Report in which the committee requests to be kept informed of development - Report No 270, March 1990

Case No 1498 (Ecuador) - Complaint date: 29-MAY-89 - Closed

1. 141. The complaint of the International Union of Food and Allied Workers' Associations (IUF) is contained in a communication dated 29 May 1989. The Government sent its observations on this matter in a communication dated 27 September 1989.
2. 142. Ecuador has ratified both 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. A. The complainants' allegations

• The complainant's allegations
  143. 143 The International Union of Food and Allied Workers' Associations (IUF) submits a complaint of violation of trade union rights against Ecuador concerning events that affected one of its members, the National Brewery Workers' Trade Union (SA).
  144. 144 According to the complainant organisation, a long-standing labour dispute at the enterprise of national breweries in Guayaquil had ended, from the legal standpoint, by a final ruling handed down on appeal by the conciliation and arbitration court which stated that the strike held by the workers during the aforementioned dispute had been legal and lawful. According to the IUF, the court's ruling became enforceable under law on 1 March 1989 but the enterprise did not adhere to it.
  145. 145 Given this situation, a large number of workers who were not reinstated went on hunger strike in front of the Parliament and seat of the Government in Quito, and in front of the Law Courts in Guayaquil. Following promises made to them by the public authorities to solve the matter quickly, they ended their strike action.
  146. 146 The enterprise then decided that work would resume, subject to the closure of one of its establishments in Guayaquil; however, it made the application of the court ruling dependent upon a restructuring that had not been discussed during the labour dispute - and therefore not examined when the aforementioned legal ruling had been handed down.
  147. 147 The IUF goes on to say that the management then flouted the laws of the country once again by unduly dismissing six expressly named workers, five of whom were officials of the aforementioned trade union, i.e. the secretary-general and several trade union secretaries.
  148. 148 In concluding, the IUF considers that these irregularities not only infringe the collective labour agreement and the Labour Code of Ecuador but also international labour Conventions of the ILO ratified by Ecuador. Consequently, the complainant organisation submits a formal complaint against the Government and encloses a vast amount of documentation to support the allegations, including legal decisions relevant to the Labour Code, extracts from the collective agreement, letters of dismissal sent to the five trade union officials and the trade union member, the legal rulings handed down in this respect on 22 December 1988 and 17 February 1989 and the press cutting from the newspaper La Hora of 9 May 1989 describing the issue.
  149. 149 It appears from this documentation, and in particular from the ruling handed down by the conciliation and arbitration court on 17 February 1989 on appeal by the employers, that the judges in Guayaquil confirmed that the strike had been legal and that the workers should be reinstated in their jobs.

