Interim Report - Report No 283, June 1992

Case No 1615 (Philippines) - Complaint date: 18-DEC-91 - Closed

1. 401. In a communication dated 18 December 1991, the International Federation of Building and Woodworkers (IFBWW) presented a complaint of violations of freedom of association against the Government of the Philippines, on behalf of a number of its affiliated trade unions: the Associated Labour Unions, the Association of Trade Unions, the Southern Philippines Federation of Labour, the United Lumber and General Workers of the Philippines and the General Federation of Labour.
2. 402. The Government submitted its observations in a communication of 17 January 1992.
3. 403. The Philippines have 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 complainant's allegations

1. 404. The complainant organisation submits that Policy Instruction No. 20, entitled "Stabilising Employer-Employee Relations in the Construction Industry", violates Conventions Nos. 87 and 98 as it imposes an industry bargaining unit and is used to facilitate the discriminatory dismissal of certain employees who have engaged in legitimate trade union activity and exercised their basic rights of freedom of association.
2. 405. Policy Instruction No. 20 provides that "generally there are two types of employees in the construction industry, namely project employees and non-project employees. Project employees are those employed in connection with a particular construction project. Non-project employees are those employed by a construction company without reference to any particular project. Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of projects in which they have been employed by a particular company. Moreover, the company is not required to obtain clearance from the Secretary of Labour in connection with such termination."
3. 406. Policy Instruction No. 20 also stipulates: "... for project employees, the appropriate collective bargaining unit is the industry, not any particular project ... Therefore the employees of a particular project cannot constitute an appropriate collective bargaining unit. They may however join the recognised industry union in the construction industry." This imposition of an industry bargaining unit, denying workers the choice of forming enterprise level or company level bargaining units, is a clear violation of the right to organise and to bargain collectively, as protected under the ILO Conventions.
4. 407. The IFBWW affiliated organisations have petitioned the Government of the Philippines for the abolition of Policy Instruction No. 20, on the grounds that it is in contradiction with the Constitution of the country with regard to free collective bargaining and the promotion of trade unionism, and because the instruction is being used by employers in the construction industry to exploit workers arbitrarily, classifying them all as project workers, thereby depriving them of the right to security of tenure and collective bargaining. On 13 February 1990 the Department of Labour and Employment replied that "there is no need for a repeal of Policy Instruction No. 20 because it has become irrelevant ... project employees, like other employees are now allowed to organise themselves in labour organisations and to constitute an appropriate bargaining unit at enterprise level". The Government maintains that Executive Order No. 111 repealed the offending provisions of the Labour Code and that article 243 provides for freedom of association and collective bargaining for all persons.
5. 408. The complainant contends that, despite the above-mentioned assurance given by the Government, Policy Instruction No. 20 nevertheless is still being applied in the labour courts and by certain companies, to justify discrimination against workers. The complainant illustrates this situation by giving the example, explained below, of project workers who were dismissed for attempting to form bargaining units shortly after they had joined the union in the Algon Engineering Construction Corporation ("Algon").
6. 409. In February 1989 a group of workers at Algon joined the union in order to form a bargaining unit. The company immediately started harassing and arbitrarily terminating unionised workers; the union requested the intervention of the National Conciliation and Mediation Board but the terminations continued. The union filed notice of intent to strike on 4 March 1989 since the termination of union members at Algon continued, using the justification of the terms of Policy Instruction No. 20. At least five of those terminated were core trade union leaders and some had service records of over 20 years. Hence, from the union's point of view, even if Policy Instruction No. 20 were still legally applicable (which the Government contends it is not), the workers affected could not legally be defined as "temporary project workers". The union members went on strike as a result of the union busting tactics and unfair labour practices of the company. Algon sued the union, union officers and core leaders for damages and losses of earnings during the strike.
7. 410. On 4 October 1989 the National Labour Relations Commission (NLRC) ruled that the strike was illegal on the grounds that the union had not given seven days' notice and that the charge of unfair labour practices was, at the time of the strike, under investigation by the NLRC. The union appealed the issue of illegal dismissals and the NLRC ruled on 31 October 1989 that five of the employees dismissed were not project employees and, as such, their termination was illegal; the court ordered that these workers be reinstated with back pay.
8. 411. The union appealed the case to the High Court submitting, inter alia, that: (a) the strike was legal because the employer's tactics constituted unfair labour practices; (b) the NLRC's decision of 31 October 1989 should apply to all workers involved in the strike, since the Labour Department had stated that Policy Instruction No. 20 was now irrelevant and all workers should have equal rights to participate in trade union actions.
9. 412. The unions are still awaiting a satisfactory ruling from the court effectively to stop companies from being able arbitrarily to classify workers as temporary project workers and in order to protect their right to freedom of association and free collective bargaining. The complainant concludes that the Government violates Conventions Nos. 87 and 98 due to the continued discrimination in the labour courts and by companies applying Policy Instruction No. 20 when all workers in construction should now enjoy the right to freedom of association and collective bargaining and protection from unfair labour practices.

