supporting research and technology; (vi) support industries and communities most affected by the global downturn; and (vii) improve access to and affordability of financing for Canadian households and businesses.
24. 305. Although Canada’s economy has performed relatively well in comparison with other industrialized countries, the effects of the 2007–09 financial crisis have not disappeared. As a trading economy, the expected recovery in Canada is highly dependent on a sustained recovery in the global economy, in particular the recovery of the United States. Advanced economies such as Canada are expected to grow at only 2.5 per cent.
25. 306. The Government states that the economic situation at the time of the work stoppage was therefore still very concerning, and cites sources according to which neither GDP nor employment growth has yet recuperated the ground lost during the 2008–09 downturn (less than one fifth of the damage done by the recession has been repaired).
26. 307. Therefore, the Government of Canada had to be very careful to balance the statutory right of the parties to be in a legal strike and lockout position against the fragile economic state of the country and the impact on the Canadian public. It had been estimated that a work stoppage at Canada Post in 2011 would have resulted in losses to the Canadian economy of between CAD9 million and CAD31 million per week, and that operating costs for small and medium-sized businesses (6.8 million employees or 64 per cent of private sector employees) increased by CAD250 a day due to lost revenue and the need to find other ways to ship and deliver product.
27. 308. Given the economic recovery that the Government of Canada is attempting to promote and foster through the development of policy and legislative responses, the Government believes that its actions in introducing legislation were an appropriate and reasonable response to the labour standstill, thereby addressing not only the dispute between CUPW and Canada Post but also the economic realities and hurdles facing Canadians.
28. 309. As regards the impact of the work stoppage on Canada Post, the Government indicates that Canada Post has international obligations regarding the transmission of mail in Canada, since only a national service can discharge Canada’s international treaty obligation to meet the postal service standards established by the Universal Postal Union (UPU).
29. 310. Furthermore, according to the Canada Post Corporation Act, Canada Post has a universal service obligation (USO), which lies at the heart of the postal endeavour in Canada and is implicit in the Government’s ongoing commitment to a postal Crown corporation. Canada Post is required to be financially self-sufficient and to pay out annual dividends, while fulfilling its USO obligations. Canada Post does not receive government appropriations to support its USO commitments. It must rely on the net income it generates from its operations to support its ongoing operations and to finance necessary investments. If Canada Post is unable to generate and access the necessary funds over the long term, its ability to consistently deliver on its USO will become increasingly threatened. Moreover, Canada Post has embarked on a modernization initiative to replace obsolete and outdated equipment. It has already borrowed CAD1 billion to finance the initiative. If Canada Post’s financial situation is endangered by financial losses brought on by a work stoppage, it could affect its ability to repay the loan and pursue its postal transformation initiative.
30. 311. Canada Post spends around CAD3 billion annually on goods and services, thereby supporting an additional 30,000 jobs in the Canadian economy. It supports more than 100,000 direct and indirect jobs and contributes CAD6.6 billion to the country’s GDP. Prior to the work stoppage, Canada Post estimated that a work stoppage would cost the corporation CAD100 million per week and feared that customers could make a permanent choice to use alternative electronic delivery mechanisms. Although the full extent of the effect of the June 2011 work stoppage is not yet known, Canada Post estimated for 2011 that the labour disruption caused an immediate financial and competitive impact of CAD200 million or more.
31. 312. The Government then describes the impact of the work stoppage on vulnerable Canadians. The Government refers to statistics according to which, in 2010, seniors aged 65 years and over accounted for 14.1 per cent of the Canadian population (more than 4,800,000 people), and approximately 60 per cent of these seniors do not use the internet and therefore rely on the postal service for the delivery of some critical items. The postal service is also a vital link for people with disabilities who depend upon disability-related supports, as well as residents in rural and remote areas. Shopping online and catalogue shopping are alternatives that people with disabilities and rural residents use to purchase necessities, thus relying on the postal service for delivery of these goods. In addition, Canada Post provides free mailing of materials to the visually impaired (for example, audio books). This population is therefore greatly affected by any disruption to the postal services.