B. The Government's reply

1. 150. In its very detailed communication of 27 September 1989, the Government explains that, contrary to the allegations of the complainant organisation, there was no violation of freedom of association in this matter because:
2. (1) the public authorities heard the workers' request and the legal procedures were conducted accordingly;
3. (2) the case was heard by a lower court and a court of appeal;
4. (3) an appeal was lodged against the ruling of the lower court; and
5. (4) the court of appeal, specifically protecting the workers' interests and the exercise of their trade union rights, ruled that the strike was "legal and lawful" with all the legal repercussions this had for the strikers.
6. 151. The Government goes on to say that the initial ruling upheld four of the six points contained in the claim submitted by the workers; it rejected one because it was fundamentally unsound and accepted in part the last point, to the effect that the workers should receive their pay for the duration of the strike and made the respondent responsible for the legal costs.
7. 152. This first legal ruling of 22 December 1988 represented the majority decision of the workers' representatives and the labour inspectorate presiding over the court; the employers' representatives expressed a dissenting opinion but nevertheless confirmed the legality of the strike.
8. 153. The ruling of the higher court, handed down on 17 February 1989, upheld all the points of the previous ruling, confirming the lawfulness and legality of the strike and ordering the employer to pay the costs. According to the Government, this ruling proclaimed and protected the principle of the full exercise of freedom of association and the right to strike.
9. 154. The Government also states that the legal rulings were handed down quickly in this case.
10. 155. As regards the enforcement of the final ruling of the court of conciliation and arbitration, the Government explains that the delays incurred were due to the following reasons:
11. (1) In Ecuador, factories, workshops and other premises in the enterprise are occupied during the strike. In the present case, this meant that the lists and other documents belonging to the enterprise were not available until the installations and offices had been handed back to it, which meant that the beginning of the settlement was delayed.
12. (2) The preliminary examination of the experts' report, which had been ordered for the enforcement of the ruling, came up against a number of problems.
13. (3) The parties intervened in the proceedings by making observations on and objections to the experts' report, which dragged out the enforcement stage of the ruling.
    • However, the public authorities issued the enforcement order of the legal ruling on 4 May 1989.
14. 156. The enforcement order was in keeping with the experts' report and demanded that the enterprise deposit, within 24 hours, a sum of 285,574,402 sucres and 75 centimes (the exchange rate for January 1990 was about 100 sucres for US$0.20). This order specified the way this sum should be distributed, including very high compensation to the works council and the trade union federation to which this works council belonged.
15. 157. Most of the sum the enterprise was required to pay was earmarked for the payment of the days the workers had been on strike, i.e. 204,274,703 sucres. The enterprise deposited this sum with the Guayas labour inspectorate on 12 May 1989. The Government also submits a copy of the lists of payments and signatures of workers who received their compensation. It explains that a number of these workers did not come forward to receive the sum owed to them.
16. 158. As regards this aspect of the complaint, the Government, although acknowledging that the legal ruling was enforced with a certain delay, refutes the allegation that this ruling was not enforced by the enterprise.
17. 159. As regards the hunger strike that a number of workers carried out to obtain the enforcement of the legal ruling, the Government merely states that this type of action is not covered by legislation but that the authorities are not opposed to such public demonstrations.
18. 160. As regards the allegation that the enterprise made it a condition that work would only be resumed if one of its establishments in Guayaquil was closed, which meant that the application of the legal decisions was subject to a restructuring which had not been an issue during the labour dispute and had therefore not been discussed when the aforementioned legal ruling had been adopted, and as regards the undue dismissal of six workers, including five trade union officials, the Government admits that:
19. (1) the enterprise did not immediately resume work after the legal ruling which ended the dispute;
20. (2) the enterprise closed one of its establishments;
21. (3) the enterprise unduly dismissed six workers, including five trade union officials.
22. 161. However, the Government explains that the enterprise did not resume its activities immediately after the legal ruling because its factories had suffered considerable damage as a result of the dispute; furthermore, the reason it decided to close down one of its establishments that dated from the beginning of the century was due to its dilapidated state which made it unprofitable. Finally, the Government explains that the enterprise decided to dismiss the majority of its workers to be able to comply with the aforementioned decisions.
23. 162. According to the Government, there is no law, collective agreement, contract or legal ruling that can oblige an employer to keep a factory operating or to continue business against his will. In a democratic system, the law does not provide for coercive legal measures to impose obligations of this nature on individuals. It only requires that the employer compensate for the legal and economic repercussions of his decision to close.
