Definitive Report - Report No 342, June 2006

Case No 2337 (Chile) - Complaint date: 26-FEB-04 - Closed

Allegations: Practices used by the enterprise to obstruct the collective bargaining process; dismissal of delegates and members of the complainant trade union; pressure applied by the enterprise to force members working at two branches to resign from the trade union; non-compliance with collective agreements, in particular, deduction of benefits arising under those agreements; the enterprise’s refusal to recognize the affiliation to the ING AFP (Pension Fund Administrator) Santa María S.A. Trade Union of workers whose labour contracts were modified by the enterprise, with the result that this trade union is running short of money and its existence is under threat

277. The Committee examined this case at its June 2005 meeting [see 337th Report, paras. 425-450] and presented an interim report to the Governing Body. The Government sent its observations in communications dated 4 November 2005 and 15 February 2006.

1. 278. Chile 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. Previous examination of the case

1. 279. In its May 2005 meeting, the Committee made the following recommendations [see 337th Report, para. 450]:
2. (a) The Committee expresses its concern in observing the numerous anti-trade union practices ongoing within the ING Seguros de Vida S.A. and AFP Santa María enterprises, which were verified by the administrative and judicial authorities and requests the Government to take the necessary measures to ensure that Conventions Nos. 87 and 98 are fully respected within the abovementioned enterprises.
3. (b) As to the practices allegedly employed by the enterprise to prevent collective bargaining by workers, belonging both to the National Trade Union of Workers of ING Seguros de Vida S.A. (SNTISV) and the Trade Union ING AFP Santa María in 2003, in that the enterprise refused to participate in the collective bargaining process, the Committee highlights the principle that, while the question as to whether or not one party adopts an amenable or uncompromising attitude towards the other party is a matter for negotiation between the parties, both employers and trade unions should bargain in good faith making every effort to reach an agreement. The Committee requests the Government to take measures to ensure that in the future the ING Seguros de Vida S.A. and AFP Santa María enterprises respect this principle and abstain from employing anti-trade union practices such as those verified by the Labour Inspectorate.
4. (c) With regard to the dismissal of delegates and members of the SNTISV subsequent to the 2003 collective bargaining process, the Committee invites the complainant organization to communicate any information regarding the number of individuals dismissed and any facts that may indicate that the dismissals are linked to the exercise of trade union rights.
5. (d) As to the alleged pressure for workers to withdraw from the SNTISV, the Committee deplores the pressure of an anti-trade union nature verified by the judicial authority and requests the Government to take the measures necessary to ensure that the enterprise ING Seguros de Vida S.A. abstains from such practices, as well as from offering benefit packages to workers in return for not joining the trade union, as stated by the Government. The Committee also deplores the fact that these practices led to the workers feeling compelled to leave the trade union.
6. (e) As to the enterprise’s alleged failure to comply with the collective agreements, the Committee requests the Government to take the necessary measures to ensure that the ING Seguros de Vida S.A. respects the legislation and the collective agreement which was extended for 18 months in light of article 369 of the Labour Code.
7. (f) As to the enterprise’s alleged refusal to recognize as members of the Trade Union ING AFP Santa María those workers whose labour agreements were amended by the enterprise and excluded them from the scope of the collective bargaining process, the Committee notes that these facts were verified by the judicial authority and requests the Government to take the necessary measures to prevent the enterprise from having recourse to anti-trade union practices in the future.
8. (g) The Committee requests the Government to solicit information from the employers’ organizations concerned, with a view to having at its disposal their views, as well as those of the enterprises concerned, on the questions at issue.
9. B. The Government’s reply
10. 280. In its communications dated 4 November 2005 and 15 February 2006, the Government sent communications from ING Seguros de Vida S.A. and the National Trade Union of ING Seguros de Vida S.A. (SNTISV).
11. 281. ING Seguros de Vida S.A. states that it must be borne in mind that, towards the end of 2001, ING acquired ownership of various companies operating in Chile, including Aetna Seguros de Vida S.A., Aetna Seguros Generales S.A., Cruz Blanca Isapre S.A. and Administradora de Fondos de Pensiones Santa María S.A. Some of these had previously been owned by United States enterprises, others by Chilean concerns. Subsequently, a number of companies merged with existing Chilean ING enterprises – this was the case with ING Seguros de Visa S.A., among others. The companies were all different in terms of management style, technology, human resources policy and salary scale. Consequently, one of the first steps taken was to carry out a survey of the employment situation in each company, so as to examine what organizational system should be introduced in each case and what changes should be made in the staff salary scale.
12. 282. All this took place in 2002, and in August 2002 a new, single, salary and benefits scale was proposed and agreed to by all the administrative personnel in the various ING companies; with some minor adjustments, this is the one that is in force today. The scale was agreed to all the more readily because for many of the administrative employees it meant a substantial increase in salary and benefits. The same happened in February 2003, when the sales staff of the various ING companies were offered and agreed to, a similar scale of wages – and especially benefits – that applied to everyone.
