Informe definitivo - Informe núm. 330, Marzo 2003

1. 855. The complaints are set out in a communication from the Icelandic Federation of Labour (its Icelandic acronym being ASÍ) dated 22 January 2002 as well as in a communication from the Merchant Navy and Fishing Vessel Officers Guild (its Icelandic acronym being FFSI) dated 24 January 2002. In communications dated respectively 30 January and 1 February 2002, the International Transport Workers’ Federation (ITF) and the International Confederation of Free Trade Unions (ICFTU) expressed the wish to be associated with the complaint presented by the FFSI.
2. 856. The Government replied in communications dated 3 September 2002 and 3 March 2003.
3. 857. Iceland has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainants’ allegations

1. 858. In its complaint dated 22 January 2002, the ASÍ alleges that the passing by the Althing (Iceland’s Parliament) of the Act on fishermen’s wages and terms (etc.) No. 34/2001 dated 16 May 2001, banning a strike and a lockout declared by some occupational organizations of the fishing industry and establishing an arbitration panel to determine the wages and terms of the members of the organizations concerned, violates paragraphs 1 and 2 of Article 3 of Convention No. 87 as well as Convention No. 98. In its complaint dated 24 January 2002, the FFSI alleges that Act No. 34/2001 constitutes a gross and fundamental breach of Convention No. 87.
2. 859. In support of their allegations, the complainants make the following points on the process which led to the adoption of Act No. 34/2001 as well as on the application of the Act.
3. 860. The wages of fishermen belonging to unions affiliated to the ASÍ had been previously determined by collective agreements declared applicable by Act No. 10/1998. These collective agreements expired on 15 February 2001 according to the ASÍ. The FFSI, the Icelandic Seamen’s Federation (the Icelandic acronym being SSI), affiliated to the ASÍ, the Engineer Officers’ Association (the Icelandic acronym being VSFI) participated in negotiations with the federation grouping the vessel owners’ organizations, the Federation of Icelandic Fishing Vessel Owners (the Icelandic acronym being LIU). These negotiations lasted for 15 months, according to the indications given by the FFSI. At the beginning of 2001, the negotiations had proven to be unsuccessful. Some unions affiliated to the ASÍ, which had authorized the West Fjords Federation of Labour to negotiate on their behalf, had nonetheless reached separate wages and terms agreements with the West Fjords Vessel Operators’ Association.
4. 861. The stumbling block of the negotiations related to the determination of the price of fish. Fishermen’s wages are based on a “share” of the catch, the value of which is based on the price of fish; hence the importance of this latter element in the collective bargaining process concerning fishermen’s wages and terms. The negotiations related also to other conditions of employment such as higher death and injury compensation, higher minimum wages and increased payment by the vessel owners into pension funds. According to the FFSI, some unions met the Prime Minister on 26 January 2001. The Government promised that it would not intervene in the dispute contrary to what it did twice in respect of past disputes when it stepped in to prohibit strikes in the fishing industry.
5. 862. On 15 March 2001, a national strike began. The strike had been decided by the constituent unions of the FFSI, SSI and VSFI. A lockout was decided by the members of the LIU. On 19 March 2001, the Althing adopted Act No. 8/2001 whereby both the strike and the lockout were postponed until 1 April 2001. A translation of this Act is attached to the FFSI’s complaint. Since at the end of the suspension of the strike, the collective bargaining remained fruitless, the strike resumed on 2 April.
6. 863. As to the parties concerned by the strike and the lockout, the ASÍ gives the following information. The unions which had authorized the West Fjords Federation of Labour to negotiate on their behalf, did not participate in the strike. As far as the SSI is concerned, five constituent unions did not call a strike. On the other hand, a general lockout was imposed by the LIU with the exception of the Snaefellsnes area – one of the unions based in this area was amongst the members of the SSI which were not participating in the strike.
7. 864. On 9 May, the VSFI and the LIU signed a collective agreement. According to the FFSI, this agreement was endorsed by a small majority of the VSFI members with a participation rate of only 27 per cent. On 15 May, the SSI (with the exception of one union) called off the strike. The SSI had received some assurances by the Minister of Fisheries to the effect that, if it called off the strike, the new law about to be adopted by the Althing would not apply to the organization and its members.
