Report in which the committee requests to be kept informed of development - Report No 316, June 1999

Case No 1996 (Uganda) - Complaint date: 24-NOV-98 - Closed

Allegations: Refusal to recognize trade union organizations

1. 642. In a communication dated 24 November 1998, the International Textile, Garment and Leather Workers' Federation (ITGLWF) presented a complaint of violations of freedom of association against the Government of Uganda.
2. 643. The Government furnished its observations in a communication dated 10 February 1999.
3. 644. Uganda has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). It has, however, ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant's allegations

1. 645. In its complaint dated 24 November 1998, the ITGLWF asserts that the Government of Uganda has failed to compel employers in the textile sector to comply with the right of freedom of association. More specifically, the ITGLWF contends that in spite of having a total membership of 2,420 workers in 16 factories, with a membership of well over 50 per cent of the workforce in 13 of those factories (a membership list is attached to the complaint and appears as Annex I to this case)), its affiliate the Uganda Textile, Garments, Leather and Allied Workers' Union (UTGLAWU) is today recognized by only one textile company, the Uganda Fish-Net Manufacturers Ltd., which has a paid-up membership of 200. Even this employer is threatening to follow the others in withdrawing its recognition of the union.
2. 646. The ITGLWF points out that the UTGLAWU is the sole trade union organizing in the sector in Uganda. Without formal recognition, it is impossible for the union to represent the interests of its members. Today, given the major structural changes within the textile, garment and leather industries, workers in the smaller private companies replacing the state-run industries need effective representation more than ever. Currently, this is almost impossible to achieve due to a host of reasons of both a legal and practical nature. With regard to legislation, while freedom of association is guaranteed under the 1995 Constitution, the Trade Unions Decree of 1976 contains the following stringent requirements: (i) a minimum number of 1,000 members for the formation of a trade union (section 8(3)); and (ii) the requirement that the union needs to represent 51 per cent of the workers in order to be recognized by the employer for collective bargaining purposes (section 19(1)(e)). However, on 9 September 1997 the Minister of Justice/Attorney General, Mr. B. Katureebe, issued a legal interpretation indicating that the abovementioned provisions of the Trade Unions Decree are void since they curtail the rights of freedom of association guaranteed by the Constitution. (The text of the Attorney General's letter is attached to the complaint and appears as Annex II to this case.)
3. 647. As regards practice concerning effective representation by a union the ITGLWF states that the following nine state-run textile companies withdrew their trade union recognition agreement following privatization:
   • -- Nytil Picfare Ltd. (privatized 20 March 1996);
   • -- Leather Industry of Uganda Ltd. (privatized 8 August 1995);
   • -- Uganda Bags and Hessian Mills Ltd. (privatized 18 December 1993);
   • -- African Textile Mills Ltd. (privatized 16 March 1996);
   • -- Rayon Textile Mills Ltd. (privatized in 1993);
   • -- Uganda Blanket Manufacturer Ltd. (privatized 10 January 1997);
   • -- Uganda Garments Industry Ltd. (closed pending privatization);
   • -- Uganda Spinning Mills Ltd. (partially closed pending privatization);
   • -- Lango Development Corp. Ltd. (privatized in 1998).
     • Currently, the UTGLAWU has declared formal disputes at the following companies: Nytil Picfare Ltd., Vitafoam Ltd., Leather Industries of Uganda (case lodged on 2 January 1998 in respect of 70 members); Kimkoa Industry Ltd. (case lodged on 8 December 1997 in respect of 50 members); Tuf Foam (Uganda) Ltd. (case lodged on 2 December 1997 in respect of 60 members); and Marine and Agro Export Processing Co. Ltd. (case lodged on 2 December 1997 in respect of 400 members).
   • 648. According to the ITGLWF, one case in particular has set a very damaging precedent. Nytil Picfare has refused to deal with the union since it was privatized in March 1996. After privatization, many of the 9,000 workers were dismissed. Rank and file resistance was dealt with by the summary dismissal of those involved.
4. 649. Deplorably, the agreement for the sale of the assets of Nyanza Textile Industries Ltd. (NYTIL) to Nytil Picfare Ltd., negotiated by the Minister of State for Finance (Privatization), provided that:
   • The Purchaser shall be at liberty to take on any person formerly employed by the Seller on such terms and conditions as the Purchaser may agree with such employee; and
   • The Purchaser shall not be bound by any arrangements or contracts made by the Seller with any Trade Union and shall not be liable for any claim regarding unionized workers previously employed by the Seller.
   • In the ITGLWF's view, these clauses are in contravention of the country's labour laws and suggest collaboration between the Ugandan Government and investors in private industry.
5. 650. Moreover, the ITGLWF contends that armed with this clause in the sale agreement, Nytil Picfare Ltd. has flatly refused to meet its legal requirements with regard to unionization, despite the fact the union has succeeded in organizing all 1,100 workers currently employed by the company. Management has even refused to attend meetings convened by the Ministry of Labour. The Commissioner of Labour, for his part, argued in a letter dated 2 September 1998 that the Nytil Picfare Ltd. matters are above the Ministry and are being handled by the President himself. The National Centre of Trade Unions, the UTGLAWU and the ITGLWF have on a number of occasions asked the Government to rule in favour of trade union recognition, but despite assurances that all necessary measures would be taken to bring the matter to a speedy and satisfactory conclusion, no progress has been made. Again, this seems to indicate collusion between the Government and employers.
6. 651. The ITGLWF stresses that the situation at Nytil Picfare has encouraged other companies to follow suit. For instance, Mr. B. Gopal, manager of the Leather Industries of Uganda Ltd., in a letter to the UTGLAWU dated 7 September 1998, states clearly:
   • We have further learnt that even very major industries, e.g. Nytil Picfare Limited, employing more than thousand workers are yet to recognize you though they have been operational earlier than us. In view of this, we would suggest that we start discussions on your claim for recognition in due course once our business situation improves, and also once you are recognized by the newly reconstituted garment manufacturers of repute. (Emphasis is B. Gopal's.)
7. 652. The ITGLWF adds that other sectors which have been particularly affected by a refusal of management to recognize trade unions following structural adjustment measures include the railway sector and the hotel sector. In conclusion, it asserts that failure on the part of a government to enforce recognition when a union has fulfilled all the legal requirements constitutes a breach of Conventions Nos. 87 and 98 on freedom of association and the right to bargain collectively and requests that the Committee on Freedom of Association carry out an urgent investigation in this regard.

