Report in which the committee requests to be kept informed of development - Report No 327, March 2002

Case No 2146 (Serbia) - Complaint date: 05-JUL-01 - Closed

Allegations: Violations of the organizational and collective bargaining rights of employers

1. 884. In a communication dated 5 July 2001, the Yugoslav Union of Employers (UPJ) submitted a complaint of violations of freedom of association and of collective bargaining rights against the Government of Yugoslavia.
2. 885. The Government sent its observations in a communication dated 28 August 2001.
3. 886. Yugoslavia has 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. 887. In its communication dated 5 July 2001, the Yugoslav Union of Employers (UPJ) alleges that the voluntary nature of collective bargaining in Yugoslavia is violated by the law on the Chamber of Commerce which provides in section 6 that one of the activities of the Chambers is to sign all collective agreements, while membership in the Chamber of Commerce is compulsory for all enterprises.
2. 888. The UPJ was founded in 1995 and membership in the organization of enterprises and employers is voluntary. As employers’ organizations can still not be registered as such in Yugoslavia, the UPJ was registered as a "citizens’ association". The Serbian Union of Employers (UPS) and the Montenegro Union of Employers (UPM) are both members of the UPJ and represent respectively 800 and 50 companies in their regions, as well as various branch associations. In 2001, the UPJ joined the South Eastern Europe Employers’ Forum (SEEEF) and, in the spring of 2001, the UPJ applied for membership to the International Organization of Employers (IOE).
3. 889. The complainant states that its organization, as well as the UPS and UPM, would like to start negotiations with the Trade Unions in Yugoslavia on a voluntary basis, in conformity with Convention No. 98. The complainant alleges however that under the law on the Chamber of Commerce, the outcome of their negotiations, i.e. the collective agreements, have to be signed by the Chamber of Commerce. The complainant considers that such a condition makes voluntary negotiation between the UPJ and the Trade Unions of Yugoslavia impossible. The complainant further alleges that a new draft law on the Chamber of Commerce of Serbia provides that membership in the Chamber is compulsory for all enterprises and that one of the tasks of the Chamber is to sign collective agreements. Thus, voluntary negotiations will not be possible in Serbia either. The complainant therefore requests that appropriate initiatives be taken to ensure that real voluntary negotiations can take place at the national level, as well as at the level of Serbia and of Montenegro, without the requirement that all collective agreements be signed by the Chambers of Commerce.

B. The Government's reply

1. 890. In its communication dated 28 August 2001, the Government asserts that the allegations are unfounded because the federal regulations do not violate the provisions of ILO Conventions, including Convention No. 98. The Government recalls that article 41 of the Constitution of the Federal Republic of Yugoslavia guarantees the freedom of political, trade union and other associations and actions of citizens, without prior approval, with registration with the competent authority. Moreover, the Law on Employment devotes a separate section to collective agreements without specifying what entities will conclude such agreements.
2. 891. As concerns section 6 of the law on the Yugoslav Chamber of Commerce, the Government asserts that this provision concerns the participation in the conclusion and implementation of collective agreements, but does not imply any exclusive right of the Chamber to conclude collective agreements, nor are other organizations excluded from this right. The very fact that membership in the Chamber is compulsory does not mean that collective bargaining cannot be done on a voluntary basis, nor is the Chamber authorized to supervise the negotiations and their results.
3. 892. The Government concludes that it is not in the interest of the federal Government to determine which organizations of workers and employers will participate in the collective bargaining process, but rather is for the organizations themselves to win their own positions on the basis of the principle of representation.

