Report in which the committee requests to be kept informed of development - Report No 387, October 2018

1. 576. The complaint is contained in communications dated 10 August and 24 November 2015 and 6 December 2016 from the Federation of Textile Workers of Peru (FTTP).
2. 577. The Government sent its observations in communications dated 1 June, 19 September and 31 October 2016; 3 May, 25 August and 11 September 2017; and 24 July 2018.
3. 578. Peru has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant’s allegations

1. 579. In communications dated 10 August and 24 November 2015, the Federation of Textile Workers of Peru (FTTP) alleges the lack of industry-wide bargaining in the textile sector; lack of progress in repealing legislative provisions impeding the exercise of trade union rights; and violations of freedom of association in various enterprises in the sector, including anti-union dismissals and attempts to persuade union members to resign in an effort to dismantle trade unions, non-observance of a wage agreement, non-payment of allowances established by collective agreement and denial of the right to, and obstruction of the enjoyment of, trade union leave.
2. 580. First, the complainant organization reports that no regulations or directives have been issued to allow collective bargaining to take place at the branch of activity or trade level, since this right was violated in the 1990s with the change in labour law and the Constitution. The complainant recalls that it had already been reported to the Committee in the past that the country’s Textiles Committee had rejected the complainant’s national-level list of demands by industry. With regard to the present complaint, the complainant alleges that, in a further attempt to secure industry-wide collective bargaining, a national list of demands for the textile sector was submitted on 30 March 2015. After the list was duly approved by the Ministry of Labour and Employment Promotion, the parties were summoned to begin collective bargaining, but the Textiles Committee of the National Society of Industries again raised objections, refusing to engage in discussions. The complainant adds that, after the FTTP and the Ministry of Labour dismissed the objections, the parties were again invited to the table, but were informed that the file had been misplaced. The complainant is therefore seeking a way to resolve this impasse so as to pursue the legal bargaining process.
3. 581. Second, the complainant alleges that there have been violations of freedom of association in various enterprises in the textile sector.
4. 582. The complainant alleges that, after granting paid union leave – in accordance with a federal collective agreement – for more than three years continuously to the FTTP union leader and national general secretary, Mr Vicente Castro Yacila, the company Creditex S.A.C. (textile company 1) announced that, as from May 2015, the official’s union leave would be granted without pay; it also suspended payment of health insurance and pension contributions and offered him financial incentives to resign from the company. In this connection, the FTTP, as well as the Confederation of Workers of Peru (CTP), filed an application with the National Labour Inspection Supervisory Authority (SUNAFIL) for the restitution of his right to paid union leave. In addition, in March 2015, the FTTP sought a ruling from the Legal Affairs Office of the Ministry of Labour and Employment Promotion on the right of its officials to enjoy paid union leave. The complainant reports that a decision in favour of the FTTP was issued by official communication No. 2946-2015-MTPE of 4 August 2015 and that, in view of the company’s refusal to continue granting union leave to the union official, a petition was brought before the Tenth Labour Court of Lima. In this connection, it reports that: (i) on 3 December 2015, the judiciary issued an interim measure ordering the temporary restitution of the general secretary’s right to paid union leave; (ii) although textile company 1 is complying with the interim measure, it is demanding supporting documentation for the periods of union leave – requiring the submission of monthly applications and notifications for leave before any payment is made – in accordance with a regulation (Decree-Law No. 14481 concerning provisions for members of the National Labour Council to attend sessions), which does not concern the union leave in question (which is based on the 1984 federal agreement); (iii) on 28 March 2016, the Permanent Specialized Labour Court of Lima issued a ruling (No. 67 2016-10ºJETP) upholding the petition and ordering the restitution of Mr Castro Yacila’s right to ongoing paid union leave, with the payment of any outstanding remuneration and social benefits arising from unpaid union leave he took; and (iv) the textile company lodged an appeal against the ruling, which was admitted and is reportedly pending a hearing.