B. The Government's reply

1. 653. The Government affirms that it is committed to the fundamental rights of workers and the right of freedom of association as the basic foundation of other rights. This commitment is expressed in the provisions of the national Constitution of 1995. Freedom of association and the right to organize and bargain collectively are guaranteed in articles 29(1)(e) and 40(3) of the Constitution. This position is acknowledged in the complaint.
2. 654. It is also true, however, that section 19(1)(e) of the Trade Unions Decree No. 20 of 1976, which provides that a union must have a 51 per cent majority at least in order to be recognized by an employer, is not in line with the new Constitution of 1995. This problem has already been acknowledged by the Government and is being addressed within the framework of the labour law reform process which has been shared with the ILO.
3. 655. The Government explains that the intentions and objective of its economic reform policies, privatization and divestiture programmes were aimed at rehabilitating the economy and building a foundation for sustained economic growth, national development and poverty reduction. Related to the above, the Government considers it important to point out that the complainant's assertion that 9,000 workers lost their jobs as a result of privatization is false. The jobs were not lost because of privatization but rather as a result of mismanagement and asset stripping. The enterprises in question had ceased operations and had already been shut down. In most cases, these enterprises had been non-operational for over one year by the time of divestiture. On the contrary therefore, the divestiture of these enterprises to new private owners, who have revived them, has restored opportunities for some of the workers to remain employed thereby creating potential membership for the union.
4. 656. The Government then points that out of the 13 industries listed by the complainant in Annex I, only four (NYTIL, African Textile Mills, Uganda Leather and Tanning Industry and Lango Development) were privatized under the Government's reform and divestiture programme. Five of the others (MULCO, Uganda Garments (1973), Uganda Fish-Net Manufacturers, Uganda Blanket Manufacturers and Uganda Rayon Textiles) were repossessed by the former owners under the Expatriated Properties Act 1982, while two (United Garments Industry Ltd. and Uganda Bags and Hessian Mills) went into receivership and one (Blue Bird) was not a State Enterprise. It is therefore misleading for the complainant to claim that its affiliate's membership was reduced primarily as a result of the implementation of the Government's divestiture programme.
5. 657. Concerning the case of Nytil Picfare, the Government indicates that provisions cited in the agreement, for the sale of assets of Nytil to Nytil Picfare, do not stop workers from unionizing under the labour laws. Nytil was not sold as a going concern. The Government merely sold the assets of Nytil to Nytil Picfare. Consequently, there was a new corporate entity and the normal practice would be for the union to enter into a new recognition agreement with the new company. The spirit and effect of the provisions cited was merely to clarify and emphasize that Nytil, rather than Nytil Picfare, would remain responsible for the underlying obligations to workers under the agreements with the union including settlement of terminal benefits.
6. 658. The Government further considers that the statement made implying collusion between the Government and employers is unfortunate. The problem of non-recognition of trade unions has been a shared concern among the social partners. The Government has addressed this problem at regular tripartite meetings and has maintained regular dialogue with the employers concerned. The interpretations sought from the Attorney General and the labour law revision process are a clear indication of the Government's genuine commitment to address this shared concern. Moreover, while the Government is pursuing its efforts at the national level, the Government and the social partners will inevitably need technical assistance to strengthen their institutional capacities and sensitization of the stakeholder.
7. 659. In conclusion, the Government reaffirms its commitment to the fundamental rights of workers and is determined to promote them. It is therefore incumbent upon the Government and its social partners to strengthen their collaborative efforts to find amicable solutions for the protection and promotion of social justice.

