Definitive Report - Report No 374, March 2015

1. 724. The complaint is contained in a communication of the Single Confederation of Workers of Peru (CUT–Peru) dated 14 January 2013. This organization submitted additional information and new allegations in a communication dated 9 December 2013. The International Trade Union Confederation (ITUC) associated itself with the complaint of CUT–Peru in a communication dated 19 December 2013.
2. 725. The Government sent its observations in communications dated 17 May 2013, and 17 May, 5 and 10 June 2014.
3. 726. Peru has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), and the Labour Relations (Public Service) Convention, 1978 (No. 151).

A. The complainants’ allegations

1. 727. In its communication of 19 December 2013, CUT–Peru, which includes among its members the Trade Union of Workers of Telefónica del Perú (SITENTEL), alleges that all the lists of demands presented by SITENTEL at the branch level since 2007 were rejected by the enterprises of the Telefónica group in Peru and its subcontractors through various forms of opposition that they initiated. In the cases where, following lengthy administrative proceedings, the Ministry of Labour issued rulings stating that SITENTEL was justified in entering into collective bargaining, the enterprises of the group in Peru and its subcontractors resorted to various delaying tactics such as appeals for review and amparo proceedings (for the protection of constitutional rights), to avoid entering into collective bargaining or, where it was not possible to delay it any longer, to avoid reaching any conclusion. To date, no collective bargaining process, either with subsidiaries or with subcontractors, has resulted in the signing of a collective agreement. It is therefore clear that the enterprises of the group in Peru have no interest in pursuing collective bargaining.
2. 728. The administrative and judicial appeals that group enterprises in Peru have lodged do not recognize the bargaining capacity of SITENTEL, ignoring section 47 of Supreme Decree No. 10-2003-TR approving the Single Consolidated Text of Peru’s Industrial Relations Act, which provides that “the respective union” will have the capacity for representation in the collective agreements of enterprises, which is not necessarily the enterprise union.
3. 729. CUT–Peru states that the different enterprises of the group in Peru have not recognized the representative capacity of SITENTEL. The workers of those enterprises have indicated – in their respective general assemblies – that they wish SITENTEL to represent them in collective bargaining with the subcontractor and subsidiary enterprises. In any event, the Ministry of Labour has recognized that SITENTEL is sufficiently representative to bargain at the enterprise level.
4. 730. In the cases where the administrative and/or judicial authorities have recognized the right of their trade unions to enter into bargaining and have accordingly ordered the creation of bargaining committees, the enterprises of the group in Peru have not made the necessary efforts to engage in any real or constructive bargaining, let alone to reach an agreement. In short, they have failed to abide by the principle of bargaining in good faith.
5. 731. CUT–Peru points out that the enterprises of the group in Peru are leaders in the telecommunications sector, holding a solid position in the Peruvian market and with continued growth. The enterprises in question are: Telefónica del Perú SAA, Teleatento del Perú SAC, Telefónica Gestión de Servicios Compartidos Perú SAC, Media Networks Latin America SAC, Terra Networks Peru SA, and their various subsidiaries. These enterprises also have close economic and administrative ties with a number of “partner” enterprises, which provide services for the various subsidiaries in the group.
6. 732. CUT–Peru explains that the decision not to include the “subcontracting” enterprises of the group in Peru in collective bargaining at branch level is based on the subordinate administrative and employment relationship that these enterprises have with one of the main enterprises of the group in Peru, Telefónica del Perú SAA. Paradoxically, the group has undertaken to safeguard fundamental labour principles in the enterprises with which it signs labour or service contracts. This commitment is included in the UNI–Telefónica code of conduct, signed on 17 December 2007, and in the corporation’s guiding principles.
7. 733. Throughout its structure, the conduct of the business group contravenes respect for freedom of association and the right to collective bargaining, denying the bargaining capacity of SITENTEL and failing to comply with the rulings of the Administrative Labour Authority, which declare that the aforementioned unions are entitled to bargain with local enterprises.
8. 734. In the cases where collective bargaining has been initiated under the mandate of the Administrative Labour Authority, the enterprises of the group in Peru have not made the slightest effort to engage in constructive collective bargaining, let alone to enter into collective agreements. This is so much so that they refuse to submit to arbitration or conciliation, or to any of the alternative dispute resolution measures proposed by the aforementioned trade union organizations.
9. 735. Consequently, no collective agreements on working conditions have been signed since 2006, despite the existence of 25 current lists of demands, which has meant that, since then, the working conditions of SITENTEL members have not improved.
10. 736. CUT–Peru alleges labour law violations, job insecurity and anti-union practices, acts of harassment, unfair dismissals and threats of non-renewal of contracts for supporting the SITENTEL demand that the subcontractor and subsidiary companies comply with the Ministry of Labour rulings concerning ongoing negotiations, as proposed by SITENTEL (especially considering that the non-renewal of contracts seriously damages capacity of SITENTEL to bargain collectively by reducing its membership). Furthermore, CUT–Peru denounces a failure to enter into indefinite-term contracts with its members, in addition to other forms of precarious employment.
11. 737. A specific example is that of Telefónica del Perú and its subsidiaries and subcontractors, which carry out their activities following the productive decentralization model. Under this model, core activities are outsourced to other enterprises, diversifying the enterprise’s activities among subsidiaries and subcontractors, and thereby enabling it to avoid its labour obligations, for example with regard to the real amount of profit-related pay, and to prevent collective bargaining with the actual employer mentioned, which only agrees to enter into collective bargaining with a small number of its workers. This is evidently to the detriment of the workers and fails to comply with the principles of corporate social responsibility, which apply to all enterprises, especially transnational ones.
12. 738. CUT–Peru also denounces the lack of effective measures to guarantee union bargaining. National regulations mostly only provide for financial sanctions for enterprises that refuse to enter into collective bargaining, and there are no mechanisms to ensure an effective restitution of the right to collective bargaining. Furthermore, by law the fines imposed by the Administrative Labour Authority must not exceed 30 tax units. In 2013, the tax unit value was of 2,700 new soles (PEN). This amount might appear high for micro- and small enterprises, but is negligible for large enterprises. It is therefore much easier for them to pay the fine than to engage in collective bargaining, as in the case of Telefónica del Perú and its subsidiaries and subcontractors.
13. 739. In its communication of 9 December 2013, CUT–Peru states that, to date, no bargaining process with Telefónica subsidiaries or partners has resulted in the signing of a collective agreement because the enterprises of the Telefónica group in Peru are not interested in pursuing collective bargaining.
14. 740. CUT–Peru states that the main issue raised in this complaint is not new to the ILO Committee on Freedom of Association, given that on 2 December 2008 a complaint was submitted (Case No. 2689) that reported the refusal by group enterprises and their partners to enter into collective bargaining at branch level with the higher level organizations representing their workers.

