Report in which the committee requests to be kept informed of development - Report No 325, June 2001

Case No 2099 (Brazil) - Complaint date: 24-AUG-00 - Closed

Allegations: Failure to engage in collective bargaining;

exclusive bargaining with higher level trade union

• organizations; discrimination against trade union officers
• and insufficient protection against arbitrary dismissal
  182. 182 The complaint in this case is contained in a communication from the National Confederation of Financial Institutions Workers (CNTIF), dated 24 August 2000. On 11 January 2001, the Government sent the reply of Banco do Brasil S.A., dated 8 December 2000.
  183. 183 Brazil has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), but has ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), and the Workers’ Representatives Convention, 1971 (No. 135).

A. The complainant’s allegations

1. 184. In its communication of 24 August 2000, the National Confederation of Financial Institutions Workers (CNTIF), which groups together 180 banking trade unions and seven federations, and is affiliated to the Single Central Organization of Workers (CUT), states that the Government of Brazil, through Banco do Brasil S.A., a mixed enterprise, fails to comply with Conventions Nos. 98, 135 and, therefore, 87, for the following reasons.
2. 185. The CNTIF states that up to and including August 1999, Banco do Brasil S.A. negotiated with its employees their share in the profits and results of the enterprise, as provided for in the Political Constitution and regulated by Provisional Measure No. 1982-67. This profit-sharing was decided upon with trade union participation, either through direct negotiation and conclusion of the collective agreement, or through a negotiating committee whose members were designated by the parties (the trade union in question was represented in this committee). However, the complainant alleges that, in violation of the aforementioned provisions, Banco do Brasil S.A. unilaterally changed these profit-sharing arrangements, and the Government endorsed this by amending the abovementioned Provisional Measure. According to the complainant, these acts constitute an infringement of collective freedom of association, and this is corroborated by the fact that the Federal Supreme Court reaffirmed the obligation to ensure that trade unions are present in negotiating committees.
3. 186. The CNTIF alleges further that Banco do Brasil S.A. is excluding the trade unions from collective bargaining by holding talks with the National Confederation of Workers of Credit Enterprises (CONTEC), whereas the trade unions had specifically withdrawn this Confederation’s authority to negotiate. The decision to withdraw this authority was made by a workers’ assembly and notified to both the Confederation and the enterprise. The complainant maintains that the trade unions affiliated to CONTEC should maintain their freedom of association in the negative sense, meaning the freedom not to be represented in all areas by higher level organizations. However, the case law of the Supreme Labour Tribunal indicates that in the case of a collective dispute, confederations can act without the authorization of a trade union assembly. The complainant adds that Banco do Brasil S.A. even refuses to formalize collective bargaining with the trade unions, but not that with CONTEC. Furthermore, according to the Supreme Labour Tribunal, confederations have exclusive competence for resolving nationwide collective disputes, regardless of the wishes of first-level organizations. According to the complainant, this reversal is dangerous in that the representative nature of the Confederation is not legitimized directly by the workers, but by a council of representatives, and that trade union representativity is disregarded.
4. 187. The CNTIF also alleges that between 1 September 1999 and 31 August 2000, which coincided with the term of the collective agreement then in force, the bank demanded a reduction in the number of trade union officers who carried out their duties at the cost of the enterprise, and the deletion of the clause referring to representatives of first-level trade unions (which was still applicable during the term of the 1998-99 agreement), thus refusing to recognize the right to organize at the workplace. According to the complainant, this deletion violates ILO Convention No. 135, which has been ratified by Brazil.
5. 188. Lastly, the CNTIF states that Banco do Brasil S.A., despite the fact that it is part of the public administration, does not provide its employees with adequate protection against arbitrary dismissal (in 1997 over 500 employees were dismissed without just cause). In this regard, it points out that the bank considers “dismissal” to be a “sanction” for breach of discipline, thus enabling it to dismiss without justification senior employees and those recruited through competitions, even after long periods of service, in order to employ “interns” to make up for obviously inadequate staffing levels.