5. 583. The complainant alleges that Fábrica de Tejidos Pisco S.A.C. (textile company 2) is refusing to comply with ministerial decisions to implement a wage increase of 2.60 soles per day (approximately US$0.78) agreed after a strike in late 2010, and that, despite having been recognized by different judicial bodies, this claim continues to be the subject of court proceedings. The FTTP reports that, in an effort to intimidate trade unionists, in November 2015, days prior to a hearing before the Supreme Court of Lima to address the issue, the company summoned the union’s executive board to inform them of its decision to dismiss 185 workers en masse, including most of the union officials, using as a basis the Act on Labour Productivity and Competitiveness. When the FTTP reacted, the company, in an attempt to dismantle the trade union, contacted the workers concerned, offering them significant sums of money to resign from the company. In a further communication, the complainant adds that: (i) after the company had applied to the labour authority of Ica for the collective termination of 75 employment contracts, using as objective grounds its alleged financial situation, the labour authority did not authorize the collective dismissal procedure on two occasions; (ii) the company filed an application for review, which resulted in an executive decision setting aside the original decision and ordering a new, duly substantiated decision (but without questioning the operative part); (iii) however, the Ica labour authority, disregarding both its own decision and the executive decision, ultimately declared the company’s appeal to be well founded and approved the application for the collective termination of 75 employment contracts on objective grounds, on the basis of wholly flawed assessments; (iv) on 22 February 2016, the company applied to the Regional Labour Directorate of Ica for the temporary suspension of 59 workers, who were then suspended the following day and remain suspended to this day; and (v) on 26 October 2016, an executive decision was issued which upheld the appeal lodged by the company’s trade union, setting aside the decision approving the application for the collective termination of the contracts of 75 workers and requesting the Regional Labour Directorate of Ica to issue a new ruling. The FTTP also reports that the company refuses to grant union leave to the leader of the Fábrica de Tejidos Pisco S.A.C. trade union and FTTP deputy general secretary, Mr Francisco Juvencio Luna Acevedo, or to the secretary for technical and statistical matters, Mr Hernán Carbajal Melgar, and that corruption of public officials meant that the labour inspectorate issued a ruling in the company’s favour.
6. 584. The complainant alleges that the textile company Nuevo Mundo S.A. (textile company 3), relying on the Act on the Promotion of Non-Traditional Exports, dismissed the workers Mr Cesar Augusto Velazco Díaz (on 10 April 2015) and Mr Luis Nazario Villafana Machado (on 4 May 2015) for joining the company trade union, as well as union members Mr José Alfredo Bedia Sierra (on 14 March 2016) and Mr Emilio Albert Quiñones Zavala (on 15 November 2016) because they took legal action. The company alleged in all cases that the grounds for termination were that their contracts had expired. The complainant indicates that, several months previously, as a result of inspections, Regional Administrative Decision No. 262-2014 of 22 December 2014 imposed a fine on the company of 608,000 soles (equivalent to around US$185,000) for employment relationship offences and obstructing inspection work, deeming that the company was altering the nature of the employment relationship of fixed-term contracts and that 629 workers (including the two dismissed trade unionists) should have contracts without limit of time (the complainant appealed against the sanction, as the company union and the FTTP had claimed a legitimate interest to participate in the case, which is still pending a decision). Furthermore, the dismissals of the trade unionists were the subject of judicial proceedings: (i) with regard to Mr Velazco Díaz, the complainant reports that the trade unionist was reinstated through an interim measure but that, two months later and just days away from the final hearing, the company offered financial incentives to persuade him to resign from his job, which he did without informing either the union or the federation that were defending him; (ii) with regard to Mr Villafana Machado, the complainant reports that he too was offered money by the company to discontinue the legal proceedings, and that completion of those proceedings is pending; (iii) with regard to Mr Bedia Sierra, an arbitration hearing took place, but the union member did not accept the sum offered by the company to close the case, and it remains pending; and (iv) with regard to Mr Quiñones Zavala, a complaint was lodged about the company’s alteration of the nature of contracts, but due to the general strike, an application for reinstatement on the grounds of unfair dismissal had yet to be filed. Moreover, the complainant alleges that the company is failing to pay the allowances for snacks and refreshments established in a collective agreement to 95 per cent of the fixed-term workers hired under the non-traditional exports regime; the company trade union and the FTTP initiated court proceedings in this connection, which are also still ongoing.
7. 585. Third, the complainant alleges that a date has still not been set for the legislature to debate a bill seeking to repeal articles 32, 33 and 34 of the Act on the Promotion of Non-Traditional Exports and other provisions that continue to violate the rights of workers in the textile sector.

