Definitive Report - Report No 283, June 1992

Case No 1614 (Peru) - Complaint date: 20-NOV-91 - Closed

1. 54. In a communication dated 20 November 1991, the Federation of Textile Workers of Peru (FTTP) presented a complaint alleging violations of trade union rights. The Government sent its observations in a communication dated 27 February 1992.
2. 55. Peru 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. The complainant's allegations

1. 56. The Federation of Textile Workers of Peru (FTTP) alleges in its communication of 20 November 1991 that Legislative Decree No. 757 annuls the automatic adjustment of remuneration in accordance with the cost-of-living index, which had been included in the collective agreement in force in the textile sector, and repeals part of Supreme Decree 034-90-TR which allowed collective bargaining of wage increases not foreseen in the collective agreements.

B. The Government's reply

1. 57. In its communication of 27 February 1992, the Government states that Legislative Decree No. 757 of 8 November 1991 establishes that pacts and collective agreements may not include systems for the automatic adjustment of fixed remuneration in accordance with variations in the consumer price index, and that enterprises and workers in the private sector would have to replace standards, agreements or clauses of this kind by systems fixing remuneration on the basis of production increases and productivity in each enterprise.
2. 58. The Government states that in accordance with the provisions of article 188 of the Political Constitution, the Congress of the Republic delegated authority to the Executive to issue legislative decrees to create the necessary conditions for private investment in the different sectors of production and that Decree No. 757 was issued pursuant to this power and that purpose.
3. 59. The Government states that a system for the automatic adjustment of remuneration in the textile sector according to monthly variations in the consumer price index as published by the National Institute of Statistics and Computerised Data had been applied since 1945. It adds that the system was used during the years when the economy was stable and inflation rates remained within reasonable margins, but that the now very high level of inflation (396 per cent in August 1990) meant that textile and other enterprises which still applied such systems found it impossible to grant corresponding wage increases, which discouraged investment and resulted in the closing of enterprises and a climate of constant dispute.
4. 60. In these circumstances, the Government states that Legislative Decree No. 757 of 8 November 1991 provides for the replacement of the automatic wage adjustment system by another system which fixes remuneration in accordance with production and productivity. Finally, the Government notes that the new Decree is an attempt to establish a system which combines the wage adjustment system with the annual presentation of workers' demands at the level of each enterprise or by branch of economic activity so that account can be taken of the actual situation of the respective enterprise and the industry as a whole.

C. The Committee's conclusions

1. 61. The Committee observes that the allegations made by the complainant organisation refer to the annulment of the clauses respecting wage adjustments based on increases in the cost-of-living index included in the collective agreement in force in the textile sector and the repeal of part of Supreme Decree 034-90-TR which allowed the collective bargaining of wage increases not foreseen in the collective agreements in force.
2. 62. The Committee observes that Legislative Decree No. 757 does in fact stipulate that pacts and collective agreements may not contain systems for the automatic adjustment of fixed remuneration in accordance with variations in the consumer price index and that existing systems of this kind would have to be replaced by a system which fixed remuneration in accordance with production increases and productivity in each enterprise. In the same way, the Committee notes the imperative economic reasons relied on by the Government for amending the system of automatic wage adjustment (investment difficulties, the closing down of enterprises and, in particular, the worsening of hyperinflation in the country).
3. 63. The Committee notes that the present case is similar to another which it examined at its meeting in November 1988 and which also concerned the annulment by decree of clauses concerning wage adjustments as a result of increases in the cost-of-living index and it reiterates the conclusions which it reached at that time (259th Report, Case No. 1450 (Peru), para. 213):
   • The Committee further considers that the legislative provisions prohibiting the negotiation of wage increases beyond the level of the increase in the cost of living are contrary to the principle of voluntary collective bargaining embodied in Convention No. 98; such a limitation would be admissible only if it remained within the context of an economic stabilisation policy, and even then only as an exceptional measure restricted to what is absolutely necessary and limited to a reasonable period of time.
4. 64. In these circumstances, the Committee observes that, in its reply, the Government makes no mention of there having been consultations with the unions involved before the adoption of Legislative Decree No. 757 which annuls the clauses of the collective agreement concerning the automatic adjustment of wages as a result of increases in the cost-of-living index, and repeals part of Supreme Decree No. 034-90-TR, which allowed collective bargaining of wage increases not foreseen in collective agreements. The Committee regrets that these Decrees, instead of temporarily suspending the clauses during the period of the economic emergency cited by the Government, definitively annulled them. The Committee therefore asks the Government, as soon as the economic situation of the country is stabilised, to allow workers' organisations in the textile sector to negotiate wage increases freely in collective agreements.

The Committee's recommendations

1. 65. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • The Committee asks the Government, as soon as the economic situation is stabilised, to allow workers' organisations in the textile sector to negotiate wage increases freely in collective agreements.