C. The Committee's conclusions

1. 660. The Committee notes that the allegations in this case are of both a legislative and factual nature in respect of the issue of denial of union recognition for collective bargaining purposes.
2. 661. As regards the legislative aspect of the case, the complainant alleges that while the Ugandan Constitution guarantees freedom of association, the Trade Unions Decree of 1976 contains provisions which make it difficult for a union to be recognized by the employer for collective bargaining purposes. The Committee notes that the Government does not refute this allegation. On the contrary, it acknowledges that the provisions in question are not in line with the Ugandan Constitution. The Committee, for its part, notes that section 8(3) of the Trade Unions Decree of 1976 stipulates that "No trade union shall be registered unless it is composed of not less than one thousand registered members" and that section 19(1)(e) provides that "every employer shall be bound to recognize a registered trade union to which at least 51 per cent of his employees have freely subscribed their membership and in respect of which the Registrar has issued a certificate under his hand certifying the same to be a negotiating body with which the employer is to deal in all matters affecting the relationship between the employer and those of his employees who fall within the scope of membership of the registered trade union".
3. 662. The Committee considers that the two abovementioned provisions give rise to two different sets of problems from the standpoint of freedom of association. With regard to the requirement contained in section 8(3) of the Decree that there be a minimum number of 1,000 members to form a union, the Committee is of the view that although the founders of a trade union should comply with the formalities prescribed by legislation, these formalities should not be of such a nature as to impair the free establishment of organizations. In effect, the Committee considers that the establishment of a trade union may be considerably hindered, or even rendered impossible, when legislation fixes the minimum number of members of a trade union at obviously too high a figure, as is the case, for example, where legislation requires that a union must have at least 50 founder members. However, the legal requirement that there be a minimum number of 20 members to form a union does not seem excessive and, therefore, does not in itself constitute an obstacle to the formation of a trade union (see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, paras. 248, 255 and 256). In light of the above the Committee can only conclude that the minimum membership requirement set out in section 18(3) of the Trade Union Decree is liable to jeopardize the right of workers to establish organizations of their own choosing without prior authorization. This is all the more likely to occur when section 18(3) is read in conjunction with section 19(1)(e) which grants exclusive bargaining rights to a union representing 51 per cent of the employees concerned. In this sort of situation, the Committee has previously held that a minimum membership requirement of 1,000 set out in the law for the granting of exclusive bargaining rights might be liable to deprive workers in small bargaining units or who are dispersed over wide geographical areas of the right to form organizations capable of fully exercising trade union activities contrary to the principle of freedom of association (see Digest, op. cit., para. 832).
4. 663. Moreover, while it is not necessarily incompatible with Convention No. 98 for the most representative union in a given unit to be granted exclusive bargaining rights for that unit, section 19(1)(e) of the Trade Unions Decree obliges an employer to recognize a union for collective bargaining purposes only when it represents an absolute majority of the workers concerned. It is the Committee's view that such a provision does not promote collective bargaining in the sense of Article 4 of Convention No. 98 since there is a risk that collective bargaining may not take place in the eventuality that no trade union represents the absolute majority of the workers concerned. The Committee therefore considers that where, under a system for nominating an exclusive bargaining agent, there is no union covering more than 50 per cent of the workers in a unit, collective bargaining rights should nevertheless be granted to all the unions in this unit, at least on behalf of their own members, or they should be allowed to jointly negotiate a collective agreement applicable to the bargaining unit (see Digest, op. cit., paras. 831 and 833).
5. 664. For all the abovementioned reasons, the Committee would request the Government to take the necessary measures to ensure that sections 8(3) and 19(1)(e) of the Trade Unions Decree of 1976 are amended in line with freedom of association principles enunciated in the preceding paragraphs. Noting the Government's recognition that these provisions are not compatible with the new Ugandan Constitution of 1995 and that steps to address this problem are being taken within the framework of the labour law reform process currently taking place in the country, the Committee requests the Government to keep it informed of any developments in this regard.
