Report in which the committee requests to be kept informed of development - Report No 295, November 1994

Case No 1718 (Philippines) - Complaint date: 31-MAY-93 - Closed

1. 284. The complaint in this case appears in a communication from the Drug, Food and Allied Workers' Federation (DFA) dated 31 May 1993. The Government sent its observations in a communication dated 20 May 1994.
2. 285. The Philippines has ratified both the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87), and the Right to Organize and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant's allegations

1. 286. In its communication of 31 May 1993 the Drug, Food and Allied Workers' Federation (DFA) states that the Union of Filipro Employees (UFE) is the exclusive bargaining representative of all the employees in Nestlé Filipinas Inc., and that its struggle to obtain a number of claims began in November 1985 when it called a strike on the grounds that the enterprise had violated the workers' rights. The complainant organization states that in December 1985, upon a petition filed by Nestlé, the Labour Minister issued an order assuming jurisdiction over the labour dispute and that as a result of this decision the strike was prohibited. The UFE filed a motion for reconsideration of the order but this motion was denied. Meanwhile, the complainant states that Nestlé refused to bargain and in January 1986 the trade union organization called a strike. The Labour Minister subsequently issued a return to work order and the enterprise filed separate petitions to declare the strike illegal before the Labour Arbitration Branches of the National Capital Region, and in Cagayàn de Oro. The complainant organization points out that it filed motions to dismiss petitions to declare the strike illegal, but that all these were either denied or ignored.
2. 287. The complainant organization states that on 13 March 1986 the new Government ordered that all striking workers should return to work and that the management should accept them under the same terms and conditions prevailing previous to the work stoppage. It adds that in spite of the fact that two days later the striking workers returned to work, the enterprise refused to readmit several of them. More specifically, the complainant organization alleges that: in the Cagayàn de Oro branch the 72 members of the UFE were not allowed to go back to work and were not paid their wages and benefits due; in the Alabana branch, drivers were reassigned to different jobs; and in the Makati office a worker was transferred to another job.
3. 288. The complainant organization states that the UFE tried to settle the labour dispute amicably and that in June 1986 it sent a letter to the Secretary of Labour to try and obtain preventive mediation and a compromise agreement. The letter was referred to the National Conciliation and Mediation Board (NNCMB) and after the enterprise had failed to respond to the Board's summons to attend conciliation hearings a strike was called for 4 December 1986 on the grounds of violation of the collective agreement, the dismissal of trade union officers and members, anti-trade union discrimination and the hiring of scabs. The complainant organization points out that it tried once again to reach an agreement by calling off the strike on 16 December although the issues involved had not been resolved but that the labour arbiters declared the strike illegal and ruled that the trade union officers and members had lost their employment status.
4. 289. The complainant organization states that in June 1987 negotiations began with the enterprise on a collective agreement and that two months later the enterprise submitted its proposals. The complainant organization alleges that after numerous bargaining sessions a deadlock was declared on 11 September 1987. It adds that the UFE called a strike and that subsequently, on 14 September, the enterprise served notices of termination of employment on 69 trade union officials and 35 trade union members. The complainant organization also alleges that negotiations on the collective agreement were called off and that the enterprise entered into individual negotiations with employees from the Cebu-Davao sales office and the Cagayàn de Oro factory.
5. 290. The complainant organization also alleges that in September 1987 the enterprise stopped remitting union funds on the grounds that the dismissed union officers could no longer represent the trade union organization. The complainant organization adds that it filed a petition to the National Labour Relations Commission (NLRC) on this matter and after a protracted litigation, the NLRC issued a resolution ordering the enterprise to remit the union funds. In spite of this, the enterprise refused to comply with the resolution and appealed to the Supreme Court, which prevented the NLRC's resolution from being implemented. The Supreme Court dismissed the enterprise's petition in October 1989 as well as a later motion for reconsideration filed in November of the same year. Finally and after having deprived the trade union of its funds for one year; the enterprise defied the decisions of the NLRC and the Supreme Court and distributed the funds directly among the individual trade union members.

