Definitive Report - Report No 348, November 2007

Case No 2492 (Luxembourg) - Complaint date: 29-MAY-06 - Closed

Allegations: The complainant organization, legally set up in July 2004, and representing more than 75 per cent of all agents of the Central Bank of Luxembourg (agents with public law status), alleges that the authorities refuse to grant it the necessary approval to guarantee the collective defence of its members’ interests, despite a number of requests on this matter since October 2004

967. The initial complaint is contained in a communication from the Professional Association of Agents of the Central Bank of Luxembourg (A-BCL) dated 1 June 2006 and has been supplemented by communications dated 10 August and 20 December 2006.

1. 968. The Government of Luxembourg transmitted its reply in communications dated 19 July, 24 November and 28 December 2006.
2. 969. The Government of Luxembourg has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Workers’ Representatives Convention, 1971 (No. 135), and the Labour Relations (Public Service) Convention, 1978 (No. 151).

A. The complainant organization’s allegations

1. 970. The A-BCL alleges that the Government has failed to respect its commitments with respect to freedom of association, especially those it has made under Conventions Nos 87 and 151; above all, it has prevented the A-BCL from fulfilling its trade union role of promoting and defending the interests of the agents and employees of the Central Bank of Luxembourg (BCL).
2. 971. The A-BCL was set up on 14 July 2004, in accordance with the amended Act of 21 April 1928 on non-profit associations and foundations. Its aim is the collective defence of the professional, social, moral and material interests – in the broader sense of the term – of its members who are all agents of the BCL; it also acts as their occupational representative vis-à-vis the BCL management and within any other official body of concern to its members. The A-BCL statutes were published in Memorial C, No. 964 of 28 September 2004, pages 46236–46238 and, from that time on, has had legal personality in accordance with the provisions of section 3 of the amended Act of 21 April 1928 on non-profit associations and foundations in Luxembourg. This legal personality entitles it to all legal rights of a subject of law, such as the rights to take court action and benefit from the application of legal provisions concerning its organization and functioning. The A-BCL membership includes 153 agents – out of a total of 198 agents working for the BCL. It is the only trade union association within the BCL and therefore the only possible partner for social dialogue with the BCL management. Accordingly, its representativeness within the BCL cannot be called into question.
3. 972. Agents working for the BCL have the status of government employees under the legislation of Luxembourg, ensuing from the amended Act of 27 January 1972 establishing rules for government employees; they have the same public law status as civil servants. In the area of staff representation, the public service has a particular status. In ministries, administrations and public institutions, staff representative bodies are freely set up by their constituent members alone, without any interference on the part of the Government. It is for this reason that section 36 of the amended Act of 16 April 1979, establishing the legal status of civil servants (Act of 1979), introduced a mechanism whereby the most representative body is granted ministerial authorization to defend the staff’s interests. Section 36 reads as follows: “Occupational associations within administrations, service industries and state institutions may be authorized, under an Order from the competent minister, to represent the staff on whose behalf they are acting.” The system introduced by section 36 is certainly the most democratic possible, in that freedom of association is fully respected by the regulations pertaining to it.
4. 973. Under section 11(1) of the Act of 23 December 1998 concerning the monetary status and the BCL, “the Board of Directors is the higher executive authority of the Central Bank”. Consequently, the competence granted to the competent minister under section 36, i.e. to grant authorization to an organization called upon to guarantee the collective defence of its members’ interests, is incumbent, in the case of the BCL, upon the management of this bank. On 4 October 2004, the A-BCL requested the management of the BCL to grant it authorization to represent the occupational interests of its members. At the time of the complaint, the BCL management had still failed to communicate an actual decision concerning the request for the abovementioned authorization – either to say that the requested authorization had been granted or to say that it had been refused on legal grounds.
5. 974. In a letter enclosed with the complaint, submitted on 23 March 2005 to the Minister of Finance – who is supervisory minister of the BCL in all areas – with the exception of financial matters over which the BCL has full autonomy, the A-BCL complained about the lack of reaction from the BCL management and requested the Minister to approach the management so that it might grant the authorization requested, as all the legal conditions for obtaining it were fulfilled. However, there was no reply to this letter. The A-BCL then decided to approach the Ministerial Council on 21 July 2005 (document enclosed). The Minister of Finance finally replied, on behalf of the Ministerial Council of the Grand Duchy of Luxembourg, in a letter dated 31 October 2005; in the first place, it disputed the A-BCL’s right to act collectively as an occupational association on the legal grounds raised and pointed out that the complaint was unfounded, given that section 36 of the Act of 1979 merely left it up to the BCL management to grant authorization but did not make it an obligation (document enclosed). At the time of this complaint, the A-BCL had not obtained the approval it had requested from the BCL management on 4 October 2004 who, moreover, refused to recognize it as the occupational representative of BCL agents. According to the complainant organization, this situation was intolerable; although it fulfilled all the legal requirements to obtain recognition as occupational representative of BCL agents, it had still not, two years after its establishment, been officially acknowledged by the BCL board of directors, and the Government had not taken any steps to make up for this shortcoming.