8. 865. On 16 May, Act No. 34/2001 was adopted by the Althing with immediate effect. Under article 1 of this Act – a translation of which is appended to the FFSI’s complaint, the strike declared by the FFSI as well as by another union, was declared illegal. The lockout decided by member organizations of the LIU in respect of the members of the West Fjords Federation of Labour and the SSI was also declared illegal. The prohibition was to take effect as of the entry into force of the Act and during the period of validity of any decision taken by the arbitration panel that would be established under the Act. Further, if the parties to the dispute failed to reach an agreement before 1 June 2001, an arbitration panel would be established and its three members designated by the Supreme Court of Iceland. In its complaint the ASÍ points out that article 1 of the law had the effect in practice of involving in the arbitration panel process fishermen organizations which were not on strike, either because they had never participated in the strike, or because they had called it off; the VSFI was the only organization which was not affected by the process because it had concluded an agreement with the LIU. The FFSI confirms in its complaint that the SSI was also concerned by the arbitration process set up under the Act.
9. 866. On 30 June 2001, the panel handed down its decision. More specifically, it decided to extend the application of the collective agreement reached by the VSFI to the members of the organizations referred to in article 1 of Act No. 34/2001. The agreement would apply until 2003 (until 31 March according to ASÍ, until the end of 2003 according to the FFSI).
10. 867. The ASÍ brought a case before the national courts. The Reykjavik District Court decided on 18 July 2001 that Act No. 34/2001 did not infringe the provisions of the Constitution which guarantee freedom of association and the right to collective bargaining. On 25 October 2001, the Supreme Court of Iceland dismissed the case. The ASÍ lodged a second action with the Reykjavik District Court.
11. 868. In support of its complaint, the ASÍ contends that Act No. 34/2001 infringes paragraphs 1 and 2 of Article 3 of Convention No. 87. Should the intervention of the Government be considered justified, the ASÍ contends that the Act contains measures which were not adapted to what the circumstances required. Thus, the ASÍ indicates that the body established under the law was not a court of arbitration but an administrative committee. Further, the ASÍ states that the Act was far too comprehensive. The ASÍ refers in particular to the authority of the arbitration panel to decide the duration of validity of its decision which means that it was at liberty to decide in a arbitrary manner on the duration of the restrictions imposed by the law on free negotiations.
12. 869. The FFSI points out that the passing of Act No. 34/2001 is the fourth intervention of the Government, in the last seven years, in a legitimate strike decided by the fishermen. Such intervention constitutes a gross and fundamental violation of Convention No. 87. Further, the FFSI contends that the constant interventions of the Government has led the LIU to be less willing to negotiate in good faith so as to provoke a long strike and thus the Government’s intervention.

B. The Government’s reply

1. 870. In its communication of 3 September 2002, the Government divides its reply into four parts. Firstly, the Government explains the major role played by fishing and the exports of fish products in the national economy. Secondly, the Government gives explanations on the negotiation process on wages and terms between seamen’s organizations and vessel owners’ organizations and on its outstanding issue: the determination of the price of the fish. The Government then proceeds to describe the adoption and the contents of Acts Nos. 8/2001 and 34/2001 and sums up the ruling of the District Court of Reykjavik in the second case brought before it by the ASÍ. The ASÍ lodged an appeal against the ruling of the District Court of Reykjavik before the Supreme Court. The court upheld the decision of the District Court in a judgement dated 14 November 2002, a copy of which is appended to the Government’s communication of 3 March 2003. Finally, the Government submits its arguments in favour of the compatibility of Act No. 34/2001 with Conventions Nos. 87 and 98.
   • The Icelandic economy
2. 871. On the economic aspects of the matter, the Government underlines that foreign trade is at the basis of the high living standards of the population. About 40 per cent of domestic production is exported and fisheries products stand for 60 per cent of the exported goods and account for about 40 per cent of the total foreign currency settings. Approximately 8 per cent of the workforce is employed in fisheries. The Government points out that economic growth in the nineties is due to economic and political stability and, in particular, to the process known as the “national reconciliation” (already described in the Government’s reply in Case No. 1768 examined by the Committee) and whereby the Government with the social partners managed to tackle inflation which had been a major economic problem.
