Definitive Report - Report No 279, November 1991

Case No 1585 (Philippines) - Complaint date: 29-MAY-91 - Closed

1. 119. The Federation of Free Farmers (FFF) presented a complaint of violation of trade union rights against the Government of the Philippines in communications dated 29 May and 3 July 1991.
2. 120. The Government supplied its comments in a communication dated 12 August 1991.
3. 121. The Philippines have ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), and the Rural Workers' Organisations Convention, 1975 (No. 141).

A. The complainant's allegations

1. 122. In its communication of 29 May 1991, the FFF alleges that various provisions of the Philippine Labor Code violate Conventions Nos. 87 and 141. The provisions in question are:
2. - sections 241(c) and (p) which require that local and national officers be elected directly by secret ballot;
3. - section 241(j) which provides for the automatic cancellation of union registration for non-submission of financial reports; and
4. - section 3, paragraph (d), Rule II, Book V, which requires federations and national unions to organise direct members into locals or chapters.
5. 123. As regards the first issue, sections 241(c) and (p) of the Labor Code read as follows:
6. (c) The members shall directly elect their officers in the local union, as well as their national officers in the national union or federation to which they or their local union is affiliated, by secret ballot at intervals of five (5) years. No qualification requirements for candidacy to any position shall be imposed other than membership in good standing in subject labor organizations. The secretary or any other responsible union officer shall furnish the Secretary of Labor and Employment with a list of the newly elected officers, together with the appointive officers or agents who are entrusted with the handling of funds within thirty (30) calendar days after the election of officers or from the occurrence of any change in the list of officers of the labor organization.
7. ...
8. (p) Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or expulsion of an officer from office, whichever is appropriate.
9. 124. The complainant alleges that these provisions constitute an abridgement of the right of freedom of association and violate Articles 2, 3, 4 and 8(2) of Convention No. 87 and Articles 3, 4 and 5 of Convention No. 141. It quotes the 1983 General Survey by the Committee of Experts on the Application of Conventions and Recommendations, Freedom of Association and Collective Bargaining:
10. The Committee considers that legislation which regulates in detail the internal election procedures of trade unions is incompatible with the rights of trade unions recognised by Convention No. 87. There is reason to believe that detailed regulation of trade union elections, by legislation which prescribes specific rules on the subject, limits the right of organisations to elect their representatives in full freedom and may constitute a kind of a priori supervision of the electoral procedure, making it easier for the public authorities to intervene in the voting process (para. 172).
11. 125. The FFF is a duly registered national labour organisation whose members are rural workers located in numerous villages in many provinces of the Philippines archipelago, consisting of more than 7,000 islands. The FFF's subdivisions are the village locals, the provincial associations, regional offices and, finally, the national office. Since most villages are located kilometres away from the towns, and municipalities and provinces are often hundreds of kilometres away from each other, it is physically and morally impossible to hold direct elections by its thousands of members of all officers on various levels, especially the provincial, regional and national, on any single day or period, particularly if the elections have to be by secret ballot. Most of the FFF's members are self-employed (tenants, sellers, owner-cultivators, fishermen) and farm employees, including the shifting landless farmworkers, who live and work in the villages. They are widely scattered because they work on lands that are distant from each other. They cannot sufficiently know their provincial, regional and national officers or candidates. It is impossible to assemble the thousands of members hundreds of kilometres distant from each other in one place to hold elections, especially on a provincial, regional or national level, due to severe difficulties in rural communication and transportation, exacerbated by periodic natural calamities such as typhoons.
12. 126. Assuming that such elections were to be held in different places within a given date or period, such a process would be very costly, cumbersome and impossible to supervise and coordinate. In addition, there are the problems of accreditation, authentication and canvassing of votes in all the units simultaneously. If elections are held on different dates, there is the added problem of meeting the deadline of 30 days within which to report the newly elected and appointed officers to the Secretary of Labor and Employment.
13. 127. It is for the foregoing reasons that elections in the FFF beyond the village level are conducted through delegates, as provided for in the FFF's constitution and by-laws. However, adherence to this constitutional policy runs counter to the direct election clause in the Labor Code; hence, any election by delegates would, in all likelihood, be deemed illegal and invalid. Clearly, then, the effect of the direct election provision of the Philippine Labor Code is to put the FFF and many similarly situated labour organisations in a legal dilemma, leading to their paralysis and ultimate extinction.
14. 128. Concerning the second issue, section 241(j) of the Labor Code reads as follows:
15. Every income or revenue of the organization shall be evidenced by a record showing its source, and every expenditure of its funds shall be evidenced by a receipt from the person to whom the payment is made, which shall state the date, place and purpose of such payment. Such record or receipt shall form part of the financial records of the organization.
16. Any action involving the funds of the organization shall prescribe after three (3) years from the date of submission of the annual financial report to the Department of Labor and Employment or from the date the same should have been submitted as required by law, whichever comes earlier: Provided, that this provision shall apply only to a legitimate labor organization which has submitted the financial report requirements under this Code; Provided, further, that failure of any labor organization to comply with the periodic financial reports required by law and such rules and regulations promulgated thereunder six (6) months after the effectivity of this Act shall automatically result in the cancellation of union registration of such labor organization.