13. 283. According to the enterprise, at the time of this report the differences have been resolved, and both the trade union officials and the workers affiliated to the aforementioned unions are governed by the same rules that apply to all ING employees. The court cases have been dropped, the benefits have been incorporated into the individual contracts, and a collective agreement dated 31 March 2005 has been signed with the members of the AFP Santa María S.A. Trade Union, running for a little over two years from 1 March 2005 to 30 June 2007. Currently, there are no grounds for the complaints submitted to the ILO Committee on Freedom of Association, though the Government repeats that ING Seguros de Vida S.A. and AFP Santa María S.A. maintain that there never was any threat to freedom of association.
14. 284. As to the alleged violation of the right to collective bargaining, the enterprise draws attention to the fact that, under Chilean legislation, the right to collective bargaining is written into the Constitution and is regulated by the Labour Code. Both the SNTISV and the AFP Santa María S.A. Trade Union have freely exercised their legal right to bargain collectively. On 26 December 2001 a collective agreement was signed with the workers affiliated to the AFP Santa María S.A. Trade Union, in accordance with the relevant laws and regulations. On 1 June 1999 a collective agreement was signed between Aetna Chile Seguros de Vida S.A. and the workers affiliated to the Aetna Seguros de Vida Trade Union. In other words, the workers have freely exercised their right to collective bargaining in full.
15. 285. The enterprise points out that, notwithstanding the above, circumstances did arise during the last two collective bargaining processes that affected relations between the two parties – though this can in no way be considered as having prevented the workers from bargaining collectively. In negotiations with ING Seguros de Vida S.A. in June 2003, when no agreement was reached, the workers exercised their prerogative under section 369 of the Labour Code to extend the existing collective agreement by 18 months. The right to do this under Chilean legislation applies only to workers who engage in collective bargaining. In no way can this be deemed a refusal to negotiate; on the contrary, it is one way of concluding a collective bargaining process. Furthermore, in the negotiations held with AFP Santa María S.A. in December 2003, the enterprise exercised its right to express legal reservations as to the admissibility of bargaining with a certain group of workers. Both of these situations are entirely governed by the law and the exercise of a legal right cannot be considered a refusal to bargain collectively.
16. 286. The enterprise states that the fact that neither ING Seguros de Vida S.A. nor AFP Santa María S.A. was prepared to negotiate any benefit other than those covered by each employee’s contract cannot be interpreted as a refusal to bargain collectively either. On 31 March 2005 the AFP Santa María S.A. Trade Union negotiated a collective agreement with the general management of the company, which is currently in force. In the case of the SNTISV, there is neither a contract nor a collective agreement and workers affiliated to the union therefore have the same rights and benefits as the rest of the company’s employees.
17. 287. As to the alleged dismissal of trade union officials, the enterprise states that no union official has been dismissed. Under the country’s labour legislation, prior authorization from a competent judge is required before a trade union official can be dismissed. None of the companies of the ING group has initiated legal proceedings to remove the immunity of any of its trade union officials. What did happen is that some union officials, at their request, entered into an agreement to leave the enterprise; this they did of their own free will and in accordance with the laws and regulations in force. The workers fully supported this arrangement, which was actually requested by the union officials and was introduced with the knowledge and authorization of the courts themselves.
18. 288. Regarding the alleged pressure to force workers to resign from the trade union, the enterprise states that it has never exercised any such pressure. Freedom of association is fully respected by the various companies of the ING group, approximately 6 per cent of whose workforce are union members. What workers describe as pressure after the company changed hands is just their way of saying that, when the ING group of companies was reorganized, the sales staff received all the severance pay and compensation to which they were entitled before being laid off. Later, a large number of them were rehired under new terms of remuneration and benefits; one of the legal implications of this is that their union membership was terminated, but they can rejoin whenever they want.
19. 289. As to the alleged non-compliance with collective agreements, the enterprise states that it has not failed to meet any of its commitments under individual contracts or collective agreements. What occurred was a dispute between the AFP Santa María S.A. Trade Union and the enterprise over the interpretation of the collective agreement of 26 December 2001 as it related to the source of certain payments. This led to two court cases (Nos. 4520-2003 and 2667-2004) being brought before the Ninth Labour Court of Santiago. These have now been settled once and for all, with the agreement of both parties, under a deal approved by the competent court. The ING stresses that it does respect, and always has respected, the laws and regulations in force and that its workers are the very backbone of the group. Furthermore, as can easily be proved, whenever there has been a dispute with any of the trade unions it has been submitted to the competent court for decision.
20. 290. The Government attaches with its reply a communication dated 29 August 2005 from the SNTISV, which states that, so long as the employer violates the provisions of the labour legislation and flaunts the resolutions of the Labour Directorate, it will continue to inform the competent authorities – as often as necessary – of any activity that might be to the detriment of either the freedom of association of the workers or an instrument governing their collective labour relations. The complainant organization states that it trusts that the recommendations of the labour authority, along with the machinery for enforcing the relevant laws and regulations, really will improve labour relations in the enterprise. In the event that the involvement of the labour authority fails to do this, the trade union will have no option but to direct its complaints to whomever it deems fit, possibly including workers’ organizations in other countries.