B. The Government's reply

1. 291. In its communication dated 20 May 1994, the Government states that the complaint centres on the application of articles 263 and 264 of the Labour Code of the Philippines and their use in connection with the labour dispute at the enterprise Nestlé Filipinas Inc. More specifically, the Government states that the complainant organization had violated these legal provisions by having called and carried out a strike in spite of the fact that the Labour Minister had issued an order assuming jurisdiction over the labour dispute in the enterprise - under the above-mentioned article 263 which states that it may assume jurisdiction over a dispute likely to cause a strike in an industry indispensable to the national interest - and ordered the return to work of the strikers. The Government states that the legal provisions in question - and in particular the law on assumption of jurisdiction - are not repressive of the workers' right to strike and that in this case, the purpose of the return-to-work order was to maintain the status quo pending determination of the legality or illegality of the strike. The Government also encloses the Supreme Court's ruling upholding the NLRC's decisions that the strikes were illegal and the dismissals justified.
2. 292. As regards the allegation concerning the withholding of trade union dues, the Government states that the NLRC's decision to refuse to issue a writ of execution ordering Nestlé to remit the union's funds is justified and does not undermine the complainant's right to form an association, given that the workers in the enterprise may exercise the right to join the union within the enterprise. The Government also points out that the above-mentioned decision of the NLRC cannot be implemented given that the enterprise has referred the matter to the Supreme Court and that until the latter has upheld or reversed the NLRC's resolution, execution cannot proceed.