3. 872. The Government underlines that the fisheries are a sector subject to fluctuations both in terms of catch levels and of prices of the products which means – given the important economic weight of the sector – that Iceland’s trade, and thereby its economy, is subject to greater fluctuations than in any other industrial country. Icelandic fish exporters have succeeded in developing their markets but these markets can be easily lost if the supply fails over a period of time. The Government explains that a prolonged stoppage in the fisheries can have both short-term effects – in terms of loss of export revenues – and long-term effects which include the forfeiture of markets for fish products. Thus, stability in the fishing industry is crucial for the Icelandic economy.
4. 873. The Government points out that the strike, which resumed on 1 April, ended on 16 May and lasted six weeks, was the longest fishermen’s strike. The Government indicated that, in the second quarter of 2001, the value of Icelandic currency had dropped by 8.2 per cent; even if such a decrease is the consequence of many factors the long-term stoppage in the country’s main industry was without a doubt a dramatic contributory factor. Inflation rose again and the economy deteriorated. The Government concludes that, in light of the effect of the strike on the national economy, it had no other choice but to intervene and to put an end to the strike. It is against this background, that the adoption of Acts Nos. 8/2001 and 34/2001 should be examined.
   • Wages and terms negotiations between seamen
   • and vessel operators
5. 874. Turning to the negotiations of fishermen’s wages and terms, the Government makes the following points. Firstly, the Government indicates that freedom of association and collective bargaining are covered by the Trade Unions and Industrial Disputes Act No. 80/1938. Most trade unions in Iceland have a very small membership because the national economic environment, including the fishing and fish-processing industries, is based on small to medium-sized enterprises. This is why unions have grouped together to from larger organizations either on a national or a regional basis. The ASÍ is the largest national federation. The unions have discretionary authority in respect of the negotiation of collective agreements and of their approval. Unions can either negotiate directly or authorize the regional or national associations to bargain on their behalf. In any case, members of each individual union retain the authority to approve or reject each collective agreement negotiated.
6. 875. The Government considers that the determination of wages and terms should primarily be made through collective bargaining. To enhance the process, a special Mediation and Conciliation Officer has been established by Act No. 80/1938. In the first instance, the Officer plays a role of intermediary if the parties have decided to refer the dispute to the Officer. The Office may also make a compromise proposal in order to resolve a dispute when the mediation has proven fruitless. Such a proposal can only be made once all efforts of mediation have been exhausted and it is for the Officer to decide when it would be appropriate to make it.
7. 876. As far as fishermen’s wages are concerned, the Government indicates that the main bone of contention in the collective bargaining process has been the question of the framework within which the price of fish would be determined since this price is at the basis of the sharing system on which fishermen’s wages are determined. The Government also indicates that there is a certain minimum wage which is guaranteed to fishermen. As of the 1990s the price of fish became largely unregulated. Following a two-week seamen’s strike in 1994, a provisional act was passed under which a committee was established by the Government to examine methods of preventing the trading of catch quotas to have a distorted effect on fishermen’s wages. Another strike occurred in 1995 and lasted three weeks; a collective agreement was eventually signed. This agreement included provisions whereby vessel operators and the crew were to negotiate the price of fish. Other provisions provided for the establishment of a special complaints committee. The existence of the committee was enshrined in Act No. 84/1995. Its role was to process information on fish pricing and to determine the price of fish in direct dealing when the parties failed to agree on the price. This Act was repealed by Act No. 13/1998 which created the Catch Share Pricing Office, the role of which was to monitor the price of the fish and promote a just and natural appraisal of the seamen’s shares in the catch. A third strike began in 1998; it was postponed when the Government was about to intervene. The strike resumed after various unsuccessful attempts to reach agreements; a compromise proposal from the Mediation and Conciliation Officer was rejected at that time. Act No. 10/1998 concerning fishermen’s wages and terms subsequently reintroduced the proposal.