17. 129. The FFF alleges that these detailed prescriptions regarding the financial operation of labour organisations are an undue interference in the internal affairs of labour groups and violate Article 3 of ILO Convention No. 87, affirming the right of organisations to draw up their rules and to run their affairs without interference from the public authorities. Furthermore, the provision for the automatic cancellation of the registration of a labour organisation for failure to submit required financial reports goes against due process and violates Article 4 of ILO Convention No. 87, which provides that workers' organisations should not be liable to be dissolved by administrative authority.
18. 130. As regards the third issue, the FFF points out that section 3, paragraph (d) of Rule II, Book V, of the Philippine Labor Code requires existing labour federations or national unions with direct members to organise said members into locals or chapters in their respective companies or establishments within 60 days from the coming into force of the rules.
19. 131. According to the FFF, this violates Article 3 of Convention No. 87, which provides that workers' organisations shall have the right to draw up their constitutions and rules and to organise their administration and activities, without any interference from public authorities. It also goes against Article 3, paragraph 2, of ILO Convention No. 141, which provides that the principles of freedom of association shall be fully respected and that rural workers' organisations shall remain free from all interference. In addition, this regulation runs counter to Articles 5 and 6 of Convention No. 141, which both call for the elimination of legislative and administrative impediments to the establishment and growth of rural workers' organisations.
20. 132. There are various and valid easons for labour federations or national unions to maintain direct individual membership, which policy is well within the rights of the unions and their membership to decide. Moreover, this regulation may be more readily applicable to labour organisations in the non-agricultural sector, whose members are employees and can be more easily grouped according to their company or place of work. In the case of the FFF and other organisations with a mixed or predominantly self-employed membership, the organisational structure would vary according to geographical affinity rather than identity of employers, since it would be a more important consideration in forming members into specific chapters or organisational units. In any case, the labour organisation directly concerned is in the best position to know the appropriate structure for it.
21. 133. In its further communication of 3 July, the FFF indicates that, during its 8 June 1991 meeting in Quezon City, the National Policy Board of the FFF, citing the physical impossibility of complying with the direct election requirement of the Labor Code, unanimously approved a resolution postponing indefinitely the FFF National Convention until the law is amended to enable the organisation to comply with it. During the same meeting, which was attended by FFF regional and provincial leaders from all over the Philippines, the chapters represented reported the difficulties which also made it impossible to observe the "direct election" rule at the provincial level, including the following: the huge costs and administrative burden of informing hundreds/thousands of widely dispersed rural worker members, then assembling and processing them in one or several central locations throughout a province; poor or non-existent communication, transportation and other facilities; unstable peace and order conditions; and natural calamities in many areas.
22. 134. The Board as well as the national and local officers of the FFF present agreed that the entire organisation has been placed in a general state of uncertainty and paralysis brought about by the aforementioned provision. Moreover, an informal survey conducted by the FFF among other national unions and federations during the past two years revealed that these organisations (mostly commercial, industrial and service-based) foresaw tremendous difficulty, if not impossibility, in following the direct election requirement. The only group that managed to have a direct election was a national union of hotel and restaurant workers. According to its president, the union still experienced severe financial and administrative problems despite the fact that most of its locals are based in Manila.
23. 135. In summary, the FFF alleges that there is a permanent "Damocles' sword" over labour organisations (especially those that may be deemed less friendly to an incumbent administration) since the legitimacy of conventions/elections can always be questioned and their results likely to be nullified, which is confirmed by the statement of the Labor Department Legal Services in the letter dated 3 November 1989 addressed to the FFF.
24. B. The Government's reply
25. 136. In its communication of 12 August 1991, the Government states its firm belief that the concerns expressed by the FFF are unfounded. It points out that the provisions in question are applicable to and intended to cover only trade unions - unions with specific employers or unions of workers in the formal sector - and not to organisations of rural workers and of itinerant, ambulant and self-employed workers such as the members of the complainant federation. According to the Government, this flows particularly from section 212(g) of the Labour Code, which reads as follows: "Labor organisation means any union or association, which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment" (emphasis added).
26. 137. In addition, the Government points out that in actual implementation section 241(c) is treated as a directive and is not mandatory. Neither is the cancellation of union registration for non-submission of financial reports treated as automatic. The Bureau of Labor Relations (the agency of the Department of Labor and Employment directly in charge with matters relating to labour organisations) institutes cancellation proceedings only after at least two reminders have been sent to the unions and they still fail to comply with the requirement. In the cancellation proceedings, unions are given the right to explain and defend themselves. The same is also true with section 3(d) of Rule II, Book V, of the Code which is merely directive.
27. 138. The Government points out in conclusion that the foregoing provisions are the product of tripartite consultations, but that it is mindful of the deficiencies noted by the Committee of Experts and of its obligation to take steps to ensure that future amendments meet the requirements of Convention No. 87.