C. C. The Committee's conclusions

• The Committee's conclusions
  293. 293 First of all, the Committee notes that the labour dispute which promoted the various allegations of violations of trade union rights in this case began nine years ago (1985), and understands that it might be difficult for a government to reply in a detailed way on events which occurred so far in the past. Similarly, the Committee notes that during the period in which the disputes in question occurred, there was a change of government in the Philippines, and the Committee feels bound to recall, as it has on various occasions, that a new government should take all the necessary measures to remedy the repercussions that facts alleged in a complaint might have had since it came to power, even if the events occurred under the previous regime.
  294. 294 The Committee notes that the allegations in this case refer to deficiencies in the labour legislation, to the dismissal or transfer to other jobs of a number of trade union officials, trade union members and workers who had taken part in two strikes in the Nestlé enterprise, to the withholding of trade union dues by the enterprise and to the enterprise's refusal to negotiate a collective agreement.
  295. 295 As regards the allegation concerning the dismissals and transfer to other jobs of trade union officials, trade union members and workers in the Nestlé enterprise on the grounds that they had participated in two strikes in January 1986 and September 1987, the Committee notes the Government's statement to the effect that the complainant organization violated sections 263 and 264 of the Labour Code by calling these two strikes although the Minister of Labour had issued an order assuming jurisdiction over the labour dispute and ordered the workers to return to work. The Committee notes that the above-mentioned sections allow, amongst other things, that if there is a labour dispute likely to cause a strike or lockout in an industry which the Government considers indispensable to the national interest, the Secretary of Labour and Employment may assume jurisdiction over the dispute or submit it to compulsory arbitration. Furthermore, the Committee notes that the Supreme Court ruling, which the Government communicates with its observations, upholds the NLRC's decisions that the strikes were illegal and the dismissals justified.
  296. 296 The Committee notes that the labour authority assumed jurisdiction over the dispute and submitted it to compulsory arbitration to the National Labour Relations Commission (NLRC) at the request of the Nestlé enterprise, in spite of the fact that the complainant organization was opposed to these measures. Similarly, the Committee notes that after the NLRC had declared these strikes illegal the enterprise failed to abide by the resolution of the labour authority that it should reinstate all the strikers when they returned to work after the strike in January 1986 (72 workers were dismissed) and that later it dismissed a number of trade union officials and trade unionists (104) after the strike in September 1987. The Committee draws the Government's attention to the fact that a provision which permits "either party unilaterally to request the intervention of the labour authority may effectively undermine the right of workers to call a strike ... and does not promote voluntary collective bargaining" (see 265th Report, Cases Nos. 1478 and 1484 (Peru), para. 547). The Committee also deplores that drivers were reassigned to different jobs in the Alabana and Makati offices.
  297. 297 The Committee recalls that compulsory arbitration to end a collective labour dispute is acceptable if it is at the request of both parties involved in a dispute, or if the strike in question may be restricted, even banned, i.e. in the case of disputes in essential services in the strict sense of the term, namely those services whose interruption would endanger the life, personal safety or health of the whole or part of the population (see 256th Report of the Committee, Case No. 1430 (Canada/British Columbia), para. 181). The Committee urges the Government, in accordance with the requests the Committee of Experts on the Application of Conventions and Recommendations has been making for several years in its observations, to amend the provisions in the Labour Code concerning: the enforcement of compulsory arbitration when, in the opinion of the Secretary of Labour and Employment, a planned or current strike affects an industry indispensable to the national interest (section 263(g) and (i)); and the dismissal of trade union officers as a penalty for participating in strikes declared illegal (section 264(a)), with a view to limiting the restrictions on the right to strike, in accordance with the principles laid down in Convention No. 87.
  298. 298 The Committee notes that compulsory arbitration had been requested by the Nestlé enterprise in conformity with the law on the grounds that the dispute affected an industry indispensable to the national interest (section 263 of the Labour Code). However, according to the Committee, given that the activities carried out by this enterprise may in no way be classified as essential services in the strict sense of the term, the Committee regrets the restrictions on the right to strike and the many dismissals ensuing from the exercise of this right. The Committee requests the Government to encourage negotiations between the enterprise and the trade union in order to evaluate the possibility of reinstating the parties concerned to their posts. The Committee requests the Government to keep it informed on the matter.
  299. 299 As regards the allegation concerning the withholding of trade union dues by the Nestlé enterprise since 1987, the Committee notes that the Government feels that the NLRC's resolution that the enterprise should remit the trade union dues should not be executed since the Nestlé enterprise has lodged an appeal on this resolution to the Supreme Court. The Committee draws the Government's attention to the fact that a considerable delay in the administration of justice - seven years in the case of this allegation - is tantamount in practice to a denial of justice. The Committee also notes that, according to the complainants, the trade union dues were reimbursed individually to the workers. The Committee nevertheless draws the Government's attention to the fact that "the withdrawal of the check-off facility, which could lead to financial difficulties for trade union organizations, is not conducive to the development of harmonious relations and should therefore be avoided" (see Digest of decisions and principles of the Freedom of Association Committee, 3rd edition, 1985, para. 325). The Committee requests the Government to take measures, in future, so that similar practices do not reoccur.
  300. 300 As regards the allegation concerning the Nestlé enterprise's refusal to negotiate a new collective agreement with the trade union organization, as well as the fact that the enterprise gave priority to bargaining of an individual nature, the Committee notes that the Government did not submit any observations in this respect. The Committee points out that generally speaking "both employers and trade unions should bargain in good faith to come to an agreement, and that genuine and constructive negotiations are a necessary component to establish and maintain a relationship of confidence between the parties" (see 284th Report, Case No. 1619 (United Kingdom), para. 360). The Committee also recalls that "direct negotiation between the undertaking and its employees, bypassing representative organizations where these exist, might be detrimental to the principle that negotiation between employers and organizations of workers should be encouraged and promoted" (see Digest, op. cit., para. 208).

The Committee's recommendations

1. 301. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee urges the Government, in accordance with a request made for many years by the Committee of Experts on the application of Conventions and Recommendations in its observations, to amend the provisions concerning (1) the enforcement of compulsory arbitration when, in the opinion of the Secretary of Labour and Employment, a planned or current strike affects an industry indispensable to the national interest (section 263(g) and (i)) and (2) the dismissal of trade union officials as a penalty for participating in strikes declared illegal (section 264(a)), with a view to limiting the restrictions on the right to strike, in accordance with the principles contained in Convention No. 87.
   • (b) Regretting the many dismissals which took place after the legislation in question had been applied and after strikes had been declared illegal in the Nestlé enterprise - which does not carry out an essential service - the Committee requests the Government to promote negotiations between the enterprise and the trade union in order to evaluate the possibility of reinstating the persons concerned in their jobs. The Committee requests the Government to keep it informed on this matter.
   • (c) The Committee requests the Government in future to take the appropriate measures so that practices concerning the withholding of trade union dues, mentioned in relation to the Nestlé enterprise, do not reoccur.