32. 313. Federal, provincial and territorial governments rely on mail services to deliver social benefit cheques such as the child tax benefit to low income families. The Federal Government mails approximately 32,054,000 cheques annually for the Employment Insurance and Canada Pension Plan programmes alone. Provincial and territorial governments also distribute social assistance (welfare) and disability benefit cheques by mail. As the strike and the lockout measures were taken, it was reported that the agreement reached between Canada Post and CUPW on the delivery of pension and social assistance cheques was not respected in some regions of the country.
33. 314. Alternatives to Canada Post services exist for most citizens, for example, using electronic mail or accessing private delivery companies. These companies rely, however, on services provided by Canada Post to deliver packages to remote rural and isolated areas. Yet, during the lockout, no mail was being sorted and transferred from the plants to the rural post offices, which included private delivery shipments. This resulted in an almost complete halt of all postal services across Canada, even though the rural letter carriers were not part of the Canada Post–CUPW collective bargaining dispute. There was therefore no alternative to receive packages such as prescribed medication, eyeglasses, dentures or any legal documents requiring signatures for the population residing in those regions.
34. 315. It is clear that the health and safety of a segment of the Canadian population was in jeopardy. The agreement to deliver social assistance cheques was not being fully respected in all regions, resulting in some Canadians being unable to afford the basic necessities of life. Furthermore, other Canadians were not receiving necessary prescription drugs on which they rely. The Minister of Labour received approximately 19,000 pieces of correspondence on the work stoppage. A large proportion of those were citizens, Canada Post employees, charities and corporations requesting that the Government intervene to end the work stoppage. The union exercised its right to strike and subsequently the employer locked out its employees. The impact of the work stoppage was too significant on the fragile Canadian economic recovery and on the Canadian population, in particular Canada’s vulnerable population, to allow the stoppage to continue indefinitely.
35. 316. It is the Government’s position that a collective agreement resulting from a process of free collective bargaining is the preferred manner to solve disputes. However, when that process fails and the parties are unable to agree and resort to a strike or lockout that can have a significant impact on the national economy or the public interest, the right of employers and unions to sort out their differences through strikes and lockouts must be weighed against the public interest. The Government of Canada believes that the legislative intervention was necessary in view of the difficult economic situation and that the measures taken were compatible with the principles established by the ILO.
36. 317. The Act was the last resort taken after all other avenues were exhausted. In responding legislatively to this very unique situation involving these parties, the Government extended the validity of the previous collective agreement to ensure that Canada Post and the union were regulated by the last negotiated collective agreement. Thus, the workers were protected, including access to the grievance and arbitration procedures.
37. 318. With reference to Case No. 2821, the Government suggests that the Committee recognized that if, for compelling reasons of national economic interest and as part of its stabilization policy, a government considers that wage rates cannot be settled freely through collective bargaining, such a restriction should be imposed as an exceptional measure and only to the extent that it is necessary, without exceeding a reasonable period, and it should be accompanied by adequate safeguards to protect the living standards of the workers. In the Government’s view, the legislative intervention was time limited to the 2010 round of collective bargaining, was tailored and targeted to these two parties and to the specific circumstances which led to an impasse between them exclusively, and safeguarded the living standards of workers by imposing a ceiling on wage increases rather than freezing wages or cutting jobs (the CUPW members benefited from a wage rate increase that was above the rate of inflation for the period).
38. 319. The arbitration process was chosen as the preferred alternative to the unsuccessful collective bargaining as this process is commonly used for resolving impasses in collective bargaining and is a process that has proven successful in the past. The Act provides that the arbitration process should be based on final offer selection. Final offer selection encourages the parties to be reasonable in their submissions before an arbitrator and ensures that a decision on the dispute is rendered. The Government also provided guiding principles to assist the arbitrator in the decision-making process and to establish a process that is transparent and known to both Canada Post and CUPW.