6. 975. This failure of the BCL management to recognize the A-BCL was even more serious, given that one of the members of the A-BCL’s administrative council had recently been dismissed by the BCL management; at that time, he had been both vice-chairperson and secretary of the A-BCL and, as such, should have been protected by the legal ban to dismiss a delegate of BCL agents. The A-BCL management, to justify that this dismissal of the A-BCL official had been legal, stated that it was not bound to respect any ban because the A-BCL had not been recognized. The A-BCL then rightly surmised that the management had deliberately avoided recognizing the A-BCL as an official representative of BCL agents so that it could dispense with any legal protection for a BCL staff representative.
7. 976. The A-BCL is of the opinion that “ministerial authorization” is supposed to acknowledge the representative nature of the occupational association making the request. If staff organizations are set up and enjoy a certain representativeness, and especially if – as in the present case – only one staff representative body exists in a specific public establishment or institution, the higher authority is bound to grant authorization. However, according to the A-BCL, this authorization was duly refused, without any legal grounds being given for this refusal. Even worse, the Government, by handing down an interpretation that was not in accordance with principles in administrative law and by refusing to exert its power of supervision over the BCL management to ensure that it grant the authorization requested by the BCL since October 2004, implicitly approved this illegal refusal on the part of the BCL management and contravened its commitments undertaken under Conventions Nos 87 and 151. In particular, the Government has given a wrong interpretation of section 36, by stating that the granting of authorization by the higher authority of the BCL is merely an option, left to its own judgement and “discretion” (letter from the Government of 31 October 2005, enclosed with the complaint). According to the complainant organization, the Government is unaware of the meaning and scope of the provisions of section 36. In fact, the rules governing the application of this legal provision are as follows: section 36 of the Act of 1979 must not be applied literally, because an interpretation of this nature would be tantamount to granting a discretionary power to the authority called upon to grant authorization to the applicant occupational organization. However, the aim of Convention No. 87 is to avoid any decision of an arbitrary nature in the recognition of occupational associations called upon to defend the collective interests of their members. The interpretation of section 36 by the Government, as well as its support for the position adopted by the BCL management, are therefore contrary to the objectives of Convention No. 87 and constitute a violation of its principles.
8. 977. In a communication dated 10 August, the complainant organization informs the Committee that it wishes to uphold its complaint because, even though the BCL had granted it authorization to represent the staff, its practical application by the BCL was continuing to cause a problem. According to the A-BCL, the BCL had indeed, under political pressure from the competent minister and as a result of the complaint submitted by the A-BCL to the ILO, granted its authorization for the A-BCL to be the representative of BCL agents, in a decision handed down on 15 June 2006. As far as the A-BCL was concerned, the conditions under which this authorization had been granted and continued to be applied did not satisfy it, neither did they satisfy its umbrella organization, the General Confederation of the Public Service (CGFP). According to the A-BCL, the BCL management’s decision is an attempt to undermine the approval that had been granted under political and trade union pressure, by trying to persuade the legislator to amend the framework agreement setting up the BCL, especially with a view to reducing the powers of this trade union organization.
9. 978. The CGFP also took a position on the BCL management’s decision of 15 June 2006 in a communication sent to the management on 19 July 2006. This communication, enclosed with the complaint, severely criticized, according to the complainant organization, the initiative taken by the BCL management, claiming that it made a mockery of the trade union rights of the A-BCL; it also criticized the practical application of the authorization granted. As long as the bill put forward by the BCL management has not been withdrawn or scrapped, and as long as it has not received guarantees that its trade union activity will not be questioned by the BCL management, the A-BCL is seriously concerned at the free exercise of its trade union activity in the future.