B. The Government’s reply

1. 741. In its communications of May 2013 and 10 June 2014, the Government forwards the comments of the Telefónica group enterprises with regard to this complaint. These are as follows:
   • (a) Trade union activities within the Telefónica group are intensive and the group currently has nine trade union organizations (SITENTEL, FETRATEL, SITRATEL Centro, SITRATEL San Martín, the Single Union of Workers of Telefónica del Perú (SUTTP), the Trade Union of Employees of Telefónica del Perú (SETP), the Single Union of Workers of Telefónica Móviles (STTM) and the Single Union of Workers of Telefónica Serviciós Comerciales (SUTTSC)). These trade union organizations are recognized as representatives of their member workers and some of the group enterprises are currently engaged in collective bargaining with those trade union organizations, depending on the enterprise and the scope of the constitution and action of the organizations. In this context, trade union membership in Telefónica group enterprises is as follows: in Telefónica del Perú SAA, it is almost 80 per cent of employees, while in Telefónica Móviles SA it is less than 30 per cent; it is 33 per cent in Telefónica Servicios Comerciales; 6 per cent in Telefónica Gestión de Servicios Comerciales SAC; 11 per cent in Telefónica Centros de Cobro SAC, and 9 per cent in T-Gestiona Logística.
   • (b) There are currently ten collective agreements in force in the enterprises of the Telefónica group, signed with several of these trade union organizations. Without prejudice to collective agreements signed as a result of bargaining processes, Telefónica group enterprises have also reached agreements with a number of these trade union organizations in the wake of corporate restructuring, in order to ensure that the individual and collective rights of the workers involved in those processes are not affected.
   • (c) It is in this context that SITENTEL alleges that all the lists of demands that it has presented to Telefónica group enterprises since 2007 have been rejected. It should be noted that SITENTEL is a telecommunications sector trade union, and that the following Telefónica group telecommunications enterprises bargain with that trade union, by mutual consent, at the enterprise level: Telefónica del Perú (a Telefónica group enterprise providing land-line telephone services) and Telefónica Móviles (a Telefónica group enterprise providing mobile phone services), as indicated in the copies of the last collective agreements signed with that trade union. Furthermore, although it does not operate in the telecommunications sector, Telefónica Gestión de Servicios Compartidos (a Telefónica group enterprise providing administrative support services) is currently engaged in bargaining at the enterprise level with SITENTEL, voluntarily and under an agreement signed in 2001 with FETRATEL (for which SITENTEL was at the time the grass roots union). The above is established in the copy of the aforementioned agreement and of the last collective agreement signed by SITENTEL with Telefónica Gestion de Servicios Compartidos. The allegations that “to date, no bargaining process … has resulted in the signing of a collective agreement”, and that “the enterprises of the Telefónica group in Peru have no interest in pursuing collective bargaining” are therefore unfounded. Furthermore, the group enterprises bargain collectively with other trade union organizations, with which they have also signed collective agreements.
   • (d) Although it is true that two enterprises of the Telefónica group, Telefónica Servicios Comerciales (a Telefónica group enterprise providing goods and services) and Telefónica Centro de Cobros (a Telefónica group enterprise providing payment services) opposed collective bargaining with SITENTEL in 2011, they did so on objective and reasonable grounds: That they were not enterprises of the telecommunications sector, and that they did not hold an agreement to bargain at branch level. The dispute was settled by the Administrative Labour Authority to the satisfaction of those enterprises, as indicated in the administrative rulings that SITENTEL has attached to its allegations. It should be noted that, although SITENTEL could have brought an appeal against the rulings, it did not do so and they have therefore been upheld.
   • (e) Currently, contrary to the principle of free and voluntary bargaining, compulsory arbitration has been imposed on both enterprises, by the unilateral decision of SITENTEL, in order to determine the level of bargaining, in accordance with section 61-A of the regulations of the Industrial Relations Act, approved by Supreme Decree No. 014-2011-TR. This is now under way. It should also be specified that Telefónica Servicios Comerciales is engaged in collective bargaining with the trade union created in that enterprise, as indicated in the last negotiating record signed by the parties at the conciliation stage.
   • (f) A table is provided below setting out the status of collective relations between SITENTEL and Telefónica group enterprises.