39. 320. The Government in enacting the Act was careful to ensure that the parties would be given the opportunity to resume their collective bargaining and reach a mutually acceptable collective agreement. The Act therefore prescribes that should the parties arrive at a negotiated collective agreement before the arbitrator renders a decision, the negotiated agreement will govern. As of 19 July 2012, the employers tabled a new proposal with the union. On 24 August 2012, the union reported that both sides agreed to hold discussions. The Government continued to encourage the parties to negotiate and conclude a collective agreement. In its communications dated 23 and 31 January 2013, the Government informs that, on 20 December 2012, the membership of the CUPW ratified the new collective agreements concluded with Canada Post for both the Urban Postal Operations workers and the Rural and Suburban Mail Carriers. The new collective agreements entered into force on 21 December 2012 and are in effect until 2016. The arbitrator’s duties under the Act ceased as of the day on which the new collective agreements were entered into.
40. 321. In conclusion, the Government reiterates its commitment to the ILO principles of freedom of association and the right to collective bargaining. It underlines that it has extensively supported and assisted the parties in their collective bargaining within the solid legislative framework of Part 1 of the Canada Labour Code including: the services of a conciliation and mediation officer who met with the parties extensively more than 100 times, including almost every day for the months of April and May 2011; personal interventions and attempts by the Minister of Labour herself to facilitate the conclusion of a negotiated agreement between Canada Post and CUPW. The Government of Canada clearly wanted to give priority to collective bargaining by consulting with CUPW and Canada Post.
41. 322. Over the past four years, 94 per cent of all collective bargaining processes that involved government-appointed conciliation and/or mediation were successful in concluding a collective agreement without a work stoppage. The Government does not take back-to-work legislation lightly and relied exceptionally on this measure four times in the past 12 years. Over the same time period, 34 legal lockouts and 122 legal strikes occurred in the federal jurisdiction.
42. 323. The Government renewed its commitment to the principle of extending its support to labour and management in their cooperative efforts to develop good relations and constructive collective bargaining practices, by expanding the delivery of the preventive mediation services. First, with an investment of CAD1 million over two years through the budget 2011 and then by making the investment ongoing as part of the Appropriation Act. With this new investment, more employers and unions will benefit from this voluntary service.
43. 324. The preventive mediation services offer a range of services to help improve ongoing relationships and keep the lines of communication open between employers and unions. This is achieved by training workshops on moving from adversarial to collaborative relationships, collective bargaining and joint conflict resolution. Preventive mediation services offer opportunities to employers and unions to help them prevent or improve unhealthy labour relations that can result in work stoppages. They are delivered jointly to employers and unions by mediators with extensive experience in both traditional and alternative approaches to labour relations. These services are free and can be customized to meet the specific needs of a particular workplace.
44. 325. Preventive mediation services have been delivered to Canada Post in the past and remain available to the Crown corporation and its employees represented by CUPW. The Government is cognisant that the parties are presently focusing their efforts on the arbitration process and will contact them to offer preventive mediation services at an appropriate time. The Government will then be in a position to offer a diagnostic of the parties’ needs and present them with a plan to improve their relationship.
45. 326. The Government strongly believes that all parties involved in collective bargaining should and must have the opportunity to settle their disputes in a consensual way and does not undertake back-to-work legislation lightly and only in exceptional circumstances. The Government remains firmly committed to the process of free collective bargaining as the best method for arriving at a collective agreement. In fact, the vast majority of collective agreements in the federal jurisdiction are renewed through free collective bargaining. For example, in 2011, approximately 407 collective bargaining negotiations took place in federally regulated workplaces and in most of these cases, the parties were able to conclude their negotiations and reach an agreement. The only legislation required to solve a labour dispute in 2011 was the Bill C-6, an Act to provide for the resumption and continuation of postal services.