24. 163. The collective labour agreement binding the enterprise and the works council and which was in force until November 1989, allowed for the possibility of installations being closed down, provided that the workers affected by the closure were paid a sum in sucres equivalent to the corresponding compensation for dismissal without notice laid down in the collective agreement i.e., for workers under permanent contract, 85 per cent of their remuneration for two years, the compensation provided for in the Labour Code (sections 181, 185 and 189) and 53 months of special compensation pay. Furthermore, the Government communicates the contents of sections 188 and 189 of the Labour Code:
    • Section 189 of the Labour Code regulates the case of dismissal without notice and stipulates that:
    • An employer who dismisses an employee without due notice shall be required to pay him compensation corresponding to his length of service, at the following rates:
      • - up to two years' service, the equivalent of two months' remuneration;
      • - between two and five years' service, the equivalent of four months' remuneration;
      • - between five and 20 years' service, the equivalent of six months' remuneration; and
      • - over 20 years' service, the equivalent of 12 months' remuneration.
    • The compensation shall be calculated on the basis of the remuneration that the employee was receiving at the time of his dismissal, without prejudice to the payments due in case of termination with notice ...
    • Section 188, which contains guarantees for trade union officers, stipulates that:
    • It shall not be lawful for the employer to dismiss without notice or give notice of termination to an employee who is a member of the managing committee of the employees' organisation. If he does so, he shall pay the employee compensation equal to the latter's remuneration for one year and shall not prevent the employee from continuing to be a member of the managing committee until expiry of the period for which he was elected.
    • The protection afforded by this section shall cover the period during which the committee member acts as such and one year thereafter ...
    • The amount of the above-mentioned compensation shall be divided equally between the employee and the organisation to which he belongs.
    • If the employer fails to pay the above compensation for up to one month, the employee may demand payment through the courts of law; if judgement is given against the employer, he shall pay, in addition to the compensation, a further sum equal to half thereof, which shall be credited to the employee exclusively ...
    • The foregoing shall not prevent the employer from terminating the contract for the reasons mentioned in section 171.
25. 164. In its reply, the Government stresses that the reasons for which the employer may terminate a contract of employment, after having notified the labour inspector in accordance with section 171, includes amongst others the fact that the worker has been found guilty of grossly insulting behaviour towards the employer.
26. 165. It concludes that the Ecuadorian legal system does not make provision for absolute stability but that it only provides for relative stability in employment, adding that the dismissal of workers is forbidden and punished by law but that, in practice, if an employer is prepared to pay the considerable sum of the economic penalty arising from an infringement of the ban on dismissal, once the punishment has been meted out and the penalty paid, the person having committed the offence has paid his debt to society.
27. 166. The Government adds that most enterprises could not pay the vast costs they would incur if they dismissed their workers and that, generally speaking, this makes the ban effective.
28. 167. It also states that as a result of the sum paid by the employer in this case, the labour dispute became known throughout the country as "the dance of millions"; indeed, 10 million sucres were equivalent to 20 years of minimum wages for this industry on the date of settlement and 30 years of minimum wages on the date the court of the first instance met to examine this case.
29. 168. Furthermore, the Government points out that when the legal decisions handed down in this case were being adopted, the labour authorities presiding over the court prevented the views of the employers' representatives - who wanted to reject all the workers' claims and to refuse them the payment of their day of strike - from prevailing and backed the points of view of the workers' representatives. Consequently, according to the Government, it is unfair - to say the least - to state that the authorities' action infringed freedom of association.
30. 169. The Government encloses a considerable amount of documentation with its reply, including the text of section 497 of the Labour Code which provides that employees are entitled to receive their full remuneration for the days of the strike unless: the tribunal decides otherwise; the employees' demands are rejected in the award; or, the employees declare a strike in circumstances not covered by the provisions of the Labour Code.
31. 170. The Government also encloses an extremely long list of workers who received their remuneration for the days of the strike, as well as of their compensation for dismissal.
32. 171. In concluding, the Government considers that having produced all this evidence, the complainants can no longer continue with their complaint. It therefore requests the Committee to decide that the allegations of the IUF are unfounded and arbitrary and that the case should be closed.

