Definitive Report - Report No 348, November 2007

Case No 2530 (Uruguay) - Complaint date: 28-NOV-06 - Closed

Allegations: The complainant objects to a resolution issued by the Ministry of Labour and Social Security which declared road transport activities to be an essential service, and to police intervention to break up meetings held by hauliers

1166. The complaint is contained in a communication from the Uruguayan Hauliers’ Federation (ITPC) of November 2006. The Government sent its observations in a communication dated 9 April 2007.

1. 1167. Uruguay 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. 1168. In its communication of November 2006, the ITPC objects to the resolution issued by the Ministry of Labour and Social Security on 25 October 2006 which declared road transport to be an essential service. The resolution in question stipulates the following:
2. The Ministry of Labour and Social Security declares that:
3. 1. The following road transport activities governed by the Ministry of Transport and Public Works are deemed to be essential services and shall be provided in the manner established in the preambular paragraphs to the present resolution:
4. (a) general distribution of fuel;
5. (b) transport and distribution of foodstuffs and products required for their production;
6. (c) transport and distribution of perishable goods;
7. (d) activities guaranteeing normal operations at commercial ports and airports;
8. (e) transport of medical supplies and waste;
9. (f) any other transport that the Ministry of Labour and Social Security considers to involve the consequences referred to in the sixth preambular paragraph to the present resolution.
10. 2. The aforementioned essential services shall be provided under the monitoring, guidance and responsibility of road transport enterprises.
11. 3. The relevant ministries and bodies shall be charged with ensuring effective compliance with the provisions of this resolution.
12. 4. The present resolution shall come into effect on the date of its adoption and shall be valid for a period of up to thirty (30) days.
13. 5. The present resolution shall be duly announced, published and so forth.
14. The ITPC indicates that the provisions of the resolution are contrary to the Committee on Freedom of Association’s definition of an essential service.
15. 1169. The ITPC points out that article 57 of the Constitution states that strikes are a trade union right. This recognition resulted from the inclusion of the social dimension in the traditional declarations of individual rights, duties and guarantees. This article does not create a right, but recognizes its existence by accompanying it with guarantees against possible legislative restrictions. Furthermore, it is recognized as a fundamental right of the individual. Although it is debatable whether lockouts are protected under article 57 of the Constitution, they are specifically provided for under section 3 of Act No. 13720 which governs the procedure. Lockouts are clearly a means of industrial action available to employers, although they are not widely used because of the high financial costs involved. It cannot be denied that the total or partial closure of an enterprise by the employer as a temporary means of exerting pressure for bargaining purposes is at present lawful according to the Uruguayan legal system.
16. 1170. The ITPC indicates that it is a second-level association to which 19 first-level organizations are affiliated, together representing the entire road transport sector in Uruguay. The ITPC was granted legal personality by the Ministry of Education and Culture on 26 September 2001. In the same year, Act No. 17296 provided for ITPC representation in a state body for monitoring the legality and development of freight transportation. According to legal provisions, this body also has an advisory role vis-à-vis the executive branch. The ITPC is thus clearly the legitimate representative of the sector at all levels. In this context, the ITPC has been requested by the public and private sectors to actively participate in all activities directly or indirectly relating to freight transportation. Specifically, the ITPC is represented on the Higher Tripartite Council, the highest deliberative body on labour issues in Uruguay. Furthermore, at the request of the Ministry of Labour and Social Security, the ITPC was involved in drafting the report on the level of compliance with international labour Conventions in Uruguay, which, through the Department for Foreign Affairs, is currently being presented to the United Nations. It can therefore be stated that this occupational organization is recognized for promoting the professionalization of workers and entrepreneurs in developing the sector and for seeking full compliance with state regulations.
17. 1171. The ITPC indicates that, soon after taking office, the Government raised expectations in all the productive sectors in the country with regard to establishing a price differential for the fuel generally used, namely diesel, which is very expensive in Uruguay, where it costs 86 per cent more than in other countries in the region, such as Argentina. For many months, during long meetings attended by the ITPC, discussions were held on how to implement the price differential, but they did not result in a concrete proposal. The ITPC indicates that, on 28 September 2006, by Decree No. 347/2006, the Government stipulated that the price of diesel would be increased by 1.053 pesos per litre in order to generate a fund to subsidize a price reduction for tickets on public passenger transport services. The ITPC emphasizes that it is not opposed to the measure to reduce ticket prices on public passenger transport, only to an increase in the price of diesel, the Government itself having raised expectations that it would be reduced, on the contrary. The ITPC considers that, while it is necessary to take steps to encourage the development of public services, these must be accompanied by measures that promote and facilitate the development of the country’s productive sectors. In this case, on the contrary, the manner in which the Government implemented a reduction in ticket prices has a direct negative impact on the productive sectors that have to bear the consequences of the increase in the price of diesel.
18. 1172. In addition, the Government has drafted a tax reform bill. Although the bill is currently under discussion in Parliament, its adoption is imminent. Once this law is adopted, all of the previously established exemptions will be abolished and, once it comes into force, only those provided for in the new law will be valid. Consequently, when this law – which does not incorporate the sector’s gains – comes into force in 2007, these gains will be lost irretrievably, without any alternative solution. These gains were gradually achieved over years of negotiations in which the Government understood that meeting the hauliers’ demands would enable them to remain in the market and to be moderately competitive at the regional level, given that business running costs in Uruguay are very high.
19. 1173. The ITPC indicates that, given this situation and upon becoming aware of Decree No. 347/2006, in view of the announced increase in the price of diesel, organizations representing the sector throughout the country assembled and decided to propose alternative measures to the Government with a view to solving the sector’s problems and, if solutions were not reached through negotiations, to make use of employers’ legitimate and legally recognized right to suspend activities. Negotiations with the Government resulted in a proposal that did not reflect the hauliers’ main demands and which, although accepted when put to the hauliers for consideration, were considered a far cry from the industry’s proposals to the Government. Consequently, the hauliers decided in assembly to hold a stoppage beginning on 23 October 2006.