8. 877. Act No. 10/1998 was due to apply until 15 February 2000 and negotiations began in December 1999. The difficulties around the price of fish re-ignited. At the beginning of 2001, the negotiations had produced little result and the FFSI, SSI and the VSFI called a strike which began on 15 March. The unions which had authorized the West Fjords Federation of Labour to negotiate on their behalf did not participate in the strike. The vessel operators imposed a lockout all over the country with the exception of the Snaefellsnes area where there was therefore neither a strike nor a lockout in force.
9. 878. The strike was postponed by Act No. 8/2001 until 1 April 2001, because of the capelin fishing season. It resumed on 2 April. At that time, the Mediation and Conciliation Officer had held more than 70 meetings with the parties which had referred the matter to him. On 9 May 2001 the VSFI reached an agreement with the LIU. This agreement contained provisions for determining the price of fish. The Government hoped that this collective agreement would pave the way for other agreements. The Government states that, from the declarations of the remaining parties to the dispute as well of the Mediation and Conciliation Officer, there was no chance that the issue would be settled through mediation. Further, the Officer’s view was that there was no basis on which he could make a compromise proposal. The Government explains therefore that it considered that all the possibilities of negotiation had been exhausted without any result; the strike was continuing and there was no indication of how long it could drag on. The Government states that it saw no other course of action but to take emergency measures to end the strike by enacting legislation.
   • Act No. 34/2001 and the ruling of the
   • District Court of Reykjavik
10. 879. The Government stresses that after a six-week strike, it had to limit the enormous damage that a longer strike would cause to the Icelandic economy. In this respect, the Government indicates that the life of people in small settlements, who base their subsistence on the fishing industry, was greatly affected by the strike and lockout, that the workers in fish factories started to be unemployed, that there were signs of the negative influence of the strike on the marketing of Icelandic fish products abroad; finally Icelandic export earnings were affected by the strike and this in turn contributed to the slide of the value of the Icelandic currency. In the Government’s view therefore there was an urgent necessity to bring the strike and the lockout to an end and to provide a reasonable and fair solution. The Government states that the fact that the SSI unions (with the exception of one) had called off their strike on 15 May does not change the fact that the lockout was maintained. The Act met with some resistance in the Althing, the general criticism being that the legislator had no right to intervene in an industrial dispute by introducing legislation thus infringing on the constitutional rights; criticisms were also addressed to the arbitration process provided for in the Act.
11. 880. In respect of the measures contained in the Act, the Government considers that the appointment of the members of the court of arbitration by the Supreme Court ensured the independence of the court. More specifically, the Government points out that the parties were given until 1 June 2001 to reach an agreement. The Supreme Court would appoint three persons to sit in a court of arbitration only if no agreement had been reached. The court’s mandate was to determine the wages and terms of the fishermen in the trade unions mentioned in article 1 of the Act, i.e. those trade unions of fishermen which were on strike and the vessel owners’ unions which maintained a lockout. Under article 3, the court of arbitration was to take into account certain elements in making its decision, i.e. the collective agreements that had been reached in recent months, to the extent they were pertinent to the issue under examination, the general trend of wages, and the special status of the parties referred to in article 1. The Government states that, in order to guarantee the independence of the court, it was left to the court to determine the other aspects of its decision and the duration of its validity.
12. 881. In practice, the Government explains that, since no agreement was reached by 1 June, the court of arbitration was established. The court at first made an ultimate attempt to mediate but to no avail. It then proceeded to render its decision and invited the parties to present their views in writing. Its decision was handed down on 30 July 2001.
13. 882. Concerning the ruling of the District Court of Reykjavik of 21 March 2002, the Government emphasizes the following points. The ASÍ submitted that Act No. 34/2001 was in contravention with articles 74 and 75 of the Constitution and in breach of various international treaties ratified by Iceland and in particular Conventions Nos. 87 and 98. The court recognized that there were cogent economic arguments supporting the Government’s assessments that the public interest was at stake when it decided to intervene to stop the strike. The court agreed that the trade unions which were not on strike and those which had not imposed a lockout were not bound by Act No. 34/2001. The Government states that it did not oppose the claim of the plaintiff in this respect as it had never been its intention to apply the Act to these unions. Further the court agreed with the ASÍ that the body established under the Act was not a proper court of arbitration in the legal sense but an administrative commission which had been given the authority to decide the outcome of the issue of fishermen’s wages. The court ruled that Act No. 34/2001 did not violate provisions of the Icelandic Constitution as interpreted in light, in particular, of the ILO Conventions.