B. The Government’s reply

1. 586. In its communications, the Government transmits the observations of the public authorities and the relevant institutions and companies with respect to the complainant’s allegations.
2. 587. With regard to the alleged obstruction of industry-wide collective bargaining in the textile sector, the Government reports that there is no impediment to industry-wide bargaining in national legislation. In this connection, the Government cites article 45 of the Collective Labour Relations Act (LRCT), which states that: “If there is no existing collective agreement at any level of the nature indicated in the preceding article, the parties shall decide by common accord the level at which they shall enter into the initial agreement. Failing accord, collective bargaining shall take place at the enterprise level. If an agreement exists at any level, entering into another at a different level, either to replace or complement the existing one, shall require the agreement of the parties; it may not be established through administrative act or arbitrator’s ruling. [...]”. The Government also transmits the observations of the National Society of Industries (SNI). The SNI states that: (i) the SNI Textiles Committee neither has legal personality nor does it represent the textile industry, and acts only as a specialized adviser to member companies (which does not include all textile companies in the country); (ii) while the SNI does have legal personality, it does not have the mandate to represent its members on employment issues relating to conditions of work or remuneration (which has been supported by the Ministry of Labour and Employment Promotion); (iii) it is not true that the Ministry of Labour instructed that collective bargaining should take place at industry level – in accordance with the law, for industry-wide collective bargaining to take place, there must be willingness on both sides and, in the case of the textile industry in Peru, there is no such willingness from both parties; and (iv) companies are engaging in collective bargaining and directly with their respective trade unions.
3. 588. With regard to the alleged denial of the right to, and obstruction of the granting of, paid union leave by textile company 1 with respect to the general secretary of the complainant organization, the Government reports that several inspection orders were issued to textile company 1, but it emerged that the matter was the subject of judicial proceedings, therefore the labour inspector did not proceed. In this connection, in its latest communication, the Government reports that the judicial proceedings are awaiting a hearing to address the company’s appeal against the initial ruling that had recognized the union leave. The Government also transmits the observations of textile company 1, which states that: (i) the claim concerns continuous union leave, which has allegedly not been granted to Mr Castro Yacila since May 2015; (ii) the applicable collective agreement of 1984 provides that paid union leave is for a period of 200 days, and the matter is under discussion and is still before the courts, pending a further hearing after the High Court of Justice of Lima set aside ruling No. 67-2016-10º JETP; (iii) since May 2014, Mr Castro Yacila has no longer been affiliated to the trade union of textile company 1 and has been affiliated to a different organization, the FTTP; (iv) ruling No. 67-2016-10º JETP, issued by the lower court, acknowledged that paid union leave is not for an indefinite period and is granted whenever the worker requires it to carry out trade union activities; (v) the ruling was set aside solely on the grounds that it had not been specified whether the 200 days of leave is calculated on an annual basis, or over the entire four-year period of Mr Castro Yacila’s term as FTTP general secretary; (vi) since the granting of union leave is conditional on the exercise of union duties, in his capacity as FTTP union leader the said worker is required to duly substantiate absences that are linked to the exercise of his union activities; (vii) the worker himself voluntarily provided documentation supporting his requests for paid union leave, but stopped doing so as from January 2017; (viii) in addition, Mr Castro Yacila requested that he be granted paid leave as a member of the National Labour Council and the National Occupational Safety and Health Council, and stopped turning up for work, even though these bodies have not been in session; and (ix) notwithstanding the above, the company has been paying the union leave of those taking it in accordance with the relevant interim measure, even though the judiciary clearly indicated that paid union leave is applicable strictly in the context of union activities. Accordingly, with regard to the allegation that there was a requirement to submit the notices of and invitations to union-related meetings for leave to be granted, and that that was inconsistent with the provisions governing the granting of union leave under the relevant federal agreements, the Government provides detailed information on the applicable legal framework, under both national legislation and case law, recalling in general that: (1) in accordance with article 32 of the LRCT, “The collective bargaining agreement shall contain provisions with a view to facilitating union activities in relation to meetings, communications and leave”, or, in the absence of such an agreement, “the employer shall only be required to grant leave for events at which attendance is compulsory for the relevant officials”; (ii) since the current regulations allow the parties, that is, the employer and the workers, to establish the necessary provisions for granting union leave through collective agreements, as long as the procedure for granting such leave has been established in a given agreement, there would be no need to amend the agreement, especially when the amendment could be detrimental to or obstruct the exercise of the right in question; and (iii) failing that, the employer may establish the procedure for granting union leave, which should be founded on respect for collective rights. Based on its legal analysis, the Government notes that: (a) there is no indication in the regulations that employers may request any supporting documentation for a leave request as a precondition for granting leave; (b) such leave shall only be linked to the responsibilities set out in the current regulations (in particular, the LRCT provides that, if no agreement exists between the parties, the use of leave shall be notified to the employer at least 24 hours in advance, except when that is not possible in the case of unforeseeable circumstances or force majeure); (c) no other restrictions or conditions shall be imposed (least of all by the employer), since leave is a matter that falls under trade unions’ own internal autonomy, as recognized under the Constitution itself; (d) it is much more efficient for the trade unions themselves or their members to have the authority to oversee the reasons for and the use of leave by union leaders, as otherwise it would mean that employers could monitor the reasons for requests for union leave, which could constitute interference in the exercise of that right; and (e) the Ministry of Labour and Employment Promotion sent the contents of the regulations and case law to the company concerned.