46. 327. After a complete breakdown in negotiations and the failure of the parties to reach an agreement, the Government could no longer allow the severe consequences caused by this work stoppage to continue to affect its economy and Canadian citizens, including Canada’s most vulnerable populations. Faced with a choice of accepting a lengthy work stoppage with significant negative effects on the fragile domestic economic recovery and on vulnerable Canadians, the Government chose a reasoned, measured and time-limited response that provides the parties with the opportunity to make submissions before an independent arbitrator. Bill C-6 provides for the extension of the protection of the previously negotiated collective agreement. It is drafted in a manner that respects the process of collective bargaining. Bill C-6 does not preclude the employer and the union from entering into a new collective agreement prior to the arbitrator’s decision. Eighteen months after the passage of Bill C-6, the parties have finally concluded and signed a new collective agreement.
47. 328. Given the extraordinary nature of the circumstances between the two parties, the Government respectfully requests that the complaint be dismissed.

C. The Committee’s conclusions

1. 329. The Committee notes that, in the present case, the complainant organization alleges that by enacting the Act to provide for the resumption and continuation of postal services (Bill C-6), which terminated the strike, the Federal Government interrupted collective bargaining between the CUPW–STTP and the Canada Post Corporation and referred the dispute to compulsory and binding arbitration, thereby violating the right to freedom of association and setting a dangerous precedent of government intervention in labour disputes that do not involve essential services.
2. 330. The Committee notes that, in the complainant’s view, the Government of Canada violated Convention No. 87 through the passage of Bill C-6, which has impeded postal workers employed by Canada Post Corporation and represented by the CUPW–STTP from engaging in free collective bargaining and exercising their right to strike, by imposing compulsory final offer selection arbitration and terminating the strike, whereas the parties had arrived at essential service protocols. In particular, the Committee notes the complainant’s indication that Bill C-6: (i) restores the expired collective agreement until a new agreement has been determined; (ii) imposes by law wage increases that fall significantly below the employer’s last offer, which, according to the complainant, represents a theft of CAD35 million from postal workers and their families; and (iii) provides that the new collective agreement will be decided by a government-appointed arbitrator via final offer selection (each party will submit a draft collective agreement and the arbitrator chooses one in its entirety).
3. 331. The Committee notes the brief chronology provided by the complainant organization, in particular the following events: the union and the enterprise began bargaining for the Urban Operations Collective Agreement on or about 21 October 2010. The union applied for conciliation on 21 January 2011. The collective agreement expired on 31 January. On 11 April, the union announced a 94.5 per cent strike vote. Conciliation was extended to 3 May, and mediation commenced on 4 May. The union served strike notice on 30 May. On the same day, the enterprise announced that the Urban Operations Collective Agreement was not in effect, and that coverage under the dental, hearing and vision, and extended health care plans was immediately stopped. The enterprise also began immediately laying off temporary employees. The union embarked on rotating strike action at 11.59 p.m. On 10 June, the union publicly offered to return to work if the enterprise would reinstate the recently expired collective agreement but the enterprise refused. On 14 June, approximately 11.30 p.m., the enterprise announced a nationwide lockout, and workers in post offices across the country were escorted out of the workplace by the management. Union members commenced picketing all locations where Urban Operations bargaining unit members were working when the lockout was imposed. On 15 June 2011 in the morning, the Minister of Labour stated she had received very few complaints about the labour dispute. In the afternoon, she announced she would be bringing in back-to-work legislation. The union continued to meet with the management and the mediator in an effort to achieve a new Urban Operations Collective Agreement. On 20 June, the Government introduced Bill C-6 into Parliament. The union continued to make extensive efforts to resolve the dispute. Bill C-6 was passed by the House of Parliament and by the Senate on 25 and 26 June. Union members began returning to work on 27 June 2011 in the afternoon.