B. The Government’s reply

1. 189. With regard to the first allegation, the Government states that the bank has reached an agreement with the trade unions concerning profit-sharing, and distributes a share of the profits amongst employees in accordance with a programme based on the relevant Provisional Measure and approved by the supervisory body of the federal Government. There is a collective agreement which provides for negotiations regarding this matter.
2. 190. As for the allegation that Banco do Brasil S.A. engages in collective bargaining with a confederation without the consent of the trade unions and contrary to decisions taken in assembly, the Government states that it does not agree with the complainant asserting that Banco do Brasil S.A. negotiates and signs collective agreements with both the National Confederation of Workers of Credit Enterprises (CONTEC) and the trade unions. CONTEC is the national confederation legally authorized to represent banking employees on a national scale, in accordance with the federal Constitution and the legislation in force. It is therefore surprising that an organization with which the bank has never held negotiations has presented a complaint to the ILO.
3. 191. Concerning the alleged discriminatory treatment of trade union leaders, the Government states that Banco do Brasil S.A. has nearly 100 employees who have paid time off to carry out their trade union duties, entirely at the cost of the enterprise. It should be noted that during collective bargaining, the parties adopt strategic positions that are not always satisfactory for both sides. Therefore, to allow these complaints is to fail to recognize the negotiating process, which is aimed at reaching a settlement by consensus.

C. The Committee’s conclusions

1. 192. The Committee notes that the complainant alleges that, in violation of the right to collective bargaining and contrary to previous practice, Banco do Brasil S.A., a mixed enterprise that up until September 1999 engaged in collective bargaining with its employees concerning profit-sharing arrangements decided to change this profit-sharing system unilaterally. The Committee also notes that the Government endorsed this change by reflecting it in the Provisional Measure governing this issue. The Committee observes that according to the Government a collective agreement exists in which bargaining on all these issues is provided for. The Committee recalls that in the view of the Committee of Experts, it is contrary to the provisions of Convention No. 98 to exclude from collective bargaining certain issues such as those relating to conditions of employment. Furthermore, measures taken unilaterally by the authorities to restrict the scope of negotiable issues are often incompatible with the Convention [see General Survey on freedom of association and collective bargaining, 1994, paras. 265 and 250]. The Committee requests the Government to keep it informed of the outcome of the projected negotiations.
2. 193. With regard to collective bargaining between Banco do Brasil S.A. and a trade union confederation which did not have the approval of first-level trade unions, and which had been denied the authority to negotiate by the latter, the Committee observes that article 8 of the federal Constitution enshrines trade union monopoly by prohibiting the establishment of more than one trade union organization at any level representing a professional or economic category in the same territorial division. The Committee also notes that, according to the Government, CONTEC is the national confederation legally authorized to represent banking employees on a national scale. Similarly, the Committee observes that, according to the complainant, Banco do Brasil S.A. also refuses to formalize collective bargaining carried out with the trade unions, but not that held with CONTEC. It notes, moreover, that according to the case law of the Supreme Labour Tribunal, in the case of collective disputes, confederations can act without the authorization of a trade union assembly, and that trade union confederations are competent to settle nationwide collective disputes, regardless of the wishes of first-level organizations. In these circumstances, the Committee recalls that according to the principle of free and voluntary collective bargaining embodied in Article 4 of Convention No. 98, the determination of the bargaining level is essentially a matter to be left to the discretion of the parties and, consequently, the level of negotiation should not be imposed by law, by decision of the administrative authority or by the case law of the administrative labour authority [see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 851]. Furthermore, the Committee emphasizes that the imposition by law of the trade union monopoly is not compatible with the principles of freedom of association, and, therefore urges the Government to ensure that national law is brought into conformity with these principles. Lastly, the Committee draws this legal aspect of the case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.
3. 194. Regarding the allegedly discriminatory treatment of trade union officers and representatives within the enterprise, the Committee notes that, according to the complainant, Banco do Brasil S.A. has reduced the number of trade union leaders authorized to carry out their duties at the cost of the enterprise. In these circumstances, although the Committee does not consider this reduction to be contrary to the principles of freedom of association, given that it is the result of collective bargaining, it requests the Government to prevent any discrimination between trade unions in this context.
4. 195. Lastly, concerning the allegation of inadequate protection against arbitrary dismissal, the Committee notes that the complaint does not mention that these dismissals are the result of anti-union measures. Therefore, it will not pursue its examination of this matter.

The Committee's recommendations

1. 196. 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 keep it informed of the outcome of the projected negotiations on the participation of employees of Banco do Brasil S.A. concerning profit-sharing arrangements.
   • (b) The Committee recalls that according to the principle of free and voluntary collective bargaining embodied in Article 4 of Convention No. 98, the determination of the bargaining level is essentially a matter to be left to the discretion of the parties. The Committee also emphasizes that the imposition by law of a trade union monopoly is not compatible with the principles of freedom of association, and therefore urges the Government to ensure that national law is brought into conformity with these principles.
   • (c) Although the Committee does not consider the reduction in the number of trade union representatives authorized to carry out their duties at the cost of the enterprise to be contrary to the principles of freedom of association, given that it is the result of collective bargaining, it requests the Government to prevent any discrimination between trade unions in this context.