C. The Committee’s conclusions

1. 291. The Committee recalls that the outstanding allegations in this case relate to practices employed by ING Seguros de Vida S.A. to prevent collective bargaining, dismissal of delegates and members of the complainant trade union, pressure by the enterprise to force members working at two branches to resign from their trade union, non-compliance with collective agreements, and the enterprise’s refusal to recognize the affiliation to the AFP Santa María S.A. Trade Union of workers whose employment contracts it had modified, with the result that the union is running short of money and its existence is under threat. The Committee observes that, regarding the recommendations it made when it last examined this case at its meeting in June 2005 [see 337th Report, para. 450], the Government has sent information it had received from ING Seguros de Vida S.A. and from the complainant trade union.
   • Recommendation (a)
2. 292. The Committee expresses its concern about the numerous anti-trade union practices that the administrative and legal authorities have verified at ING Seguros de Vida S.A. and AFP Santa María S.A. The Committee notes that ING Seguros de Vida S.A. states that the differences that existed have been resolved and that both union officials and the workers affiliated to the said unions are now governed by the same rules and regulations that apply to all employees of the various ING companies; the court cases have been dropped, the benefits have been incorporated into the individual contracts and a collective agreement, dated 31 March 2005, has been signed with the members of the AFP Santa María S.A. Trade Union, running for a little over two years from 1 March 2005 to 30 June 2007; currently, there are no grounds for the complaints submitted to the ILO Committee on Freedom of Association, though ING Seguros de Vida S.A. and AFP Santa María S.A. maintain that, in their view, there never was any threat to freedom of association. The Committee also notes the communication from the complainant organization that was sent by the Government which states that, so long as the enterprise violates the provisions of the labour legislation and flaunts the resolutions of the Labour Directorate, it will continue to inform the competent authorities of any activity that might be to the detriment of either the freedom of association of the workers or any instrument governing their collective labour relations.
   • Recommendation (b)
3. 293. As to the practices allegedly employed by the enterprise to prevent collective bargaining by workers affiliated both to the SNTISV and the AFP Santa María S.A. Trade Union in 2003, by refusing in practice to negotiate, the Committee requested the Government to take measures to ensure that in future ING Seguros de Vida S.A. and AFP Santa María S.A. respect this principle and abstain from employing anti-trade union practices such as those verified by the Labour Inspectorate. The Committee notes the enterprise’s statement that: (1) under Chilean legislation, the right to collective bargaining is written into the Constitution and is regulated by the Labour Code, and both the SNTISV and the AFP Santa María S.A. Trade Union have freely exercised their legal right to bargain collectively; (2) on 26 December 2001, a collective agreement was signed with the workers affiliated to the AFP Santa María S.A. Trade Union in accordance with the relevant laws and regulations; (3) in negotiations with ING Seguros de Vida S.A. in June 2003, when no agreement was reached, the workers exercised their prerogative under section 369 of the Labour Code to extend the existing collective agreement by a further 18 months; (4) on 31 March 2005, the AFP Santa María S.A. Trade Union negotiated a collective agreement with the general management of the company, which is currently in force; and (5) in the case of the SNTISV, there is neither a contract nor a collective agreement and workers affiliated to the union therefore have the same rights and benefits as the rest of the company’s employees. The Committee notes with interest that a collective agreement has been concluded between the enterprise and the AFP Santa María S.A. Trade Union. However, the Committee requests the Government to endeavour to effectively promote and encourage the full development and use of voluntary negotiation procedures between the enterprise and the SNTISV, with a view to regulating employment conditions through collective agreements.
   • Recommendation (c)
4. 294. With regard to the dismissal of delegates and members of the complainant trade union (SNTISV) subsequent to the 2003 collective bargaining process, the Committee invited the complainant organization to send details of the names of those dismissed and any facts that may indicate that the dismissals were linked to the exercise of trade union rights. The Committee observes that the complainant organization has not provided the information requested. On the other hand, the Committee notes that ING Seguros de Vida S.A. states that none of the companies of the ING group has initiated legal proceedings to lift the immunity of any of its trade union officials, but that some union officials have entered into an agreement to leave the enterprise of their own free will, in accordance with the laws and regulations in force.
