Interim Report - Report No 236, November 1984

Case No 1267 (Papua New Guinea) - Complaint date: 26-MAR-84 - Closed

1. 579. In a communication dated 26 March 1984, the World Confederation of Organisations of the Teaching Profession presented a complaint against the Government of Papua New Guinea alleging the violation of trade union rights in Papua New Guinea. The Government supplied its observations in a communication dated 25 May 1984.
2. 580. Papua New Guinea has ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98); it has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) or the Labour Relations (Public Service) Convention, 1978 (No. 151).

A. The complainant's allegations

1. 581. In its communication dated 26 March 1984, the WCOTP expresses concern on behalf of its member, the Papua New Guinea Teachers' Association, with regard to the recent amendment to section 52 of the Public Service/Teaching Service Conciliation and Arbitration Act, which is contained in the Public Services Conciliation and Arbitration (Amendment) Act 1983.
2. 582. In particular, the complainant alleges that the amendment has two effects: (1) it states the reasons for which the Government may disallow a salary determination arrived at through conciliation and arbitration; and (2) it permits such disallowance at any time during the life of a salary agreement, whereas the original provision required such disallowance to be made within 14 days of its communication by the Minister to the National Executive Council.
3. 583. The complainant states that it considers the amendment to be undesirable and inappropriate on two grounds. first, in that it perpetuates a limitation of bargaining rights which was already in force under the original provision, which it holds to be unacceptable, i.e. by confirming the permanent power of the Government to review and veto a salary agreement or any part thereof. It points out that since the introduction of the amendment the power has already been exercised on two occasions. Secondly, the complainant is of the view that the removal by the amendment of the pre-existing 14-day time-limit, which in its opinion did at least ensure that a salary determination would be confirmed or vetoed within a known period of time, places salary agreements in permanent and unacceptable jeopardy.
4. 584. The complainant states further that the amendment permits the annulment of a salary determination at any time during the life of an agreement if the Head of State, acting on advice, considers the agreement to be "contrary to public policy" or "not in accordance with the best interest of Papua New Guinea" (these being the two grounds prescribed by the new subsection 52A(1) introduced by the amendment). The complainant argues that since the Government in power is the arbiter of the national interest and the author of public policy, it is clear that extraneous events such as a shift in policy within the National Executive Council or a change of government or an election could at any time lead to the invalidation of a salary agreement. It is the complainant's view that in these circumstances the only recourse or redress open to a union is to attempt to bring about political change, which it believes should not be the sole means of implementing a salary agreement.
5. 585. The complainant contends that the only amendment which would have satisfied the principle of collective bargaining which is fundamental to freedom of association would have been the repeal of all the subsections of section 52 of the Act which relate to disallowance of salary determinations; that the amendment which is the subject of the complaint makes a mockery of the whole machinery of conciliation and arbitration, confirmed and compounded in a modification of the procedures which amounts to a repudiation of the basic principle of law that pacts servanda sunt.

B. The Government's reply

1. 586. In its reply, the Government states that on 15 August 1983 the National Executive Council approved the drafting of amendments to allow the cancellation of registration of determinations under the Public Services Conciliation and Arbitration Act and the Teaching Services Conciliation and Arbitration Act. It states that it did so for a number of reasons which were based primarily on maintaining uniformity and upholding public interests.
2. 587. The Government explains that there are three statutes which set out the procedures for dealing with industrial disputes and the registration of industrial agreements, awards and determinations; the Industrial Relations Act, which relates essentially to the private sector; the Public Services Conciliation and Arbitration Act, which covers the public sector and certain prescribed statutory institutions; and the Teaching Services Conciliation and Arbitration Act, which deals with teachers.
3. 588. The first of these laws applies to 75 per cent of the workforce and contains a provision in terms of which the Head of State may disallow a registered Award or Agreement at any time where it is either against public policy or not in the best interest of Papua New Guinea; the object of the amendment to the second (which also applies with full effect to the third) was to insert such a provision in these laws, partly in order to introduce some measure of uniformity into the industrial laws and practices of the country.
4. 589. The Government goes on to state that a second major consideration leading to the amendments was that negotiations with the public sector unions were not proceeding as anticipated in relation to the Minimum Wage Board Determination which, in line with previous decisions, was to have established national "benchmarks" for wages and their method of adjustment; it was almost likely that an arbitration tribunal would have to be convened to determine the matter. It adds that the question of continuation of an agreement after its expiry date presented the possibility of a previous industrial agreement with public sector unions being left intact and therefore continuing to be in force; because the previous industrial agreement offered far more generous provisions on wage adjustments than those contained in the Minimum Wages Board Determination it would not have been in the best interest of Papua New Guinea, nor would it have been good industrial sense, to allow public servants including teachers to enjoy superior wage adjustment provisions than those applicable to the bulk of the workforce; to have done so would have placed the whole industrial scene under strain.
5. 590. The Government concludes by emphasising that, in its view, the amendments did not in any way infringe any ratified Conventions of the ILO; are fair; and do not directly infringe the bargaining rights of trade unions with employers.