     • Enterprise		TdP (Telefónica del Perú)		TM (Telefónica Móvil)		TSC (Telefónica Servicios Comerciales)		TGSC (Telefónica Gestión de Servicios Compartidos)		TCC (Telefónica Centro de Cobro)
       Total number of workers in the enterprise		2 747		2 890		298		2 043		323
       SITENTEL members in the enterprise		168		38		32		35		16
       Collective bargaining situation		Direct discussions		Direct discussions		Compulsory arbitration to determine the level of bargaining		Direct discussions		Compulsory arbitration to determine the level of bargaining

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   • (g) With respect to other allegations (SITENTEL states that its members have been harassed and charged with various breaches of the regulations of Telefónica group enterprises in order to terminate their employment relationship, and this has been linked to their exercise of freedom of association and their support of the demands made by SITENTEL; these dismissals are said to damage the capacity of SITENTEL to bargain collectively by reducing its membership), the enterprises claim that the allegations made by SITENTEL are false and are not supported by the evidence provided by SITENTEL. Although Telefónica del Perú dismissed six workers who were trade union members and it has been accused of anti-union actions on that count, the workers in question were members of the Single Union of Workers of Telefónica del Perú and their dismissal was in no way related to their trade union membership or to their exercise of freedom of association, but to serious acts of misconduct which, under labour legislation, establish a valid reason for dismissal. All those dismissal procedures have been challenged before the courts. One case has been resolved in favour of the enterprise and the other cases are still pending.
   • (h) As regards the allegations that the enterprise avoids entering into indefinite-term contracts with its workers and that the subcontractors of the Telefónica group fail to comply with their labour obligations, it should be noted that, under Peruvian labour law, temporary contracts are subject to compliance with the conditions established by the Act on Productivity and Labour Competitiveness, and that Telefónica group enterprises use temporary contracts when those conditions are met. Whenever workers employed by one of the enterprises in the group have considered that, in their case, the aforementioned conditions have not been met, they have challenged the validity of the temporary contract through administrative proceedings (inspections by the Ministry of Labour and Employment Promotion) or through the courts (in judicial proceedings).
   • (i) The proportion of workers under temporary contracts in the enterprises in which SITENTEL bargains collectively is as follows.

     • Enterprise	TdP (Telefónica del Perú)		TM (Telefónica Móvil)		TGSC (Telefónica Gestión de Servicios Compartidos)
       Total number of workers	2 747		2 890		2 043
       Number of workers under temporary contracts	45		134		1 546