4. 589. With regard to the allegations of failure to implement an agreed wage increase, of anti-union dismissals, and of denying leave to union leaders in textile company 2, the Government notes that it requested that SUNAFIL report on the findings of the inspections conducted in relation to the allegations. In addition, the Government transmits a communication from the company concerned, in which the company provides observations on the judicial proceedings seeking to set aside the executive decisions of the regional government of Ica, underscoring that: (i) in late 2010, the company’s trade union presented collective bargaining proposals and various meetings were held, exhausting the stages of direct contact and negotiation with the participation of the Ministry of Labour (all the while maintaining dialogue); (ii) in October 2011, the trade union initiated a strike, but the company maintained its ongoing dialogue with union leaders; (iii) a decision dated 25 October 2011 announced the end of the strike and a settlement under a collective agreement, decreeing a general pay increase of 2.60 soles (approximately US$0.78) and a bonus of 800 soles (approximately US$243.61), while the other matters under the proposed collective agreement were dismissed; (iv) the company challenged the relevant points of the decision, and, ultimately, in December 2013, the High Court of Ica set the decision aside, annulling the decreed increase; and (v) once the end of the strike was announced, the workers were supposed to resume their usual work activities, but despite having been duly informed, they did not return to work, effectively abandoning their posts as more than three consecutive days had passed. This serious misconduct led the company to send the workers notices of dereliction of duty – despite the fact that it was entitled under the law to dismiss them, it demonstrated good faith in not doing so and did not impose any sanctions.
5. 590. With regard to the allegations of dismissals, non-payment of agreed allowances for snacks and refreshments, and the misuse of the Act on the Promotion of Non-Traditional Exports by textile company 3, the Government notes that the inspections revealed that textile company 3 had drawn up 629 employment contracts relating to non-traditional exports, despite failing to meet the requirement under the Act on the Promotion of Non-Traditional Exports (that it export directly or indirectly 40 per cent of the value of its output sold annually), and that as a result, through Decisions Nos 262-2014-SUNAFIL/ILM/SIRE2 and 140-2014-SUNAFIL/ILM (exhausting the administrative channels), a sanction of 608,000 soles (approximately US$185,000) was imposed. In addition, the Government submits the observations provided by the company concerned, which state that: (i) in the cases of Mr Velazco Díaz and Mr Villafana Machado, it is not true that the company dismissed them; rather, in both cases, the employment relationship ended due to the expiry of their employment contract for non-traditional exports; (ii) the company lodged an administrative appeal seeking to set aside the aforementioned decisions (No. 262-2014-SUNAFIL/ILM/SIRE2 and No. 140-2014-SUNAFIL/ILM), which remains ongoing; (iii) the cases of Mr Velazco Díaz and Mr Villafana Machado were concluded and closed since agreements had been reached in the relevant courts (this is confirmed by the Government based on the observations it received from the judicial authorities concerned); (iv) the case of Mr Bedia Sierra remains pending a hearing; (v) the case presented by Mr Quiñones Zavala, the FTTP and the company trade union (alleging the alteration of the nature of contracts and the non-payment of allowances for snacks and refreshments) is still ongoing, and (vi) contrary to the complainant’s assertion, the company did not offer any financial or other incentives, and duly provides allowances for snacks and refreshments, in accordance with the signed collective agreements.