    • Act No. 34/2001 and Conventions Nos. 87 and 98
14. 883. Turning to the compatibility of Act No. 34/2001 with Conventions Nos. 87 and 98, the Government firmly rejects the argument that the Act infringes the provisions of both Conventions. In this respect the Government refers to its arguments relating to the impact of the protracted strike on the economy. The Government stress that it has always placed great importance on collective bargaining for the determination of wages and terms. Further, in order to enhance the chances of successful negotiations, the Government has established an arrangement whereby the parties, if they so wish, can refer the matter to the Mediation and Conciliation Officer. These considerations explain why the Government waited for a long period of time before intervening in the strike. Referring to the conclusions of the Committee in Case No. 1768 as well as to paragraph 258 of the General Survey on freedom of association and collective bargaining, 1994, on which the conclusions were based, the Government stresses that, in the light of these documents, the authorities may be justified in intervening in disputes by establishing a court of arbitration when the negotiations have reached a deadlock. In this regard, the Government reiterates that this was the case in the matter brought before the Committee. Further, the lengthy strike had serious economic effects and everything had been attempted to help the parties reach an agreement. The Government utterly rejects the ASÍ’s contention that Act No. 34/2001 infringes paragraphs 1 and 2 of Article 3 of the Convention: freedom of association is guaranteed under the Icelandic Constitution and in no way can Act No. 34/2001 be construed as restricting the right of fishermen’s organizations to draw up their own rules or to organize their control and functioning.
15. 884. In its communication of 3 March 2003, the Government emphasizes once again the impact of the strike and the lock?out on the national economy. It recalls that the Icelandic system of collective bargaining has been developed in close cooperation with the social partners, in particular following comments made by the ILO on the functioning of the system. Finally, the Government points out that the trade unions which were not on strike and the unions of vessel owners that had not imposed a lock?out reached a collective agreement on 26 November 2002 which reflected the terms set out in the decision of the Court of Arbitration. The Government confirms that the court’s decision is valid until the end of 2003.

C. The Committee’s conclusions

1. 885. The Committee observes that the complainants and the Government’s versions are on the whole not contradictory concerning the events leading up to the adoption of Act No. 34/2001. The Committee notes that Act No. 8/2001 whereby the strike was postponed for two weeks is not challenged by the complainants. The Committee notes also the ruling of the District Court of Reykjavik of 21 March 2002 as reflected in the Government’s reply, as well as the judgement of the Supreme Court of 14 November 2002.
2. 886. The Committee observes that Act No. 34/2001 had the effect, on the one hand, to ban a strike caused by a difficult collective bargaining process and, on the other hand, to fix fishermen’s wages and terms through the imposition of an arbitration process. The Committee must therefore review whether Act No. 34/2001 is consistent with the provisions of Conventions Nos. 87 and 98.
3. 887. The complainants take the view that the adoption of Act No. 34/2001, banning the strike for a certain period, is in breach of Convention No. 87 and in particular of its Article 3; further the adoption of Act No. 34/2001 adds up to a series of interventions by the Government in legitimate strike actions. The Government for its part, insists that: (1) it had waited for a long period of time before it decided to intervene; indeed when Act No. 34/2001 was adopted the strike had lasted for six weeks; (2) the protracted strike had serious effects on the national economy; (3) all endeavours had been exhausted to have fishermen’s wages and terms determined through collective bargaining and the positions of the parties were irreconcilable. Further, the ASÍ contends that the measures provided under the Act are not proportionate to what the circumstances required. The Government contends that: (1) the appointment of a court of arbitration was a measure proportionate to what the circumstances required; (2) the aim of the law was to provide the parties to the dispute with a reasonable and fair solution.