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   • (j) Although in the particular case of Telefónica Gestión de Servicios Compartidos, workers under temporary contracts represent 75 per cent of total contracts, the reason for this proportion is that the enterprise provides administrative support services through specific services and the implementation of projects in various sectors of activity, and that specific services of limited duration is one of the cases in which the use of temporary contracts is permitted in Peru, under section 63 of the Act on Productivity and Labour Competitiveness. In view of the above, it should be noted that the Ministry of Labour has been particularly active in its inspection of Telefónica group enterprises, where approximately 200 inspections were carried out between 2012 and May 2014. The use of temporary contracts has been one of the areas monitored in Telefónica group enterprises.
   • (k) It is precisely in Telefónica Gestión de Servicios Compartidos, an enterprise with which SITENTEL engages in bargaining and which hires the highest number of workers on temporary contracts, that the Ministry of Labour recently carried out an inspection in this regard. In the inspection report, the inspectors concluded that the enterprise complied with the legislation concerning temporary employment contracts.
   • (l) Regarding the SINTENTEL allegations, the enterprise states that Telefónica group enterprises are under obligation to apply corporate policies when they enter into service or employment contracts with other enterprises to avoid such contracts being considered illegal transfers of workers. In particular, the corporate responsibility policy for supply chains (the policy) and Corporate Directive ICC-001 (the directive) provide guiding principles for the whole Telefónica group supply chain. As an example of the above, the policy defines the respect of freedom of association as a principle to be observed by subcontractors. Furthermore, one of the prerequisites established by the directive for entering into employment or service contracts for core activities is the provision of evidence that “the subcontractor not only has an apparent legal status, but that it is verified, effective and autonomous; in other words, that it has an independent management and structure, and that it is sufficiently financially solvent to meet all its obligations and, in particular, its labour law obligations”.
   • (m) Likewise, the directive indicates that subcontractors are responsible for meeting their wage, social security and occupational safety obligations in respect of their own staff; and it establishes mechanisms to monitor compliance with such obligations.
   • (n) The above indicates that subcontracting is not used by Telefónica group enterprises as a means of making jobs precarious, as SITENTEL has tried to argue through the allegations in its complaint. However, given that the subcontractors are autonomous in their managerial decisions, Telefónica group enterprises do not participate in the decisions of its subcontractors, and they are only informed of these through the monitoring of compliance with policies and directives and of the impact that this could have on the commercial relationship with its enterprises.