4. 332. The Committee notes that the Government respectfully disagrees with the complainant’s allegations and requests that the complaint be dismissed. It notes the Government’s general statement that: (i) Canada Post, a Crown corporation subject to the federal industrial relations legislation, is an essential lifeline to seniors or disabled citizens and persons who live in rural and remote areas for the delivery of necessities and critical items, such as prescription drugs and welfare, pension or other social benefit or government assistance cheques mailed by federal, provincial and territorial governments; (ii) Canada Post and CUPW have a long history of acrimonious collective bargaining that has often resulted in work stoppages; (iii) the economic situation at the time of the work stoppage was very concerning, since the effects of the global economic and financial crisis had not yet disappeared; and (iv) the Government renews its commitment to uphold ILO principles of freedom of association and the right to collective bargaining.
5. 333. The Committee further notes the overview provided by the Government of the history of the 2011 round of negotiations between Canada Post and CUPW, in particular the following: in October 2010, the parties started bargaining in direct negotiations toward the renewal of the collective agreement (set to expire on 31 January 2011). After reaching an impasse, a notice of dispute was received on 21 January 2011. On 31 January, the Minister of Labour appointed a conciliation officer who met with the parties on 2, 9, 10, 22–25 and 28 February 2011, and every day from 1 to 15, 21–24 and 28–31 March 2011. On 11 March, Canada Post and CUPW signed the Agreement on Processing and Delivery of Government Cheques in the Event of an Interruption of Postal Service Resulting from a Strike or Lockout (attached to the complaint). On 18 April, CUPW announced that 94.5 per cent of its membership voted in favour of a strike mandate. The conciliation process scheduled to end on 31 March 2011, was extended by the Minister of Labour to 3 May. The conciliation officer again met extensively with the parties on 1, 4–8, 11–15, 18–21 and 25–29 April and on 2–3 May 2011, at which time the conciliation process ended unsuccessfully. Thereafter, the Minister of Labour appointed a mediator on 5 May, who met with the parties every day from 5 to 31 May 2011. Many offers and counter offers were exchanged during the negotiations, 11 in total. The parties remained far apart on a number of issues. On 2 June, the union commenced strike action by means of rotating strikes in various cities, which began to take their toll on vulnerable Canadians and businesses that rely on Canada Post. On 15 June, Canada Post declared a national lockout in accordance with the Canada Labour Code. At this point, the Minister of Labour had met personally with the parties on various occasions (on 31 May, and on 1, 2 and 10 June 2011). On 20 June, the Minister of Labour introduced Bill C-6, an Act to provide for the resumption and continuation of postal services. The parties had five days between the introduction of the Bill and the Royal Assent to try and resolve their dispute. Assisted by the government mediator, the parties met with the Minister of Labour, the Director-General of FMCS and other senior officials and continued discussions and negotiations with respect to the outstanding terms. Unfortunately, the parties were unable to reach an agreement. The House of Commons passed the legislation a few hours later and the Bill was sent to the Senate. The Act received Royal Assent on 26 June 2011, and came into force the following day. CUPW members progressively returned to work as of 27 June 2011.