C. The Committee's conclusions

1. 591. The Committee notes that the present case concerns statutory provisions which confer on the Government power to disallow awards or determinations relating to employees in the public service and the teaching service of Papua New Guinea.
2. 592. The Committee notes further that these powers existed, until repealed and replaced in 1983, in terms of section 52 of the Public Services Conciliation and Arbitration Act, which provided as follows;
3. 52. Submission and disallowance of determinations
4. (1) When a determination has been registered under section 51, the Registrar shall, without delay, send to the Minister by registered post a certified copy of the determination.
5. (2) As soon as practicable after its receipt, the Minister shall cause the certified copy of the determination, together with any statement of the Chairman of the Tribunal under section 43(3), to be submitted to the National Executive Council.
6. (3) The Head of State, acting on advice, may within 14 days after the submission under subsection (2) of a determination, disallow it or part of it.
7. (4) Where the Head of State, acting on advice, has disallowed under this section a determination or part of a determination, the determination or the part' disallowed, as the case may be, shall not come into operation and has no force or effect.
8. (5) Notification of the disallowance or otherwise by the Head of State, acting on advice, of a determination shall be published in the National Gazette.
9. 593. The amendment in terms of which the above section was repealed substituted for that section: (1) a new section 52, concerning submission of determinations, which is identical to the first two subsections cited above; and (2) added a new section 52A, which provides as follows:
10. 52A. Disallowance of determination
11. (1) The Head of State, acting on advice, may at any time disallow a determination or any part of it on the grounds that it
    • (a) is contrary to public policy; or
    • (b) is not in accordance with the best interests of Papua New Guinea.
12. (2) Notice of disallowance of a determination or part of a determination shall be published in the National Gazette and the determination or part of it ceases to have effect on the publication of the notice.
13. (3) The disallowance of a determination or of part of a determination
    • (a) does not affect any right or liability accrued or incurred before the date of the publication of the disallowance; and
    • (b) revives as from the date of publication of a notice of disallowance, any determination that was, wholly or in part, superseded or revoked (whether expressly or impliedly) by the disallowed determination.
14. 594. It would appear from an examination of these texts that three principal changes were introduced as a result of the amending legislation, namely. (1) the elimination of the time period of 14 days during which disallowance of an award or determination could take place, and its replacement in section 52A(1) with a provision empowering such a disallowance to be made at any time; (2) the introduction, in the same subsection, of two grounds on either or both of which any disallowance must be based; and (3) the specification in section 52A(3) of additional effects which follow upon the issuing of a notice of disallowance, over and above that contained in section 52A(2) (which simply repeats the earlier provision in the old section 52(4)).
15. 595. The Committee considers that the first of these changes undoubtedly has the effect of broadening the powers permitting the disallowance of awards and determinations, by removing the time-limit during which it was permissible for them to be made, and notes that under the amended provision this could occur in respect of awards or determinations already in force.
16. 596. The Committee notes the Government's explanation that one of the main reasons for the introduction of the amended provisions is a wish to place all employees, in the public as well as in the private sectors, on the same footing; and it notes that the new provisions are in fact identical to those which apply to the latter in terms of section 42 of the Industrial Relations Act. It would point out in this regard that it has long been the view of the Committee that Convention No. 98, and in particular Article 4 thereof, concerning the encouragement and promotion of collective bargaining, applies both to the private sector and to public bodies, it being possible to exclude from such application only public servants engaged in the administration of the State [141st Report, Case No. 729 (Bangladesh), para. 15.], a term which it has attempted to define closely over the years so as to restrict its use in respect of those categories of public officials to whom it may strictly be applied.
17. 597. The Committee has also taken note of the Government's explanation of the second major reason for the introduction of the amending legislation, namely that negotiations with public sector unions were not proceeding as anticipated in relation to the Minimum Wage Board Determination which it had expected to provide benchmarks for wage levels. The Committee has considered in the past cases where intervention by the public authorities was essentially for the purpose of ensuring that the negotiating parties subordinate their interests to the national economic policy pursued by the Government, irrespective of whether they agree with that policy or not. It was of the opinion that such situations were not compatible with the generally accepted principles that workers' and employers' organisations should enjoy the right freely to organise their activities and to formulate their programmes, that the public authorities should refrain from any interference which would restrict this right or impede the lawful exercise thereof, and that the law of the land should not be such as to impair or be so applied as to impair the enjoyment of such right. [65th Report, Case No. 266 (Portugal), para. 70.]