Collective bargaining 2001–12

1. 742. In its communication dated 17 May 2014, the Government declares that the 2011–12 collective bargaining process between SITENTEL and the subsidiary enterprises of Telefónica del Perú SA began on 27 October 2011, when SITENTEL proposed the establishment of collective bargaining at branch level concerning the provision of telecommunication services to the following Telefónica del Perú SA subsidiary enterprises: Teleatento Perú SAC, Telefónica Servicios Comerciales Perú SAC, Telefónica Centro de Cobros SAC. and Telefónica Móviles SA In its ruling No. 14-2012/MTPE/2/14, of 13 November 2012, the Labour Directorate dismissed the appeal for review lodged by Telefónica Servicios Comerciales Perú SAC against the regional directorate ruling confirming a ruling of the Regional Directorate for Labour and Employment Promotion of Metropolitan Lima, which upheld the opposition of the aforementioned enterprises to bargaining at branch level (as requested by the trade union organization), finding that no agreement existed between the parties to establish bargaining at that level. However, the same ruling indicated that the arguments put forward by the enterprises regarding the conclusion of prior agreements at the enterprise level with SITENTEL and the fact that they did not perform telecommunications-related activities did not prevent the initiation of collective bargaining with SITENTEL. Directorate Ruling No. 14-2012-MTPE/2/14 established that the disagreement between the parties – SITENTEL and the Telefónica del Perú subsidiary enterprises – regarding the level at which the first bargaining process should be held could be resolved by means of optional arbitration, in accordance with the provisions made by the Constitutional Court in a ruling of 2009 and Supreme Decree No. 014-2011-TR. Accordingly, in the case analysed in this section, it should be noted that the Administrative Labour Authority has duly established the limits of its own decision-making capacity, simply advising as to the most appropriate mechanism for reaching a resolution on the level at which bargaining should take place, either on the initiative of the parties (via voluntary arbitration), or of one of the parties (through optional labour arbitration).
2. 743. The Government states that the 2011–12 collective bargaining process between SITENTEL and the subcontractors of Telefónica del Perú SA began on 30 October 2010, when SITENTEL initiated collective bargaining at branch level concerning the provision of telecommunication services to the following subcontractors of Telefónica del Perú SA: ITETE Perú SA, Cobra Perú SA, Consorcio Antonio Lari Mantto and Emerson Network Power del Perú SAC In its ruling No. 021 2011 MTPE/2/14 of 4 November 2011 (which constitutes a binding administrative precedent), the General Labour Directorate declared unfounded the appeal for review lodged by the four aforementioned enterprises against the ruling of the Regional Directorate for Labour and Employment Promotion, which stated that the four subcontractors carried out telecommunications-related activities – both supplementary and ongoing – for the user enterprise Telefónica del Perú SA, and that SITENTEL was therefore fully entitled to propose collective bargaining. Directorate Ruling No. 021-2011-MTPE/2/14 was issued, together with other arguments, on the following grounds: (i) the enterprises in question were considered to be part of the telecommunications sector, in accordance with the principle of substance over form, which is recognized by the inspectorate under the General Labour Inspection Act No. 28806. Furthermore, it was understood that, according to this principle, the services of the four enterprises do not belong or are not ascribed to the user enterprise, demonstrating that the ongoing provision of services that are supplementary but essential for the performance of the activities carried out by the user enterprise determines that the workers are part of the telecommunications sector; (ii) regarding the aforementioned administrative rulings, it stated that the erroneous interpretation of the scope of freedom of association was based on a misinterpretation of section 5 of the Industrial Relations Act, using a criterion no longer in use. Collective bargaining in the current context of productive decentralization requires harmonious consistency between freedom of association and existing labour standards relating to collective labour rights, which should be interpreted with the intention to protect, guaranteeing the full exercise of freedom of association as a fundamental right; and (iii) lastly, it stated that, in determining the level of collective bargaining, note should be taken of the pronouncements of the Constitutional Court in its ruling on Case No. 03561 2009-PA/TC regarding the application of dispute settlement mechanisms (in particular, labour arbitration) where there has been no prior bargaining between the parties and they have been unable to reach an agreement on the level at which bargaining should take place.
3. 744. The Government adds that, although the ruling brought the administrative proceedings to an end, in March 2012 Cobra Perú SA filed an appeal for review against a directorate ruling of the Regional Directorate for Labour and Employment Promotion, which it had followed up by calling on the parties to participate in conciliation committees to help them resolve their dispute. In Directorate Ruling No. 22-2013/MTPE/2/14, of 18 April 2013, the appeal was declared inadmissible on the grounds that the administrative remedies had been exhausted. On 6 November 2011 and 24 May 2012, the Sub-Directorate for Collective Bargaining of the Regional Directorate for Labour and Employment Promotion of Metropolitan Lima requested the four subcontractors (ITETE Perú SA, Cobra Perú SA, Consorcio Antonio Larí Mantto and Emerson Network Power del Perú SAC) to convene the bargaining committee for the 2010–11 list of demands. In each case, the enterprises submitted various communications and appeals opposing the initiation of bargaining. All of these were rejected. In a communication of 29 August 2012, SITENTEL requested the Regional Directorate for Labour and Employment Promotion of Metropolitan Lima to refer the case to the General Labour Directorate. Under notification No. 15351 2012-MTPE/2/20, of 25 September 2012, this directorate transferred the request to the General Labour Directorate, which was referred to the Directorate for the Prevention and Resolution of Labour Disputes and Corporate Social Responsibility on 15 October 2012. This body sent invitations to both parties to extra-procedural or conciliatory meetings on 7, 12 and 19 November 2012. These invitations received a reply from Emerson Network Power del Perú SAC and Cobra Perú SA, which excused themselves from participating in the extra-procedural or conciliatory meetings.
4. 745. The Government states that the Directorate for the Prevention and Resolution of Labour Dispute and Corporate Social Responsibility has promoted other alternative dispute resolution mechanisms as a result of a series of actions linked to the collective labour dispute between the parties. In general, it should be noted that the effectiveness of such mechanisms does not depend on the will of the Administrative Labour Authority (although it is true that it must optimize its efforts, as has been the case, in assisting the parties to reach a solution). The resolution of the dispute, in such scenarios, ultimately depends on the goodwill of the collective parties. This explains why the aforementioned rulings establish arbitration as a suitable example of such mechanisms.