6. 334. The Committee further notes the Government’s explanations that: (i) it remains firmly committed to the process of free collective bargaining as the best method for arriving at a collective agreement and does not undertake back-to-work legislation lightly and only in exceptional circumstances; however, by 15 June, including throughout the strike action, the parties had been bargaining for nine months, had received the assistance of a minister-appointed conciliation officer and mediator to no avail, and were still far apart on their wage proposals; the Act was the last resort taken after all other avenues were exhausted; (ii) it had been estimated that a work stoppage at Canada Post in 2011 would have resulted in losses to the Canadian economy of between CAD9 million and CAD31 million per week; (iii) although the full extent of the effect of the June 2011 work stoppage is not yet known, Canada Post estimated for 2011 that the labour disruption caused an immediate financial and competitive impact of CAD200 million or more; (iv) the impact of the work stoppage on vulnerable persons, such as seniors, people with disabilities, residents in rural and remote areas and low-income families was also significant. During the lockout, no mail was being sorted and transferred from the plants to the rural post offices, so that there was no longer any alternative to Canada Post in the form of private delivery companies to receive critical packages such as prescribed medication, eyeglasses, dentures, legal documents requiring signatures for the population residing in those regions etc. As the strike and the lockout measures were taken, it was reported that the agreement reached between Canada Post and CUPW on the delivery of pension and social assistance cheques was not respected in some regions of the country, resulting in some Canadians being unable to afford the basic necessities of life. It is clear that the health and safety of a segment of the Canadian population was in jeopardy; (v) the legislative intervention, which extended the validity of the previously negotiated collective agreement to ensure that workers were protected (including access to the grievance and arbitration procedures), was time limited to the 2010 round of collective bargaining, was tailored to these two parties and to the specific circumstances which led to an impasse between them exclusively, and safeguarded the living standards of workers by imposing a ceiling on wage increases rather than freezing wages (the CUPW members benefited from a wage rate increase that was above the rate of inflation for the period); and (vi) the Act prescribes that should the parties arrive at a negotiated collective agreement before the arbitrator renders a decision, the negotiated agreement will govern, so as to ensure that the parties would be given the opportunity to resume their collective bargaining and reach a mutually acceptable collective agreement; 18 months after the enactment of the Act in 2011, the parties have reached two collective agreements. The Committee also notes the Government’s indication that the Government will contact the parties to offer its recently expanded preventive mediation services at an appropriate time, then being in a position to offer a diagnostic of the parties’ needs and present them with a plan to improve their relationship.
7. 335. As regards the effect of Bill C-6 of ordering the postal workers back to work and thus terminating the ongoing strike action, the Committee is bound to recall that it has always recognized the right to strike by workers and their organizations as a legitimate means of defending their economic and social interests, and that the right to strike may be restricted or prohibited: (1) in the public service only for public servants exercising authority in the name of the State; or (2) in essential services in the strict sense of the term, that is, services the interruption of which would endanger the life, personal safety or health of the whole or part of the population [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, paras 521 and 576]. In this regard, the Committee reiterates that it has always considered that postal services do not constitute essential services in the strict sense of the term.
8. 336. In addition, the Committee has been asked on previous occasions to examine complaints concerning the compulsory continuation of postal services to the detriment of the legitimate exercise of the right to strike. On these occasions, both of which involve cases concerning Canada, the Committee has concluded that it was difficult to concede that such stoppages were likely to result in consequences characteristic of essential services in the strict sense of the term [see Case No. 1451 (Canada), 268th Report, para. 98; and Case No. 1985 (Canada), 316th Report, para. 321]. While it has always been sensitive to the fact that a prolonged interruption in postal services can affect third parties who have no connection with the dispute, for instance it may have serious repercussions for companies or directly affect individuals (especially recipients of unemployment benefits or social assistance and elderly people who depend on their pension payments), the Committee has nonetheless considered that whatever the case may be, and however unfortunate such consequences are, they do not justify a restriction of the fundamental rights of freedom of association, unless they become so serious as to endanger the life, safety or health of part or all of the population [see Case No. 1985 (Canada), 316th Report, para. 322].
9. 337. The Committee takes note with concern of the negative effects on third parties described by the Government, such as senior or disabled recipients of prescribed medication and other necessities living in remote or rural areas. To address this issue, the Committee had suggested, in a previous case, that the Government examine the possibility of introducing a minimum service in agreement with the trade union concerned [see Case No. 1985 (Canada), 316th Report, para. 324]. The Committee welcomes the steps that had since been taken to adopt a minimum service protocol agreed upon by the parties via a protocol developed by the union and provincial, federal and territorial governments to allow for the processing and distribution of socio-economic cheques (a matter that had been at issue in the previous case). Given that the minimum service protocol was negotiated by the government-owned Canada Post and the union precisely in order to avoid negative repercussions for third parties and ensure that the basic needs of vulnerable users would be met in the event of a strike, the Committee expresses its concern at the Government’s decision to issue a full back-to-work order rather than having, in a more restricted manner, taken the necessary measures to ensure the full respect of the minimum service protocol.