10. 979. In its communication, the A-BCL encloses the letter of 15 June 2006 in which the BCL granted its authorization. In this letter, the BCL states that discussions on this issue had been held with the Government and that on 2 May 2006, the minister entrusted with relations with the BCL had reconfirmed that the management of the bank alone was competent to grant authorization; indeed, it was purely a matter for the bank’s discretion. The BCL management stressed in its communication that it was sorry about the dispute that had arisen around this request as it had always sought to guarantee a social and constructive dialogue within the BCL; its concern was to allow a real representation of all groups of employees within the bank by representatives selected by secret ballot in which all agents of the BCL might participate. This proposal to organize elections was also contained in a bill submitted by the BCL to the Government. Since the BCL management continued to believe that the legal situation for the exercise of staff representation at the BCL was not clear, as the present law stood, it had striven and would continue to strive for an intervention on the part of the legislator to remedy this shortcoming.
11. 980. A letter sent by the CGFP to the BCL on 19 July 2006 is also enclosed with the A-BCL’s communication of 10 August, in which the CGFP reacts to the letter from the BCL. The CGFP alleges that a number of statements made by the BCL are unacceptable because they distort the actual situation. In particular, the BCL management stipulated in its letter of 15 June 2006 that it “confirms its recognition of the A-BCL as staff representative”. According to the CGFP, the A-BCL believed that the BCL does not recognize the A-BCL as representing the BCL staff, as it has done everything to thwart its trade union action by refusing it authorization for nearly two years. Furthermore, the BCL states that its management had, from 1999 onwards, recognized the A-BCL as “its negotiator in social dialogue”. The CGFP wonders how the BCL management intended undertaking social dialogue with a social partner that it had always refused to recognize officially. Furthermore, the BCL management’s interpretation of the provisions of section 36 of the law establishing the legal status of civil servants, does not tally with the principles regulating the application of this text. The CGFP considers it unacceptable that the BCL management is trying, through an amending bill that it has put forward, to limit the A-BCL’s scope of action and interfere unduly in the domain of the Minister of the Public Service representing the Government and its social partner, the CGFP. The Confederation points out that it is firmly opposed to any amendment of the Act of 23 December 1998, that would limit the A-BCL’s scope of action, thereby undermining its trade union rights. Indeed, Conventions Nos 87, 98 and 151 establish freedom of association, collective bargaining and trade union action as fundamental principles. The BCL management’s initiatives clearly set out to restrict the free application of these fundamental freedoms with respect to the A-BCL; they are clearly made with malicious intent because they were undertaken without the knowledge of the staff representatives, i.e. without any previous consultation or dialogue, and therefore flagrantly infringe the legal provisions and regulations on dialogue and social partnership.
12. B. The Government’s reply
13. 981. In a communication dated 19 July 2006, the Government informs the Committee that the BCL management has authorized the A-BCL to represent the staff, in accordance with section 36 of the amended Act of 16 April 1979, establishing the legal status of civil servants. This agreement had been granted after an intervention by the Minister of the Public Service and Administrative Reform and the Minister of the Treasury and Budget. The Government points out that it was therefore not a party to blocking social dialogue and that it had fully respected its obligations under ILO Conventions.
14. 982. In a communication dated 24 November 2006, the Government stated that it was extremely surprised that the A-BCL was continuing with the case. The Luxembourg Minister of Finance (supervising minister) and Minister of Labour consider that it is not up to the Government to take position. The accusations made by the A-BCL in its letter of 10 August 2006 do not concern an infringement of international labour Conventions by the Government and Luxembourg legislator, or of any judicial actions and deeds. They merely allude to intentions (moreover merely guessed at) on the part of the BCL management. The Government considers that both its law and practice are in conformity with the international labour Conventions mentioned.
15. 983. In a communication dated 28 December 2006, the Government points out that the dispute in question is not about a legal text in force or in the process of being adopted, but is exclusively about assertions, based to a large extent on assumptions rather than facts, against a single enterprise and the way it might apply a text, whether already existing or being voted upon. The Government holds the view that the Committee is not competent to take a decision on documents that only incriminate possible future action on the part of the management. As far as the substance of the case is concerned, the Government adds, entirely incidentally, that no reference is made to the fact – neither is it a fortiori proven – that the text in force or being drafted is contrary to international labour standards. Incriminations against the BCL management are virtual; they have no substance and have not been proven.