18. 598. The Committee observes that the Government's statement seems to reinforce the conclusion that the Government's dissatisfaction with the negotiations meant that it was also not content to permit the collective bargaining process to continue in the manner previously prescribed. In the view of the Committee by choosing to do so through the strengthening of its power to reject completely at its own discretion and at any time awards or determinations, the Government acted in a manner which impairs the principles of free collective bargaining which is not consistent with the obligation established by Article 4 of Convention No. 98, "to encourage and promote the full development and utilisation of machinery for voluntary negotiation between employers and employers' organisations and workers' organisations, with a view to the regulation of terms and conditions of employment by means of collective agreements". The Committee expresses the hope that the Government will inform it of steps taken to remedy this situation.
19. 599. In this connection, the Committee notes with some concern the Government's further statement that it was the near likelihood that the matter under negotiation would have to be referred to arbitration which was also a consideration in its decision to enact the amending legislation. Article 8 of Convention No. 151 establishes quite clearly that "the settlement of disputes arising in connection with the determination of terms and conditions of employment shall be sought, as may be appropriate to national conditions, through negotiations between the parties or through independent and impartial machinery, such as mediation, conciliation and arbitration, established in such a manner as to ensure the confidence of the parties involved". Accordingly, the Committee expresses the hope that the Government will avail itself of all possible avenues for the resolution of disputes concerning terms and conditions of employment within the public service and the teaching service, including, where necessary, referral to independent and impartial machinery for arbitration.
20. 600. Regarding the second of the changes introduced by the amendment, i.e. the insertion of two grounds on which disallowance of awards and determinations may take place, the Committee would observe, that the specification of grounds on which government action must henceforth be based could be viewed as a limitation on the Government's power to disallow awards and determinations, especially since there was no reference at all in the previous legislation for grounds to be cited as the foundation of government action. The Committee considers, however, that the broad and general nature of each of the two grounds incorporated through the amendment might serve in a contrary sense, so as to widen the scope for government action, and it therefore expresses the hope that the Government will take due account when exercising its powers of the principles of freedom of association in general and in particular of those embodied in Convention No. 98 concerning the promotion of voluntary collective bargaining. The Committee draws attention in this regard to its view that where legislation implies that the filing of a collective agreement may be refused on grounds such as incompatibility with the general policy of the Government, it would amount to a requirement that prior approval be obtained before a collective agreement can come into force, and would infringe the principles of voluntary negotiation laid down by the aforementioned instrument. [85th Report, Case No. 341 (Greece), paras. 185 and 186.]
21. 601. Finally, the Committee has taken note of the statement in the Government's reply concerning the continuation of agreements previously in force. In this connection, the Committee recalls and reiterates the view it has already expressed on another occasion that a legal provision which could be applied so as to supersede the conditions laid down in collective agreements or to prevent the workers from negotiating such conditions as they wish in future collective agreements, would infringe the rights of the workers concerned to bargain collectively [15th Report, Case No. 102 (South Africa), para. 105]. It notes, however, that the third of the new provisions introduced by the amending legislation, as contained in section 52A(3), would appear to have the effect of both preserving rights acquired before the publication of a notice of disallowance and of reviving antecedent agreements which may have been superseded or modified by an award or determination which has been disallowed. As a result, it would appear that in the present case the benefits enjoyed by employees in the public and teaching services would continue after disallowance of any new award or determination. In the circumstances, the Committee is of the view that it need give no further consideration to this aspect of the matter, although it recommends that the legislation in question be drawn to the attention of the Committee of Experts on the Application of Conventions and Recommendations which might wish to examine its wider implications.

The Committee's recommendations

1. 602. The Committee recommends the Governing Body to approve this interim report, and in particular the following conclusions.
   • (a) the strengthening of the Government's powers to reject completely at its own discretion and at any time awards or determinations impairs the principles of free collective bargaining in a manner which is not consistent with the obligations established by Article 4 of Convention No. 98. The Committee expresses the hope that the Government will inform it of steps taken to remedy this situation;
   • (b) the Committee expresses the further hope that the Government will avail itself of all possible opportunities for the resolution of disputes concerning terms and conditions of employment within the public service and the teaching service including, where necessary, referral to independent and impartial machinery for arbitration;
   • (c) the Committee recommends that the legislation in question be drawn to the attention of the Committee of Experts on the Application of Conventions and Recommendations for examination as to its wider implications.