10. 338. The Committee notes in this regard the complainant’s contention that it complied with the protocol. The Government, in its reply, states that it was reported that the agreement reached between Canada Post and CUPW regarding the delivery of pension and social assistance cheques was not respected in some regions of the country, without going into any detail or indicating how the protocol may have been violated. The Committee observes that the strike action was followed by a full lockout. Observing that the full and extensive lockout, which involved the closure of all mail processing and letter carrier entities, will have rendered respect for the minimum service protocol impossible, the Committee recalling that the right to strike is one of the essential means through which workers and their organizations may promote and defend their economic and social interests, considers that the Government should have limited its intervention to guaranteeing compliance with the negotiated minimum services.
11. 339. Concerning the Government’s indication that, in the wake of the global economic and financial crisis, both the still fragile Canadian economy in general and Canada Post in particular, have incurred significant losses during the work stoppage, the Committee has previously pointed out that economic considerations should not be invoked as a justification for restrictions on the right to strike; however, when a service that is not essential in the strict sense of the term but is part of a very important sector in the country is brought to a standstill, once again, measures to guarantee a minimum service may be justified [see Case No. 2841, 362nd Report, para. 1041]. In light of the above, the Committee once again requests the Government to make every effort in the future to avoid having recourse to back-to-work legislation in the postal sector and to limit its interventions to ensuring the observance of any agreed minimum service protocol.
12. 340. As regards the effect of Bill C-6 of imposing a government-appointed arbitrator who is to decide on the new collective agreement via final offer selection, the Committee first wishes to acknowledge the extensive efforts made by the Government to support and assist the parties in the settlement of the dispute, including the provision of the services of a government-appointed conciliation officer and a government-appointed mediator who met with the parties extensively more than 100 times (almost every day for the months of April and May 2011) and the personal interventions and attempts by the Minister of Labour to facilitate the conclusion of a negotiated agreement. Other than cases involving essential services, the Committee recalls that compulsory arbitration to end a collective labour dispute and a strike is only acceptable if it is at the request of both parties involved in a dispute, or if the strike in question may be restricted, even banned, that is, in the case of disputes in the public service involving public servants exercising authority in the name of the State or in essential services in the strict sense of the term that is, services, the interruption of which, would endanger the life, personal safety or health of the whole or part of the population. It considers that a system of compulsory arbitration through the labour authorities, if a dispute is not settled by other means, can result in a considerable restriction of the right of workers’ organizations to organize their activities and may even involve an absolute prohibition of strikes, contrary to the principles of freedom of association. Moreover, the Committee stresses that provisions which establish that, failing agreement between the parties, the points at issue in collective bargaining must be settled by the arbitration of the authority are not in conformity with the principle of voluntary negotiation [see Digest, op. cit., paras 564, 568 and 993].
13. 341. The Committee understands that the legislatively imposed arbitration procedure has been delayed since both appointments of the arbitrator by the Government have been overturned by the Federal Court in published decisions of 27 January 2012 for reasons of insufficient qualifications and 8 August 2012 for concerns related to impartiality. In this regard, the Committee wishes to recall that, in mediation and arbitration proceedings, it is essential that all the members of the bodies entrusted with such functions should not only be strictly impartial but, if the confidence of both sides, on which the successful outcome even of compulsory arbitration really depends, is to be gained and maintained, they should also appear to be impartial both to the employers and to the workers concerned [see Digest, op. cit., para. 598]. The Committee suggests that the Government and the social partners give consideration to discussing a list of arbitrators that have the confidence of the parties in the event that arbitration is sought by the parties in the future.