C. The Committee’s conclusions

1. 984. The Committee notes that the A-BCL, legally set up in July 2004 and representing more than 75 per cent of all the agents of the BCL, alleges that the authorities refused to grant it the necessary authorization to defend the collective interests of its members, despite several requests on this matter since October 2004. The complainant organization also alleges that the BCL is trying, by means of an amending bill, to limit the A-BCL’s scope of action.
2. 985. The Committee notes that the three communications from the Government are short, stipulating that: (1) authorization was granted in 2006; (2) the A-BCL’s allegations are based merely on the supposed intentions of the BCL; and (3) the dispute in question is not about a legal text in force or being adopted, but exclusively about assertions, to a great extent based on assumptions rather than facts, against an isolated enterprise on its possible way of applying a text, whether already existing or in the process of being voted. The Government insists that it has not infringed ILO Conventions.
3. 986. The Committee notes that the A-BCL is a legally established organization with legal personality. It notes that section 36 of the amended Act of 16 April 1979, establishing the legal status of civil servants (Act of 1979), stipulates that “occupational associations within administrations, service industries and state institutions may be authorized, under an Order from the competent minister, to represent the staff on whose behalf they are acting” and that the A-BCL requested this authorization on 4 October 2004. The Committee notes that the A-BCL considers that section 36 does not give the competent minister the right to grant authorization, but that the latter must grant authorization if the association is representative and has been legally established. The Committee notes that the Government gives a different interpretation of this section (letter enclosed with the A-BCL’s complaint), considering that section 36 states that granting an association authorization to represent staff is a purely discretionary matter left up to the BCL management. The Committee notes that the authorization was finally granted to the A-BCL on 15 June 2006.
4. 987. The Committee notes, however, that despite the position expressed by the BCL in its letter to the complainant, stressing that it had recognized the A-BCL as negotiator within the framework of social dialogue since the bank had started operating in 1999, consulting it regularly on all matters within its fields of competence and organizing regular meetings with its administrative council, the complainant organization alleges that it had not been able to work in the interest of its members because it had not been granted authorization. Indeed, according to the complainant organization, one of the members of the A-BCL governing council had been dismissed by the BCL management, while he was vice-president and secretary of the A-BCL, when he should have benefited from the legal ban to take such steps against a delegate of BCL agents. The BCL management justified the legal nature of the measure taken against the A-BCL official by stating that it had not been bound to respect any legal ban because the A-BCL had not been recognized.
5. 988. The Committee considers that if authorization really creates rights for the organization, this authorization should not be granted in a discretionary manner. The Committee recalls that employers, including governmental authorities in the capacity of employers, should recognize for collective bargaining purposes the organization’s representative of the workers employed by them and that recognition by an employer of the main unions represented in the undertaking, or the most representative of those unions, is the very basis for any procedure for collective bargaining on conditions of employment in the undertaking [see Digest of decisions and principles of the Freedom of Association Committee, fifth edition, 2006, paras 952 and 953]. The Committee requests the Government to review section 36 of the Act of 1979 in consultation with the social partners concerned, if it is found that this provision allows for discretionary power in the granting of authorization so as to bring it into conformity with the Convention.
6. 989. The complainant organization expresses its concern over future professional relations in the Bank, on the basis of several assertions made by the BCL management. As stated in a letter from the BCL enclosed with the complaint, the BCL management expresses its regret that the dispute surrounding the request for authorization had arisen. It had always sought to guarantee a social and constructive dialogue within the BCL, and its concern was to allow an effective representation of groups of employees at the bank by representatives elected by secret and direct ballot, in which all BCL agents might participate. The BCL explains that it continues to believe that the judicial situation with respect to staff representation at the BCL is not, as the legislation now stands, clear, and for this reason it had always striven – and will continue to strive – for an intervention on the part of the legislator to remedy this shortcoming.
7. 990. The CGFP considers, in a letter in reply to the BCL enclosed with the complaint, that their initiatives limit the free application of basic freedoms within the A-BCL and is of malicious intent, given that these steps were taken without the knowledge of the staff representatives, i.e. without any previous consultations or dialogue, thereby flagrantly infringing legal provisions and regulations concerning dialogue and social partnership.
8. 991. The Government for its part states that the dispute in question is not about a legislative text in force or in the process of being adopted, but is merely based on assertions, to a great extent based on assumptions rather than facts, against a single enterprise and its possible way of applying the text, whether this actually exists or is being voted.
9. 992. The Committee considers that the information provided does not call for further examination. Nevertheless, the Committee notes the allegations according to which the BCL management would like to organize elections of worker representatives, in which all BCL agents could participate. In this respect, the Committee recalls that the Workers’ Representatives Convention, 1971 (No. 135), and the Collective Bargaining Convention, 1981 (No. 154), also contain explicit provisions guaranteeing that, where there exist in the same undertaking both trade union representatives and elected representatives, appropriate measures are to be taken to ensure that the existence of elected representatives is not used to undermine the position of the trade union concerned and it is essential that the introduction of draft legislation affecting collective bargaining or conditions of employment should be preceded by full and detailed consultations with the appropriate organizations of workers and employers [see Digest, op. cit., paras 946 and 1075].

The Committee's recommendations

1. 993. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • The Committee requests the Government to review section 36 of the Act of 1979 in consultation with the social partners, if it is found that this provision allows for discretionary power in the granting of authorization so as to bring it into conformity with the Convention.