5. 746. Faced with the demerger of one of the enterprises affiliated to Telefónica del Perú (Telefónica Gestión de Servicios Compartidos Perú SAC) to join another enterprise (T Gestiona Logística), when the former was in the midst of collective bargaining, the General Labour Directorate issued a technical opinion within the scope of its legal remit, at the request of SITENTEL, contained in Report No. 024-2013-MTPE/2/14, of 8 April 2013. The report stated that such changes in the structure of enterprises were an expression of freedom of enterprise and freedom of private initiative (both freedoms are enshrined in the Peruvian Constitution) and were therefore legitimate, provided that they did not infringe the freedom of association or the right to collective bargaining when applying the reasonability test.
6. 747. The interpretation of this case (which is not subject to any specific regulations) indicated that the initiation of collective bargaining proposed in the 2011–12 SITENTEL list of demands met the requirements for its establishment and organization at the time at which the proposal was submitted. Accordingly, given that the trade union was still in existence, the collective bargaining process should have gone ahead, applying to those members who had not been transferred from Telefónica Gestión de Servicios Compartidos Perú SAC in the aforementioned demerger, or to all the workers of that enterprise if the conditions established in that regard in Peruvian legislation were met. In addition, the aforementioned report also took into consideration the situation of the workers transferred to Tgestion Logística, stating that, in their case, the legal consequence of the application of the rules established under the Industrial Relations Act allowed those persons to preserve, under their new contracts, the benefits obtained under the collective agreement in force in Telefónica Gestión de Servicios Compartidos Perú SAC at the time of the demerger.
7. 748. Note should also be taken of the administrative proceedings filed by Cobra Perú against the Ministry of Labour and Employment Promotion seeking a court ruling declaring: (a) as its main claim, the cancellation of Directorate Ruling No. 021-201-MTPE/2/14, issued on 4 November 2011 by the Director of the General Labour Directorate in Case No. 132173 2012 MTPE/1/20.21, declaring inadmissible the appeal for review filed by the aforementioned enterprise against Directorate Ruling No. 022 2011 MTPE/1/20, issued on 3 October 2011 by the Director of the Regional Directorate for Labour and Employment Promotion of Lima; and (b) as an additional claim, the annulment of any subsequent administrative rulings and collective bargaining pursued by SITENTEL, and consequently declaring that the enterprise was under no legal obligation to bargain with the aforementioned trade union organization.
8. 749. On 10 February 2012, the appeal was transferred, requesting that it be declared inadmissible, given that the appeal for review had been lodged after the expiry of the period established under section 8 of Supreme Decree No. 001-93-TR, amended by section 1 of Supreme Decree No. 017-2003-TR and paragraph 7 of the Single Text on Administrative Procedures of the Ministry of Labour and Employment Promotion, approved by Supreme Decree No. 016-2006-TR and other amendments, and because the merits for the rejection of the appeal lodged by the aforementioned enterprise were in conformity with the provisions of the Political Constitution of the State, ILO Conventions, Supreme Decree No. 010-2033-TR, and Act No. 27444.
9. 750. Ruling No. 04 of 31 January 2012 acknowledged the challenge by the Trade Union of Workers of Telefónica del Perú and of the telecommunications sector (SITENTEL) against the appeal.
10. 751. Ruling No. 07 of 11 June 2012 sets out the points of the proceedings, establishing the following areas of controversy: (a) determining the need to declare the invalidity of Directorate Ruling No. 021-2011-MTPE/2/14 issued by the General Labour Directorate; and (b) determining the need, as a result of the above, to dismiss any administrative rulings subsequently issued and collective bargaining pursued by SITENTEL, and consequently declare that the enterprise was under no legal obligation to bargain with the aforementioned trade union organization. Ruling No. 08 of 11 September 2012 notified the parties of Decision No. 779-2012, issued by the Provincial Public Prosecutor of the Third Public Prosecution Department of Lima, recommending that the proposed appeal should be declared unfounded, and that the rulings be added to the case file pending a final decision. As a result of the implementation of the new Labour Procedure Act, the case was referred to the 19th Specialized Transitional Labour Court of Lima, where it is currently pending a ruling as to the merits.
11. 752. In conclusion, the General Labour Directorate declared inadmissible the appeals for review filed by the four Telefónica del Perú SA enterprises against the ruling of the Regional Directorate for Labour and Employment Promotion, stating that the four subcontractors performed telecommunications-related activities for the user enterprise, Telefónica del Perú SA (hence, SITENTEL is fully entitled to propose collective bargaining in this area). At the legal level, the Prosecutor’s Office of the Ministry of Labour and Employment Promotion is seeking to ensure that the collective bargaining process pursued by SITENTEL goes ahead and that the aforementioned enterprise is declared under a legal obligation to bargain with this trade union.
12. 753. In its communication of 5 June 2014, the Government outlines some of the main arguments supporting the provisions of Directorate Ruling No. 147 2013/MTPE/2/14: (a) the rulings issued by the regional bodies of the Administrative Labour Authority do not impose bargaining on the parties at any specific level, but simply provide for the initiation of direct discussions and, in accordance with the principle of free and voluntary negotiation, the determination of the conventional and legislative terms and conditions of any agreements which may or may not be reached. This recognizes the principle enshrined in Article 4 of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98) of the ILO and in its provisions, and outlined by the Peruvian Constitutional Court in Case No. 03561-2009-PA/TC, stating that “... the State should not and must not use coercion to impose a system of collective bargaining on any organization … . Nevertheless, this does not prevent the State from making legislative provisions for mechanisms to assist in bargaining such as conciliation, mediation or arbitration, or for supervisory bodies with a mandate to facilitate bargaining”; (b) the determination of the bargaining level in collective bargaining processes must take into consideration the points set out by the Constitutional Court in Case No. 03561-2009-PA-TC, which indicate that the level of bargaining cannot be laid down by law, thus a law imposing a negotiating level cannot be applied; and (c) in this regard, note should also be taken of the conclusions of Directorate Ruling No. 021-2011/MTPE/2/14, issued in connection with a collective bargaining process similar to that between SITENTEL and the Telefónica group subcontractors and which constitutes a binding administrative precedent. This Directorate Ruling states that the process of productive decentralization that the principal enterprise (Telefónica SAA) has undergone does not diminish the capacity of trade union organizations to bargain collectively on relevant issues, thereby permitting the recognition of freedom of enterprise and freedom of association. Therefore, with a view to maintaining harmonious accord between the enterprise’s right to decentralize phases of its production and the freedom of association, the existing labour standards relating to collective labour rights should be interpreted with the intention to protect, guaranteeing the full exercise of freedom of association as a fundamental right.