14. 342. Furthermore, the Committee appreciates that, as highlighted by the Government, section 13(1) of the Act provides that nothing in the Act precludes the employer and the union from entering into a new collective agreement at any time before the arbitrator makes a decision, and that the arbitrator’s duties under the Act cease as of the day on which the new collective agreement is entered into. The Committee also wishes to acknowledge the commitment of the Government to the process of collective bargaining as the best method for arriving at a collective agreement, as well as the will and efforts of the Government following the adoption of the Act to encourage the parties to resume negotiations and reach a mutually acceptable collective agreement prior to the final offer selection. While regretting that the Government has felt compelled to have recourse to compulsory arbitration in the dispute in question, which could have curtailed the right to collective bargaining as a means of regulating employment conditions in a non-essential service, the Committee notes that, in the meantime, after intensive negotiations between the parties from August to October 2012, two new collective agreements have been concluded and signed on 20 December 2012 (for the Urban Postal Operations and for the Rural and Suburban Mail Carriers). The Committee notes this development, but remains nonetheless firmly convinced that it would be more conducive to a harmonious industrial relations climate if the Government would avoid, in the future, having recourse to such legislative intervention and rather promote truly free and voluntary collective bargaining, which does not take place under the threat of a contract being imposed under the final offer selection process of a compulsory arbitration procedure, and encourage submitting labour disputes to impartial and independent arbitration which could resolve them to the satisfaction of the parties concerned.
15. 343. As regards the effect of Bill C-6 of legislatively imposing terms and conditions of employment (wage increases), an effect that remains relevant despite the conclusion of collective agreements between the parties (section 13(3) of the Act), the Committee takes due note of the Government’s indication that the legislative intervention became necessary due to the still concerning state of the Canadian economy at the time of the events which had hardly recuperated from the recession triggered by the global economic and financial crisis. The Committee has previously considered that if, as part of its stabilization policy, a government considers that wage rates cannot be settled freely through collective bargaining, such a restriction should be imposed as an exceptional measure and only to the extent that is necessary, without exceeding a reasonable period, and it should be accompanied by adequate safeguards to protect workers’ living standards [see Digest, op. cit., para. 1024]. Moreover, while the facts of each case need to be considered, it has always emphasized that a three-year period of limited collective bargaining on remuneration within the context of a policy of economic stabilization constitutes a substantial restriction, and the legislation in question should cease producing effects at the latest at the dates mentioned in the Act, or indeed earlier if the fiscal and economic situation improves [see Digest, op. cit., para. 1025]. In addition, having considered in the past a restriction on collective bargaining lasting three years and nine months to be excessive [see 330th Report, Case No. 2166, para. 293], the Committee notes that, in the present case, wage increases allegedly below the employer’s last bargaining offer but above the relevant inflation rate have been legislated by the Act for 2011, 2012, 2013 and 2014. While noting that the Act attempts to safeguard the workers’ living standards, the Committee considers that wage increases imposed by law for a four-year period in this case excessively restrict collective bargaining on remuneration and thus limit the autonomy of the bargaining parties. The Committee therefore urges the Government to promote collective bargaining between the parties on the wage increases unilaterally imposed through the legislation, if necessary with the assistance of voluntary conciliation or arbitration under the authority of persons that have the confidence of the parties concerned. The Committee requests to be kept informed of developments in this respect.
16. 344. More generally, the Committee welcomes the indication that the Government has expanded its preventive mediation services, and the Government’s pledge to contact the parties to offer these services at an appropriate time, together with a diagnostic of the parties’ needs and a plan to improve their relationship, and trusts that these measures aiming at the general promotion of collective bargaining between the parties will be taken in the near future. The Committee requests to be kept informed of developments in this respect.