   • Recommendation (d)
5. 295. As to the alleged pressure on workers to withdraw from the complainant trade union (SNTISV), the Committee deplored the pressure of an anti-trade union nature verified by the judicial authority and requested the Government to take the measures necessary to ensure that ING Seguros de Vida S.A. abstains from such practices, as well as from offering benefit packages to workers in return for not joining the trade union, as stated by the Government. The Committee notes that ING Seguros de Vida S.A. states that: (1) it has never exercised any pressure to force workers to resign from their trade union; and (2) what workers describe as pressure after the company changed hands was in fact a reorganization of the ING group of companies, in the process of which the sales staff received all the severance pay and compensation to which they were entitled before being laid off; a large number of them were rehired under new terms of remuneration and benefits and could rejoin their union if they wished. Given the contradictions between the enterprise’s statement and the Government’s reply that was examined in June 2005, which reported that the judicial authority had fined the enterprise for the alleged occurrences [see 337th report, para. 445], the Committee requests the Government to see, in accordance with the judicial decision, that its previous recommendations are complied with, by taking the effective measures necessary to ensure that ING Seguros de Vida S.A. does not exert pressure on its workers to resign from the complainant organization and that workers are able to maintain their union membership.
   • Recommendation (e)
6. 296. As to the enterprise’s alleged failure to comply with the collective agreements, the Committee requested the Government to take the necessary measures to ensure that ING Seguros de Vida S.A. respected the legislation and the collective agreement that was extended by 18 months in the light of article 369 of the Labour Code. The Committee notes the enterprise’s statement that: (1) it has not failed to meet any of its commitments under individual contracts or collective agreements; what occurred was a dispute between the AFP Santa María S.A. Trade Union and the enterprise over the source of certain payments under the collective agreement, which led to two court cases that have now been settled under a deal approved by the competent court; and (2) when no agreement was reached in the collective bargaining of June 2003, the workers of ING Seguros de Vida S.A. exercised their prerogative under section 369 of the Labour Code to extend the existing collective agreement.
   • Recommendation (f)
7. 297. As to the alleged refusal of AFP Santa María S.A. to recognize the affiliation to the AFP Santa María S.A. Trade Union of workers whose employment contracts were modified, or to include them in the collective bargaining process, the Committee noted that these facts were verified by the judicial authority and requested the Government to take the necessary measures to prevent the enterprise from having recourse to anti-trade union practices in the future. In this regard, the Committee notes the enterprise’s statement that it has always respected the laws and regulations in force, that its workers are the very backbone of the group and that, where there has been a dispute with any of the trade unions, it has been submitted to the competent court for decision. Given that the alleged events were verified and confirmed by the administrative and judicial authorities [see 337th Report, para. 447], the Committee requests the Government to ensure that its previous recommendations are complied with, by taking the necessary effective measures to prevent the enterprise in future from resorting to anti-trade union practices.

The Committee's recommendations

1. 298. 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 endeavour to effectively promote and encourage the full development and use of voluntary negotiation procedures between ING Seguros de Vida S.A. and the National Trade Union of ING Seguros de Vida S.A. (SNTISV), with a view to regulating employment conditions through collective agreements.
   • (b) Given the contradictions between the enterprise’s statement and the Government’s reply, and specifically that the judicial authority fined the enterprise for the alleged occurrences, the Committee requests the Government to ensure, in conformity with the judicial decisions, that its previous recommendations are complied with, by taking the effective measures necessary to ensure that ING Seguros de Vida S.A. does not exert pressure on its workers to resign from the complainant organization and that workers are able to maintain their union membership.
   • (c) As to the alleged refusal of AFP Santa María S.A. to recognize the affiliation to the AFP Santa María S.A. Trade Union of workers whose employment contracts were modified, or to include them in the collective bargaining process, the Committee notes that these facts were verified by the judicial authority and requests the Government to ensure that its previous recommendations are complied with, by taking the necessary effective measures to prevent the enterprise in future from resorting to anti-trade union practices.