4. 888. With respect to the Government’s reference to the Committee’s conclusions in Case No. 1768 (paragraph 29), the Committee has recognized, like the Committee of Experts on the Application of Conventions and Recommendations, that there comes a time in bargaining where, after protracted and fruitless negotiations, the authorities might be justified in stepping in when it is obvious that the deadlock in bargaining will not be broken without some initiative on their part [see General Survey on freedom of association and collective bargaining, 1994, para. 258]. That being said, the Committee is of the view that the mere existence of a deadlock in a collective bargaining process is not in itself a sufficient ground to justify an intervention from the public authorities to impose arbitration on the parties to the labour dispute. Public authorities’ intervention in collective disputes must be consistent with the principle of free and voluntary negotiations; this implies that the bodies appointed for the settlement of disputes between the parties to collective bargaining should be independent and recourse to these bodies should be on a voluntary basis [Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 858] except where there is an acute national crisis which, in the present case, the Committee was not in a position to determine.
5. 889. In the present instance, the Committee would like to make the following points. First, the Committee notes the declaration of the Government to the effect that it had never intended to apply Act No. 34/2001 to unions which were not on strike. The Committee notes however, from the complainants’ indications and the ruling of the District Court of Reykjavik, that the provisions of the Act did not clearly exclude unions which were not on strike from the application of the Act. The Committee notes that, in Case No. 1768, this issue had already arisen and that the Government had been requested “to refrain in future from having recourse to such measures of legislative intervention” [see para. 111 of its 299th Report]. The Committee also notes that the trade unions which were not on strike and the vessel owners that had not imposed a lock?out reached a collective agreement once the issue had been clarified by the District Court of Reykjavik and by the Supreme Court.
6. 890. Further, the Committee considers that the system established by law could not gain and retain the parties’ confidence as the nature of the arbitration body was unclear and the outcome of the process predetermined by legislative criteria. In this last respect, the Committee notes from article 3 of the Act that the arbitration body thus established was to take into consideration a number of elements and in particular the agreements on wages which were concluded recently as well as the general trend of wage matters. The Committee must note once again that it had already raised this issue on a similar legislative provision in Case No. 1768 and draws the Government’s attention to its conclusion set out in paragraph 110 of its 299th Report.
7. 891. Even if it considers that a work stoppage in the fishing industry can have important consequences on the economy, the Committee considers that such a stoppage does not endanger the life, personal safety or health of the whole or part of the population. For all these reasons, and while noting that the Act gave another two weeks to the parties to reach an agreement before the arbitration process would be set in motion, the Committee considers that the process set up by the law is not consistent with the principle of free and voluntary bargaining. The Committee makes this conclusion with concern since the arbitration body was to decide on the duration of the applicability of the collective agreement reached by the VSFI and the LIU to members in particular of FFSI and SSI.
8. 892. More generally, the Committee regrets to note that the adoption of Act No. 34/2001 is the third intervention of the public authorities in the collective bargaining process concerning fishermen’s wages and terms over a period of seven years. The Committee notes that there are recurrent difficult negotiations in this sector of activity and that these difficulties seem to be structural as they are linked to the determination of the price of the fish. The Committee also notes that the mediation and conciliation facilities did not enable the parties to reach an agreement and that this was not the first time that theses facilities had not been successful. The Committee notes that the public authorities have also made a number of legislative interventions in a series of other collective bargaining processes over the last 20 years, some of which had been brought to the attention of both the Committee and the Committee of Experts. The Committee refers in this respect to its conclusions in Cases Nos. 1458, 1563 and 1768. In Case No. 1563, and in particular in paragraph 376 of its 279th Report, the Committee had already noted that “over the past years, the Government has on several occasions had recourse to measures of intervention in collective bargaining. Indeed, in a previous case concerning Iceland [see 262nd Report, Case No. 1458, paras. 124 to 153, and in particular para. 148], the Committee had observed that there had been general legislative intervention in the bargaining process of no less than nine occasions in the last ten years. These interventions manifestly show the existence of difficulties in the industrial relations system”.
9. 893. In the Committee’s view these considerations point out that the Government should take concrete steps to avoid legislative interventions and to facilitate fully voluntary collective bargaining. The Committee is of the view that such steps are all the more necessary now that the current collective agreements on fishermen’s wages and terms declared applicable under Act No. 34/2001 are due to expire soon and that the same difficulties are very likely going to re-ignite. Therefore, it asks the government to review the national machinery and procedures concerning the collective bargaining process. The Committee draws the Government’s attention to the availability of the Office’s technical assistance.