6. 591. As regards the allegation of a lack of progress towards the repeal of articles 32, 33 and 34 of the Act on the Promotion of Non-Traditional Exports and other related provisions, the Government notes that the proposed amended Act has been approved by the Foreign Trade Commission, and is now pending approval by the members of the Labour and Social Security Commission.

C. The Committee’s conclusions

1. 592. The Committee notes that the complaint concerns allegations of a refusal to engage in industry-wide collective bargaining in the textile sector; of anti-union dismissals and attempts to persuade union members to resign in order to dismantle trade unions; of non-compliance with an agreement on wage increases; of denial of the right to union leave and of non-payment of allowances established under a collective agreement; and a lack of progress in repealing legal provisions that impede the exercise of trade union rights.
2. 593. With regard to the alleged obstruction of industry-wide collective bargaining in the textile sector, the Committee notes that: (i) according to the Government, there is no impediment to industry-wide bargaining in national legislation; and (ii) according to the trade association, contrary to the complainant’s assertion, it is not true that the Ministry of Labour had instructed that collective bargaining should take place at industry level, given the lack of willingness of both parties in the sector to engage in negotiations at that level, hence collective bargaining continues to take place at the enterprise level. In this regard, the Committee notes that the Government refers to article 45 of the LRCT, which states that, failing accord on the level at which collective bargaining should take place, bargaining shall take place at the enterprise level. It further states that, if an agreement exists at any level, entering into another at a different level, either to replace or complement the existing one, shall require the agreement of the parties. The Committee recalls that it had occasion to review the matter of determining the bargaining level, and in particular, the application of article 45 of the LRCT, in previous cases brought both by employers’ organizations (Case No. 2375, questioning the obligation to negotiate according to branch of activity in the construction sector) and workers’ organizations (Case No. 2826, brought by the FTTP, questioning the refusal to negotiate at the branch level in the textile sector). In both cases, the Committee underscored that it should be the parties in the collective bargaining themselves who determine the bargaining level, and, concerning the legal provisions and issues relevant also to the present case, the Committee requested the Government to invite the most representative workers’ and employers’ organizations to establish a mechanism to resolve conflicts relating to the level at which collective bargaining should take place, and to take the necessary steps to amend article 45 of the LRCT, so that the level of collective bargaining is determined freely by the parties concerned (see in particular the 338th Report of the Committee, Case No. 2375, paras 1222–1228, and the 362nd Report of the Committee, Case No. 2826, paras 1298–1305). The Committee reiterates its previous conclusions and, noting that the aforementioned legislation maintains a presumption in favour of collective bargaining at the enterprise level in the event of disagreement rather than leaving the matter to the parties and their respective bargaining capacities, requests the Government to consult with the most representative workers’ and employers’ organizations on the possibility of establishing a mechanism to settle disputes relating to the level at which collective bargaining should take place, and on the amendments to article 45 of the LRCT that are required to ensure that the level of collective bargaining is determined freely by the parties concerned. The Committee requests the Government to keep it informed in this respect.