Collective bargaining 2013–14

1. 754. As regards the period 2013–14, the Government reports that on 30 October 2013, SITENTEL presented the list of demands for the period 2013–14 in order to engage in bargaining at branch level with the employers Teleatento Perú SAC, Telefónica Servicios Comerciales Perú SAC and Telefónica Centros de Cobro SAC In Directorate Ruling No. 179-2013-MTPE/2/14 of 2 December 2013, the General Labour Directorate provided for the initiation of collective bargaining between SITENTEL and the aforementioned Telefónica group enterprises. In communications dated 16, 18 and 27 December 2013, Telefónica Centros de Cobro SAC, Telefónica Servicios Comerciales and Teleatento del Perú SAC, respectively, indicated their opposition to the collective bargaining process; in a communication sent on 16 January 2014, SITENTEL submitted a written response to the opposition by the Telefónica group enterprises.
2. 755. As regards the list of demands presented by SITENTEL (for the 2013–14 period), the Government reports that, on 30 October 2013, SITENTEL presented the branch-level list of demands for the period 2013–14 before the Administrative Labour Authority. It included the following Telefónica group subcontractors: (i) Instalación de Tendidos Telefónicos del Perú SA; (ii) Cobra Perú SA; (iii) Antonio Lari Mantto SAC; (iv) Calatel Infraestructuras y Servicios SAC; and (v) Dominion Perú Soluciones y Servicios SAC Given that the case had a supra-regional or national reach, in accordance with section 3 of Supreme Decree No. 017- 2012-TR, the list of demands was referred to the General Directorate, which issued Directorate Ruling No. 184 2013 MTPE/2/14 on 2 December 2013, initiating collective bargaining between SITENTEL and the subcontractors listed above (Case No. 152-2013-MTPE/2.J4). On 19 December 2013 and 3 January 2014, Calatel Infraestructuras y Servicios SAC and Cobra Perú SA, respectively, opposed the collective bargaining process concerning the branch-level list of demands for the period 2013–14.
3. 756. As regards the list of demands submitted to Telefónica Gestión de Servicios Compartidos SAC by SITENTEL (for the period 2013–14), the Government declares that, on 30 October 2013, SITENTEL submitted the list of demands that it had sent to Telefónica Gestión de Servicios Compartidos SAC for the period 2013–14 to the Administrative Labour Authority.
4. 757. In Directorate Ruling No. 181-2013-MTPE/2/14 of 2 December 2013, the General Labour Directorate initiated collective bargaining between the parties (Case No. 149-2013-MTPE/2/14).
5. 758. On 29 January 2014, SITENTEL indicated that the direct discussion stage had been concluded. The parties are currently discussing the list of demands at the conciliation stage. They were invited to meet on 24 February, 17 and 28 March, 15 and 29 April, 12 and 26 May and 4 June and, at the request of both parties to continue with the conciliation stage, they were further invited to meet on 17 June 2014.
6. 759. As regards the list of demands that SITENTEL submitted to Telefónica Móviles SA for the period 2013–14, the Government declares that, on 30 October 2013, SITENTEL submitted the list of demands sent to the employer, Telefónica Móviles SA, for the period 2013–14 to the Administrative Labour Authority. With due consideration of the alleged supra-regional or national nature of the process, the General Labour Directorate provided for the initiation of collective bargaining between the parties in Directorate Ruling No. 183-2013-MTPE/2/14, of 2 December 2013 (Case No. 151-2013-MTPE/2/14).
7. 760. On 4 March 2014, SITENTEL indicated that the direct discussion stage had been concluded. The parties are currently discussing the list of demands at the conciliation stage. The parties were invited to meet on 17 and 28 March, 14 and 25 April, 7, 13, 21 and 28 May, and 4 June 2014. The parties were also invited to meet on 16 June 2014, at 2.30 p.m.
8. 761. The Government states that, in connection with the arbitration process concerning the collective bargaining proposed by SITENTEL, the General Labour Directorate has taken a number of actions. The Government concludes by stating that: (a) SITENTEL has submitted a list of demands to Telefónica group employers and to their subcontractors, leading to the initiation of collective bargaining under the supervision of the Administrative Labour Authority, in accordance with the existing legislative framework. This process is following the course established by national legislation, whereby the parties have submitted the communications and taken the actions that they have considered necessary in relation to the positions they hold on the collective bargaining proposals made by SITENTEL. By way of example, the trade union organization has made use of arbitration to resolve its collective demands for the periods in question with various employers; (b) in connection with this collective bargaining process, the Administrative Labour Authority has, within its remit, fulfilled its functions established by law, respecting the principles of free and voluntary bargaining, and the exclusion of state-imposed bargaining levels or conditions; and (c) the workers and trade union organizations (including CUT and SITENTEL) have access to various protection mechanisms to safeguard any relevant rights, both through administrative and judicial channels, in accordance with Peruvian law.