6. 665. As regards the factual aspects of this case, the Committee notes that the complainant raises two sets of allegations. The first relates to the fact that following privatization of a number of industries in the 1990s in which the complainant's affiliate, the Uganda Textile, Garments, Leather and Allied Workers' Union (UTGLAWU), had organized workers, many workers including the UTGLAWU's members lost their jobs. This would explain the difference between the current membership of the UTGLAWU as opposed to its total membership during the 1980s (Annex I). The Government acknowledges that workers, including UTGLAWU members, lost their jobs but disputes that this occurred as a result of privatization. Rather, the job losses occurred well before privatization since the enterprises in question had ceased operations for over one year by the time of divestiture. Furthermore, only some of the enterprises listed by the complainant where the job losses occurred were privatized, contrary to the complainant's claims. In this regard, the Committee considers that it can examine allegations concerning economic rationalization programmes and restructuring processes, whether or not they imply redundancies or the transfer of enterprises or services from the public to the private sector, only in so far as they might have given rise to acts of discrimination or interference against trade unions (see Digest, op. cit., para. 935). In the concrete case at hand, inasmuch as all the workers previously employed by the enterprises privatized under the Government's reform and divestiture programme were affected (irrespective of whether they were or not trade union members or leaders), the Committee concludes that the issue of anti-union discrimination does not, in principle, arise.
7. 666. The Committee notes that the second allegation of a factual nature relates to the non-recognition of the UTGLAWU by management in several enterprises following privatization despite the fact that the union had managed to fulfil the stringent requirements set out in the Trade Unions Decree with regard to union recognition. The complainant further claims that one company in particular, Nytil Picfare Ltd., which employs 1,100 UTGLAWU members, has not only refused to recognize the union but has even refused to attend meetings convened by the Ministry of Labour for this purpose. As a result, other companies are following suit and refusing to recognize the union. The Committee notes that the Government, for its part, acknowledges that the problem of non-recognition of trade unions is a matter of concern to it and that it has tried to address this problem at tripartite meetings and by maintaining dialogue with the employers concerned. Moreover, the labour law revision process is another clear indication of the Government's genuine commitment to address this shared concern.
8. 667. The Committee would recall that it has always taken the view that nothing in Article 4 of Convention No. 98 places a duty on the Government to enforce collective bargaining by compulsory means with a given organization; such an intervention would clearly alter the nature of bargaining (see Digest, op. cit., para. 846). On the other hand, it has also taken the view that employers, including governmental authorities in the capacity of employers, should recognize for collective bargaining purposes the organizations representative of the workers employed by them or organizations that are representative of workers in a particular industry. If the union concerned is found to be the majority union, the authorities should take appropriate conciliatory measures to obtain the employer's recognition of that union for collective bargaining purposes (see Digest, op. cit., paras. 821, 823 and 824). In the situation at hand, the Committee notes that the UTGLAWU is the most representative, if not the sole, organization of workers in the textile sector in Uganda. The Committee further observes that the Government appears to have taken certain conciliatory measures to obtain the concerned employers' recognition of the UTGLAWU for collective bargaining purposes but, regretfully, to no avail. The Committee can only deplore this state of affairs which constitutes a flagrant violation of Article 4 of Convention No. 98, ratified by Uganda. Noting that the UTGLAWU has filed legal proceedings against a number of companies, namely Nytil Picfare Ltd., Vitafoam Ltd., Leather Industries of Uganda, Kimkoa Industry Ltd., Tuf Foam (Uganda) Ltd., and Marine and Agro Export Processing Co. Ltd., in order to obtain recognition for collective bargaining purposes, the Committee trusts that the decisions handed down will be in line with collective bargaining principles. The Committee requests the Government to keep it informed of the outcome of these various court proceedings.
9. 668. The Committee draws the attention of the Committee of Experts on the Application of Conventions and Recommendations to the legislative aspects of this case in relation to the application of Convention No. 98.