3. 594. With regard to the allegations of the denial of and obstruction of the enjoyment of paid union leave by textile company 1 in respect of the general secretary of the complainant organization, the Committee notes that judicial proceedings are under way on this dispute, and that, in the meantime, an interim measure was issued ordering the temporary restitution of Mr Castro Yacila’s enjoyment of and right to paid union leave. With regard to trade union leave, the Committee recalls that, while account should be taken of the characteristics of the industrial relations system of the country, and while the granting of such facilities should not impair the efficient operation of the undertaking concerned, Paragraph 10, subparagraph 1, of the Workers Representatives Recommendation, 1971 (No. 143), provides that workers representatives in the undertaking should be afforded the necessary time off from work, without loss of pay or social and fringe benefits, for carrying out their representation functions. Subparagraph 2 of Paragraph 10 also specifies that, while workers representatives may be required to obtain permission from the management before taking time off, such permission should not be unreasonably withheld. The Committee further recalls that Paragraph 10(3) of the Workers Representatives Recommendation, 1971 (No. 143), states that: Reasonable limits may be set on the amount of time off which is granted to workers representatives [see Compilation of decisions of the Committee on Freedom of Association, sixth edition, 2018, paras 1603 and 1604]. With regard to the allegation that, despite the interim measure, the company is obstructing the granting of union leave, the Committee, while taking note of the discrepancies in the parties’ accounts (the complainant reports a requirement to substantiate absences, claiming that it is not applicable, while the company asserts the need to duly substantiate absences, and points out that, even in the absence of such substantiation, it continues to remunerate the leave in accordance with the interim measure), observes that the Government provides clarifications on the applicable regulations (underscoring the fact that, if there is no agreement between the parties, no supporting documentation may be requested as a precondition for granting leave, nor can any other restriction be imposed, beyond the responsibilities established under the applicable rules – in particular the general rule of providing 24 hours’ advance notice of leave), and reports that it informed the company accordingly. The Committee requests the Government to keep it informed of any developments in this regard, including of the outcome of the ongoing judicial proceedings.
4. 595. As regards the allegations of non-compliance with an agreed pay increase and of threats to dismiss 185 workers, including most of the union officials, with a decision on the collective termination of 75 workers and the suspension of 59 workers, as well as of providing financial incentives to encourage resignations in order to dismantle the trade union, and the denial of union leave to union officials in textile company 2, the Committee notes that: (i) the Government indicates that in March 2017, it requested SUNAFIL to report on the findings of the inspections conducted in relation to the allegations concerning this company, but that the Government has not provided specific information on the investigations; (ii) the company indicates that the wage increase resulted from a collective bargaining process that led to an administrative decision which decreed the increase, and that the decision was appealed by the company and set aside by the judiciary, revoking the previously decreed pay increase – however, the company has not commented on the allegations of anti-union discrimination (dismissals, threats of dismissal and encouragement of resignations from the union) or of denial of leave; and (iii) according to the information provided by the complainant organization, at least part of the allegations of dismissal were subject to administrative proceedings, which upheld the appeal lodged by the company trade union, setting aside the decision that approved the application for the collective termination of 75 workers and ordering a new ruling. Accordingly, the Committee requests the Government to keep it informed of the outcome of the investigations into the allegations of anti-union discrimination (dismissals, threats of dismissal and encouragement of members to resign from the union) and of denial of leave, as well as of the outcomes of the administrative and judicial proceedings under way, and invites the complainant organization to provide any specific information it might have on any outstanding matters.
5. 596. With regard to the allegations of dismissals, failure to pay the agreed allowance for snacks and refreshments, and the misuse for anti-union purposes of the Act on the Promotion of Non-Traditional Exports by textile company 3, the Committee notes that: (i) in two of the cases of alleged dismissals (Mr Velazco Díaz and Mr Villafana Machado), the judicial proceedings were closed when agreements were reached through conciliation; (ii) the administrative inspection authorities issued separate decisions imposing sanctions on the company for having concluded 629 employment contracts relating to non-traditional exports without complying with the requirements under the Act on the Promotion of Non-Traditional Exports – which the company appealed and the outcome is pending; and (iii) with regard to the allegations of the anti-union dismissal of Mr Bedia Sierra and of the alteration of the nature of contracts (including in relation to Mr Quiñones Zavala) and the failure to pay the allowance for snacks and refreshments established in the collective agreement, judicial proceedings on those matters remain under way. The Committee requests the Government to keep it informed of the outcome of the ongoing judicial proceedings.
6. 597. Lastly, as regards the allegation of a lack of progress in repealing articles 32, 33 and 34 of the Act on the Promotion of Non-Traditional Exports and other related provisions, the Committee notes that, according to the Government, the draft amended Act is in progress, having been approved by the Foreign Trade Commission. The Committee recalls that it had in the past reviewed the implications of these provisions, which reportedly facilitate the recurrent use of short-term contract arrangements, in relation to the impact that the use of such contracts repeatedly and indefinitely can have on the exercise of union rights (see the 374th Report of the Committee, Case No. 2998, para. 723, and the 375th Report of the Committee, Case No. 3065, para. 482). The Committee reiterates its recommendations in this regard and trusts that progress will be made for the adoption of a draft amended Act in the near future.