C. The Committee's conclusions

1. 139. The Committee notes that the complainant in the present case criticises the provisions in the Philippines Labour Code which: require that local and national officers of labour organisations be elected directly by secret ballot (sections 241(c) and (p)); require that federations and national unions organise their direct members into local chapters (Book V, Rule II, section 3(d)); and provide for the automatic cancellation of union registration for non-submission of financial reports (section 241(j)). The complainant alleges that the first provision mentioned above, as applied to the particular circumstances, prevents the FFF from functioning in practice since all elections held through delegates may be nullified; it further argues that the other two provisions constitute undue interference in the internal affairs of the Federation.
2. 140. In its brief comments of 12 August 1991, the Government does not really take issue with the substance of the complainant's allegations but replies in very general terms that: (a) it does not consider the FFF as being a labour organisation within the meaning of the Code, which implies that said provisions would not be applicable to it; and (b) all these provisions, in any event, are directive and not mandatory.
3. 141. The Committee notes from a general point of view that the FFF has a mixed membership, most of whom, according to the complainant's own statements, are self-employed. The Committee recalls that they are not only covered by Conventions Nos. 87 and 98, but also are entitled to the guarantees provided for in Convention No. 141, since Article 2 of that instrument defines rural workers as "any person engaged in agriculture, whether as a wage earner or ... (subject to certain restrictions) as a self-employed person".
4. 142. As to the indicative nature of the provisions challenged by the complainant, the Committee notes that three of them are clearly worded in mandatory terms and that the consequences can be very drastic under section 241(p), namely cancellation of union registration or expulsion of an officer from office. Therefore, there exists a risk that the above-mentioned provisions be construed as mandatory by the administrative or judicial authorities, as evidenced by the example below.
5. 143. As regards the direct election requirement, the Committee notes that, whilst the Government states that the provisions in question are only intended to cover trade unions in the formal sector and not organisations such as the complainant federation, the Director of Legal Services of the Department of Labor and Employment implicitly considered that the FFF was subject to sections 241(c) and (p) since, in his letter of 3 November 1989 to the FFF, he expressly stated: "... union officers must be directly elected by the members thereof, inasmuch as the framers of R.A. 6715 believe that this would broaden the democratisation of labour unions. As such, you cannot deviate from this manner of electing officers as this will result in a void election" (emphasis added). The Government now affirms that the FFF is not covered by this provision, which it says is only indicative. The Committee notes, nevertheless, the reasons why the executive of the FFF unanimously decided, in June 1991, to postpone its national convention until the law was amended and the uncertainty removed.
6. 144. The complainant organisation has explained why the direct election requirement raises insurmountable problems in practice, due to geographic and climatic conditions, transport and communication difficulties, as well as huge costs and administrative obstacles. The Committee appreciates that the legislator might want to make the electoral process in trade unions as democratic as possible but, as applied to the particular circumstances, this otherwise legitimate objective in fact denies the right of FFF members to elect their representatives and to draw up their constitution and rules in full freedom, both of which are fundamental principles of freedom of association.