C. The Committee’s conclusions

1. 762. The Committee observes that, in this case, CUT–Peru alleges that Telefónica group enterprises, whether subsidiaries or subcontractors, have systematically opposed the list of demands in collective bargaining at branch level submitted by the federation FETRATEL or the branch union SITENTEL, and that they have used a number of delaying tactics (administrative proceedings, court appeals, amparo proceedings, and arbitrary legal interpretations) to prevent the bargaining process (according to the allegations, bargaining and collective agreements at the enterprise level only cover a small proportion of workers), despite the level of representation held by SITENTEL (an organization with representation at the branch level), and the fact that the enterprises in question have a relationship of subordination to the main enterprise of the aforementioned group. According to the allegations, this group refuses to engage in conciliation, arbitration or other dispute resolution measures. CUT–Peru states that fines for non-compliance with labour standards do not act as a deterrent for large enterprises like the main enterprise in the Telefónica group.
2. 763. The Committee notes that the complainant organization reports labour law violations, abuses in the use of temporary work, the dismissal of union members and, in one case, the simulation of an employer lockout, and it understands that the aim of these allegations is to show the importance of collective bargaining at branch level. The Committee takes note of the depositions made by the Telefónica group enterprises in this regard and, given that they radically contradict the complainant’s version of events, the Committee will focus on the main issue raised by this case: the level at which collective bargaining should take place in the communications sector.
3. 764. The Committee takes note of the statements made by the Telefónica group and transmitted by the Government, in which it denies the allegations and states that: (1) the Telefónica group has nine trade union organizations (including SITENTEL and FETRATEL) which, although they are branch-level organizations, bargain at the enterprise level in various enterprises (and in one enterprise that does not operate in the telecommunications sector). Membership levels vary widely (in the main enterprise it stands at 80 per cent, in two enterprises it is between 30 and 33 per cent, and in three others it stands, according to the Government, between 6 and 11 per cent), and ten collective agreements are currently in force, in addition to other collective agreements signed in connection with the reorganization of two enterprises within the group; (2) the refusal in 2011 to bargain at branch level was based on objective and reasonable criteria and the dispute was settled in a satisfactory manner for the enterprises by the Administrative Labour Authority. The trade unions did not bring judicial proceedings against the administrative rulings; (3) compulsory arbitration procedures are currently being imposed on two enterprises to determine the level at which bargaining should take place. Moreover, one of those enterprises is also currently negotiating a collective agreement at the enterprise level; and (4) according to the figures provided by the enterprise, the level of SITENTEL membership among its workers is very low. The Committee notes that the Government declares that: (a) SITENTEL presented lists of demands to the employers of the Telefónica group and its subcontractors, which have led to the initiation of collective bargaining under the supervision of the Administrative Labour Authority, in accordance with the existing legislative framework. This process is following the course established by national legislation, whereby the parties have submitted the communications and taken the actions that they have considered necessary in relation to the positions they hold on the collective bargaining proposals made by SITENTEL. By way of example, the trade union organization has made use of arbitration to resolve its collective demands for specific periods and with specific employers; (b) in connection with this collective bargaining process, the Administrative Labour Authority has, within its remit, fulfilled its functions established by law, respecting the principle of free and voluntary bargaining, and the exclusion of state-imposed bargaining levels or conditions; and (c) the workers and trade union organizations (including CUT and SITENTEL) have access to various protection mechanisms to safeguard any relevant rights, both through administrative and judicial channels, in accordance with Peruvian law.
4. 765. The Committee observes that collective bargaining in this case (for the periods 2011–12 and 2013–14) has been considerably delayed as a result of SITENTEL wanting to bargain at branch level, against the wishes of some of the enterprises in the group (the 2011–12 collective bargaining process is pending a court ruling as regards the level at which bargaining should take place; as for the 2013–14 bargaining procedure, SITENTEL has submitted lists of demands involving eight enterprises and one demand involving one enterprise – against which an appeal has been lodged by a number of these). The Committee also wishes to point out that compulsory arbitration at the request of one of the parties (under government supervision), regarding the level of bargaining, is not consistent with the principle of free and voluntary bargaining established under Convention No. 98.
5. 766. The Committee observes that in the examination of a previous case relating to Peru (Case No. 2689) the Committee noted that the right to collective bargaining of the federation FETRATEL on behalf of its member trade unions in the telecommunications sector had been recognized in rulings of the Ministry of Labour of 2008 and 2009 [see 357th Report, Case No. 2689, para. 922]. The Committee therefore observes that the right of the branch federations and trade unions to bargain collectively at branch level is legally recognized.
6. 767. The Committee reminds the Government that it can invite the most representative employers’ and workers’ organizations to establish a mechanism to resolve conflicts relating to the level at which collective bargaining should take place (for example, a body made up of independent individuals with the confidence of the parties) [see 343rd Report, Case No. 2375 (Peru), para. 181] in order to find solutions to problems related to the level of bargaining when they arise.
7. 768. In these circumstances and taking into account the appeals lodged in relation to the allegations, the Committee considers that this case does not call for further examination.