The Committee's recommendations

1. 669. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee requests the Government to take the necessary measures to ensure that sections 8(3) and 19(1)(e) of the Trade Unions Decree of 1976 are amended in line with freedom of association principles, including those enunciated in its conclusions. Noting the Government's indication that steps are already being taken to address this problem within the framework of the ongoing labour law reform process in the country, the Committee requests the Government to keep it informed of any developments in this regard.
   • (b) Noting that the Uganda Textile, Garments, Leather and Allied Workers' Union (UTGLAWU) has filed legal proceedings against a number of companies, namely Nytil Picfare Ltd., Vitafoam Ltd., Leather Industries of Uganda, Kimkoa Industry ltd., Tuf Foam (Uganda) Ltd. and Marine and Agro Export Processing Co. Ltd., in order to obtain recognition for collective bargaining purposes, the Committee trusts that the decisions handed down will be in line with collective bargaining principles. It requests the Government to keep it informed of the outcome of these various court proceedings.
   • (c) The Committee draws the attention of the Committee of Experts on the Application of Conventions and Recommendations to the legislative aspects of this case in relation to the application of Convention No. 98.

Annex I

1. =================================================================
2. Name of industry/company 1980s:
3. Total unionized members
4. =================================================================
5. 1. Nyanza Textile Industry Ltd. (NYTILI) 6 500
6. 2. MULCO 3 500
7. 3. African Textile Mills (ATM) 2 000
8. 4. Blue Bird 60
9. 5. Uganda Bags and Hessian Mills Ltd. (JUTE) 600
10. 6. Uganda Spinning Mills Ltd. 2 000
11. 7. Lango Development Co. Ltd-Lira 350
12. 8. Uganda Garments (1973) Ltd. 80
13. 9. Uganda Leather and Tanning Industry Ltd. 300
14. 10. Uganda Fish-Net Manufacturers Ltd. 250
15. 11. United Garments Industry Ltd. 600
16. 12. Uganda Blanket Manufacturers Ltd. 400
17. 13. Uganda Rayon Textiles Ltd. 500
18. Total membership during the 1980s 17 140
19. =================================================================
20. Annex II
21. The Office of the Minister of Justice/Attorney General
22. P.O. Box 7183
23. Kampala
24. The Republic of Uganda
25. 9 September 1997
26. The 3rd Deputy Prime Minister
27. Minister of Labour and Social Welfare
28. Crested Towers
29. Kampala
30. Dear Colleague,
31. Legal interpretation
32. I refer to your letter M/LSW/32 Vol. 1 dated 22 August 1997.
33. Although sections 8(3) and 19(1)(e) of the Trade Unions Decree No. 20 of 1976
34. provide for a minimum number of 1,000 members for the formation of a trade
35. union, and 51 per cent as a minimum requirement for recognition of a trade
36. union by an employer, respectively, the said provisions must, in terms of
37. article 273(1) of the Constitution, be construed in a manner designed to bring
38. them into conformity with the provisions of the Constitution.
39. Article 29(1)(e) of the Constitution provides that every person shall have the
40. right to freedom of association which shall include freedom to form and join
41. associations or unions, including trade unions. This right is further
42. reinforced by article 40(3) of the Constitution. Furthermore, article 36 of
43. the Constitution provides that minorities have a right to participate in
44. decision-making processes.
45. Sections 8(3) and 19(1)(e) of the said Trade Unions Decree are inconsistent
46. with articles 29(1)(e), 36 and 40(3) of the Constitution. Article 2(2) of the
47. Constitution provides that if any other law is inconsistent with any of the
48. provisions of the Constitution, the Constitution shall prevail, and the other
49. law shall, to the extent of the inconsistency, be void.
50. Clearly the quoted provisions of the said Trade Unions Decree are void since
51. they, in terms of the quoted constitutional provisions, curtail the rights of
52. persons to form or join trade unions.
53. Yours sincerely,
54. (Signed) Bart M. Katureebe, S.C.,
55. Minister of Justice/Attorney General