C. The Committee's conclusions

1. 893. The Committee notes that the allegations in this case concern restrictions placed upon the right of employers to form and join the organization of their own choosing and to bargain collectively as a result of obligatory membership in the Chamber of Commerce and the requirement that the Chamber signs agreements negotiated by the complainant organization and its affiliates.
2. 894. In this respect, the Committee notes the Government’s assertion that the Constitution of the Republic guarantees the right of association to all and that section 6 of the law on the Chamber of Commerce, referred to by the complainant, refers only to participation in the conclusion and implementation of collective agreements, but does not imply any exclusive right of the Chamber to conclude collective agreements, nor does it exclude any other organizations from so doing. The Committee notes however that, while it is not clear from the legislation, the Government does admit that membership in the Chamber of Commerce is compulsory and then goes on to state that participation in the collective bargaining process depends on the principle of representation.
3. 895. In the first instance, the Committee emphasizes that Article 2 of Convention No. 87 provides that employers shall have the right to establish and join the organization of their own choosing. The Committee therefore considers that compulsory membership in Chambers of Commerce when such Chambers have the powers of employers’ organizations in the meaning of Article 10 of Convention No. 87 would be contrary to freedom of association standards and principles. It derives from this principle that, just as for trade unions, questions concerning the financing of employers’ organizations as regards both their own budgets and those of federations and confederations should be governed by the by-laws of the organizations themselves. Considering that the powers and activities set forth in the Yugoslav Law on the Chamber of Commerce include those within the purview of employer organizations within the meaning given by Convention No. 87, the Committee requests the Government to take the necessary steps to repeal all provisions of this law which would give rise to compulsory membership or financing. The Committee requests the Government to keep it informed of the progress made in this regard.
4. 896. As concerns the right to collective bargaining, the Committee recalls that the voluntary negotiation of collective agreements, and therefore the autonomy of the bargaining partners, is a fundamental aspect of the principles of freedom of association [see Digest of decision and principles of the Freedom of Association Committee, 4th edition, 1996, para. 844]. While noting that the law on the Chamber of Commerce does not appear in itself to provide a monopoly to the Chamber of Commerce to conclude collective agreements, the Committee takes due note of the complainant’s allegation that any collective agreement resulting from negotiations must be signed by the Chamber of Commerce, particularly in the light of the Government’s indication that collective bargaining should be conducted on the basis of representativeness and in the light of the compulsory nature of the membership of the Chamber of Commerce. The Committee is of the opinion that the principle of representation for collective bargaining purposes cannot be applied in an equitable fashion in respect of employers’ associations if membership in the Chamber of Commerce is compulsory and the Chamber of Commerce is empowered to bargain collectively with trade unions.
5. 897. While noting that the Law on Employment, referred to by the Government, does not set out in any express manner the associations which are to participate in collective bargaining at the various levels, the Committee is of the opinion that the employers concerned should be able to choose the organization which they wish to represent their interests in the collective bargaining process. Furthermore, the Committee considers that granting collective bargaining rights to the Chamber of Commerce which is created by law and to which affiliation is compulsory impairs the employers’ freedom of choice in respect of the organization to represent their interests in collective bargaining. The Committee therefore trusts that the Government will take the necessary measures to ensure that employers may freely choose the organization they wish to represent their interests in the collective bargaining process and that the results of any such negotiations will not be subjected to the approval of the legislatively constituted Chamber of Commerce. The Committee requests the Government to keep it informed of the progress made in this regard.

The Committee's recommendations

1. 898. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) Considering that the powers and activities set forth in the Yugoslav Law on the Chamber of Commerce include those within the purview of employer organizations within the meaning given by Convention No. 87, the Committee requests the Government to take the necessary steps to repeal all provisions of this Law which would give rise to compulsory membership or financing. The Committee requests the Government to keep it informed of the progress made in this regard.
   • (b) The Committee recalls the importance it attaches to the voluntary nature of collective bargaining and trusts that the Government will take the necessary measures to ensure that employers may freely choose the organization they wish to represent their interests in the collective bargaining process, and that the results of any such negotiations will not be subjected to the approval of the legislatively constituted Chamber of Commerce. The Committee requests the Government to keep it informed of the progress made in this regard.