B. The Government's reply

1. 413. In its communication of 17 January 1992, the Government states that Policy Instruction No. 20 was issued in 1977 when the previous Government of the Philippines adopted a one-industry/one-uniopolicy. This Instruction issued by the then Minister of Labour was a mere guideline, not a law, presidential decree or executive order; it has been repealed in 1987 by Executive Order No. 111 which abolished the one-union/one-industry system previously in place. The Order, which grants to all workers the right to organise and collective bargaining, also allows project employees, like other employees, to organise themselves in labour organisations. Policy Instruction No. 20 is no longer valid or applicable.
2. 414. Regarding the Algon case, the matter is pending before the Supreme Court but the issues raised pertain only to:
   • - the legality of the strike, which was ruled illegal on the basis of other legal provisions and not on account of Policy Instruction No. 20;
   • - the reinstatement of all the other workers, which raises questions of fact as to whether the workers indeed constitute the ongoing pool of workers involved in different projects of the respondent company (the Government stresses in this respect that the Labour Department categorically ruled that Policy Instruction No. 20 is irrelevant);
   • - acts of damages which have no relation whatsoever to Policy Instruction No. 20.
3. 415. The Government concludes that there exist no elements establishing that Policy Instruction No. 20 in its present status shall cause further violations of trade union rights of construction industry workers, and requests that the complaint be dismissed.

C. The Committee's conclusions

1. 416. The Committee notes that this case involves two issues: the right of temporary workers to join the trade union of their own choosing; and the particular case of workers dismissed by a private company, Algon, allegedly using Policy Instruction No. 20 as a justification.
2. 417. The Committee recalls that workers without distinction whatsoever should have the right to establish and join organisations of their own choosing, be they employed on a permanent basis or for a definite period or project.
3. 418. The Committee notes that there remains some uncertainty as to the status of Policy Instruction No. 20, which was at the root of the complaint. While the Government states that that Policy Instruction is no longer relevant or applicable, it appears that it was never expressly repealed, as clearly stated in the letter of 2 February 1990 from the then Secretary of Labour to the Association of Trade Unions (ATU-TUCP).
4. 419. The Committee further notes that, five years after its purported repeal, Policy Instruction No. 20 is still being relied on by employers such as Algon to dismiss workers in the construction industry. It also appears that labour tribunals still use the distinction established in the Policy Instruction since, as late as 31 October 1989, the National Labour Relations Commission ordered Algon to reinstate five of the employees dismissed on the basis that they were not project employees. This lends credence to the complainant's allegation that, despite the stated intentions of the Government and its assurances that Policy Instruction No. 20 is no longer relevant, it is still in fact used as a justification by certain employers to dismiss workers and relied upon by the labour courts in their decisions. In order to resolve any uncertainty and to avoid further such problems, the Committee requests the Government to repeal expressly Policy Instruction No. 20 in its entirety and to provide it with the relevant text.
5. 420. As regards the particular case of the workers dismissed by Algon, the Committee notes that a number of workers were dismissed shortly after joining the union and attempting to form a bargaining unit. That coincidence suggests anti-union motives behind these terminations, but the Committee has not been provided with sufficient conclusive information one way or the other. The decision to be handed down by the Supreme Court will certainly help the Committee fully to appreciate the factual circumstances of the case; it therefore requests the Government to provide the judgement and reasons of the Supreme Court in the Algon case, as soon as it is issued.

The Committee's recommendations

1. 421. In the light of its foregoing interim conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee recalls that workers without distinction whatsoever, be they employed on a permanent basis or for a fixed term, should have the right to establish and join organisations of their own choosing.
   • (b) The Committee invites the Government to take measures in order expressly to repeal Policy Instruction No. 20 in its entirety, and to provide it with the relevant text.
   • (c) The Committee requests the Government to provide the judgement of the Supreme Court in the Algon case as soon as it is issued.