C. The Committee's conclusions

1. 172. The Committee notes the observations and detailed information provided both by the complainant organisation and by the Government concerning this case of anti-trade union reprisals.
2. 173. The Committee, for its part, notes that the national legislation contains provisions protecting the exercise of the right to strike, most specifically section 497 of the Labour Code which stipulates that employees are entitled to receive their full remuneration for days of the strike, unless the tribunal decides otherwise, the employees' demands are rejected in the award or unless the employees declare a strike in circumstances not covered by the law. Furthermore, as regards their return to work, section 496 of the Labour Code provides that except in the case of an unlawful strike, all workers shall return to their posts upon termination of the strike and that their employment shall be guaranteed for one year, during which time they may not be dismissed except for reasons specified in section 171. Section 496 also stipulates that this condition shall be deemed binding on the employer and regarded as part of the settlement or reward, even if not expressly mentioned.
3. 174. In the present case, the Government states that the strike was declared legal and lawful and that the workers were paid during the days of strike. It nevertheless adds that the employer had to close one of its establishments for economic reasons, and that it took this opportunity of shutting down one of its establishments by paying the workers concerned a sum equivalent to the far-reaching compensation to be paid in the case of undue dismissals laid down in the collective agreement. The Government also explains generally that the employer may terminate a labour contract under section 171 of the Labour Code, if the worker is found guilty of grossly insulting behaviour towards the employer. However, the Government does not give any example in this respect.
4. 175. The Government merely confirmed in general terms the specific allegation of the complainant organisation concerning the dismissal of five trade union officials, including the secretary-general of the trade union particularly named by the complainant organisation.
5. 176. In the Committee's view, there are two aspects to this case. The first concerns the strike itself. The Committee notes that this strike was declared legal by the courts and that furthermore, in accordance with the legal rulings, the enterprise paid the days of the strike, but with a certain delay. In these circumstances, the Committee considers that this aspect of the case does not call for further examination.
6. 177. The second aspect of this case involves the dismissal with compensation of a large number of workers, including five trade union officials. According to the Government, these dismissals took place because an establishment, no longer profitable due to its dilapidated state, was closed down. Whilst noting the explanations provided by the Government, the Committee feels nevertheless bound to point out that these dismissals took place immediately after the strike. The link between these dismissals of workers - in particular, of trade union officials - and the strike cannot be dismissed a priori.
7. 178. In this respect, the Committee wishes to recall that acts of anti-trade union discrimination should not be authorised under the pretext of dismissals based on economic necessity (see Digest of decisions and principles of the Committee on Freedom of Association, third edition, 1985, para. 549). It must also draw the Government's attention to the fact that the Workers' Representatives Recommendation, 1971 (No. 143), mentions, amongst the measures to be taken to ensure effective protection to these workers, that recognition of a priority should be given to workers' representatives with regard to their retention in employment in case of reduction of the workforce (article 6(2)(f)). The Committee also considered that it would not appear that sufficient protection against acts of anti-union discrimination, as set out in Convention No. 98, is accorded by legislation which enables employers in practice - on condition that they pay the compensation prescribed by law for cases of unjustified dismissal - to get rid of any worker, even if the true reason is his trade union membership or activities (see Digest of decisions, para. 547).
8. 179. Furthermore, the Committee has also stressed that the existence of basic legislative provisions prohibiting acts of anti-union discrimination is not sufficient if these provisions are not accompanied by effective procedures ensuring their application in practice (see Digest of decisions, para. 567). Consequently, the Committee recalls that complaints against acts of anti-union discrimination should normally be examined by national machinery which, in addition to being speedy, should not only be impartial but also be seen to be such by the parties concerned, who should participate in the procedure in an appropriate and constructive manner (see Digest of decisions, para. 570).
9. 180. There is not enough information in the file to determine whether the dismissed trade union officials referred their case to the judicial bodies or not. Nevertheless, taking into account the principles recalled above and also the provision in the national legislation which stipulates that workers, in the case of a lawful strike, shall be guaranteed their employment for one year, during which time they may not be dismissed except for reasons specified in section 171 of the Labour Code, the Committee requests the Government to keep it informed of developments in the situation of the five trade union officials dismissed in this case and to point out in particular whether their case has been brought before the courts and, if so, to provide the texts of the judgements.

The Committee's recommendations

1. 181. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee stresses the importance it attaches to the principles whereby workers should benefit from adequate protection against all acts of anti-trade union discrimination, including protection ensuring employment stability.
   • (b) The Committee requests the Government to keep it informed of developments in the situation of the five dismissed trade union officials expressly named by the complainants and to indicate in particular whether their case has been brought before the courts and, if so, to provide the texts of the judgements.