7. 145. As the Committee pointed out on many earlier occasions, the right of workers' organisations to elect their own representatives freely is an indispensable condition for them to be able to act in full freedom and to promote effectively the interests of their members. For this right to be fully acknowledged, it is essential that the public authorities refrain from any intervention which might impair the exercise of this right, whether it be in determining conditions of eligibility of leaders or in the conduct of the elections themselves. (Digest of decisions and principles of the Freedom of Association Committee, 3rd edition, 1985, para. 295.) The Committee therefore concludes that, in view of the particular circumstances of this case where in particular there are difficulties in transport, the impugned provisions are not compatible with the principles on freedom of association.
8. 146. Concerning the second issue, the Committee considers that legislative provisions requiring, for instance, that financial reports be submitted annually to the authorities do not per se constitute an infringement on trade union autonomy; these measures are useful where employed only to prevent abuses and to protect union members themselves against fraud or mismanagement of their funds. In the present case, section 241(j) goes further, by requiring that every income, revenue or expense be evidenced by a record or receipt indicating the date, place and purpose of payment.
9. 147. The Government has also stated that cancellation proceedings are not automatic, despite the clear wording of section 241(j); in practice, says the Government, they are instituted only after two reminders have been sent to the trade unions concerned and they still fail to comply; in addition, the trade unions have the right to explain and defend themselves during these proceedings.
10. 148. The Committee notes that while section 241(j) provides that these records and receipts form part of the financial records of the organisation, it does not require that they be produced along with the annual financial report. The Committee is however unable, from the information provided, to evaluate precisely the extent of control by the authorities, let alone know which authorities ultimately exercise that supervision. Therefore, it recalls that a guarantee exists against interference by the authorities in the internal financial administration of trade unions when the official appointed to exercise supervision enjoys some degree of independence from the administrative authorities and when he is himself subject to the control of the judicial authorities. (Digest, paras. 327-337.) This is particularly important when the registration and existence of the organisation is at stake, as in the present case. The Committee therefore calls on the Government to apply this criterion.
11. 149. As regards the third issue, namely the requirement in Rule II(3)(d) that labour federations or national unions organise their direct members into locals or chapters, the Committee recalls that, as a matter of principle workers' organisations have the right to organise their administration without any interference by the public authorities. This encompasses the right to choose, in full freedom, the organisational structure the FFF deems more appropriate, taking into account the particular circumstances of its membership and the geographic factors. The Government has indicated that this provision is only indicative. Nevertheless, Rule II(3)(d) of Book V as it presently stands is incompatible with the principles of freedom of association

The Committee's recommendations

1. 150. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee considers that, given the difficulties facing rural workers' organisations in assembling their members, the provisions concerning the election of union leaders by direct ballot and on the internal functioning of federations and their direct affiliates, are not compatible with the principles of freedom of association. It requests the Government to amend them and draws this aspect of the case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.
   • (b) The Committee draws the attention of the Government to the fact that a guarantee exists against interference by the authorities in the internal financial administration of trade unions when the official appointed to exercise supervision enjoys some degree of independence from the administrative authorities and when he is himself subject to the control of the judicial authorities; it calls on the Government to apply this criterion.