20. 1174. It should be noted that, during the stoppage, and despite the fact that the services provided by the sector are not public services, the ITPC took the necessary measures to guarantee the provision of services which ensure the health, food supply and safety of individuals and other fundamental safeguards so that the action taken would not have any negative impact on the population. On a permanent basis, delegates from various occupational organizations checked that the necessary services were being provided. The ITPC is in a position to prove that the services provided exceeded what are termed essential services. On the second day of the stoppage, the National Administration for Fuel, Alcohol and Portland Cement (ANCAP) sent the ITPC a list of services that had to be provided during the stoppage. The organizations observed that many of the services on the list were already being provided, and, upon receipt of the request, hauliers began to provide the rest of the services requested by the ANCAP.
21. 1175. As an example, the ITPC adds that, when fishing vessels arrived at the port in Montevideo, all the perishable goods on board were unloaded. From the beginning of the stoppage, milk was collected from dairy farms and transported to distribution outlets for consumption, and the public and the Government were informed that this service was being maintained. Similarly, all services relating to hospitals, establishments providing snacks for low-income people, and so on, were also maintained. In order to guarantee the provision of services, each vehicle belonging to enterprises involved in the stoppage was authorized to provide the specific service in question. The Government knew that these services were being maintained. The provision of these services was also announced in the media.
22. 1176. The ITPC alleges that, despite the above, and in clear disregard for employers’ rights, on 25 October 2006 the Government declared freight transportation to be an essential service, in blatant violation of the rights established by law. The aforementioned resolution on essential services reflects the Government’s unjustifably broad determination of essential services, which is clearly at odds with the accepted definition. It should also be noted that the Government which, shortly after taking office repealed Decrees Nos 512/1966 of 19 October 1966 and 286/2000 of 4 October 2000 which provided for police intervention in the event of sit-ins during strikes, ordered police intervention during this stoppage after having issued the decree on essential services of 25 October 2006. The police intervened in some rural departments of the country and broke up peaceful gatherings of hauliers, thus forcing the sector to hold a stoppage so as to avoid unwanted confrontations.
23. 1177. The ITPC indicates that the executive branch did not provide justification for the measures taken. Although the resolution states that stoppage leads to shortages of vital supplies, these must be defined in order to determine whether their provision is actually essential for the life, safety or health of the population. The preambular paragraphs to the resolution make no reference to this, and the items listed in section 1 by no means constitute essential services to safeguard the provision of vital supplies to the population. With regard to the content of the preambular paragraphs to the effect that the magnitude of the action seriously affects public order, the Government also failed to specify the manner in which public order was affected so as to justify the rapid (48 hours after the stoppage began) and inaccurate declaration that the suspended services were essential. In summary, the Government did not provide justification for the resolution and failed to specify clearly the supplies curtailed by the stoppage so as to endanger the life, health or safety of the population.
24. 1178. According to the ITPC, through this resolution on essential services, the Government has violated the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), by restricting freedom in this regard, which, as previously mentioned, is recognized by law. The Committee itself states that a non-essential service can become essential if the duration of the strike is such as to endanger the population. However, the case in question cannot by any means, or from any standpoint, be described as being one of these specific cases in which trade union action could be restricted. The dispute lasted for two days, which is not long enough for a non-essential service to become essential and therefore to be restricted. A minimum transportation service was maintained throughout the bargaining process. The Government is innovating in this field by declaring essential a service that the Committee on Freedom of Association considers to be non-essential. Furthermore, considering the duration of the dispute, the service did not become essential.
25. 1179. Lastly, the ITPC indicates that the situation at issue constitutes an unlawful restriction enforced by the Government on the free exercise of trade union activities, which are protected by Convention No. 87 and Act No. 13720, and is contrary to the decisions of the Committee on Freedom of Association.
26. B. The Government’s reply
27. 1180. In its communication of 9 April 2007, the Government recalls that the complaint refers to the declaration of essential services concerning specific road transport activities (resolution of 25 October 2006 of the Ministry of Labour and Social Security and the Ministry of Transportation and Public Works). In this respect, with regard to the events referred to by the ITPC, the Government emphasizes that the document submitted refers to the expectations raised by the Government in all productive sectors with regard to establishing a price differential for the fuel they commonly use (diesel). Yet Decree No. 347/2006 of 28 September 2006 stipulated that the price of the fuel in question would be increased by 1.053 pesos per litre in order to generate a fund to subsidize a price reduction for tickets on passenger transportation throughout the country. According to the Government, this account fails to mention an element of the utmost importance, namely that the increase in the price of diesel fuel was accompanied by another, previously announced, government measure concerning the promotion of a bill that would substantially amend the tax component of the price of the fuel used in the sector concerned. This tax reform consists of replacing the specific internal tax by a value added tax, thus providing the sector with a tax abatement that is substantially higher than the current level and – in practice – results in the fuel price reduction demanded by the organization concerned.
28. 1181. The Government points out that it is necessary at the outset to establish the legal nature of the industrial action at the heart of the dispute, given that the complaint confuses and refers to different concepts (strikes and lockouts). The case under discussion concerns a lockout, which is generally considered as a lawful means of industrial action by employers. A lockout can take the form of closure of an enterprise. This case does not involve a defensive lockout (targeted at workers), but rather a suspension of the services provided by the employer in protest against government measures. This is therefore an atypical lockout and is not aimed at achieving labour-related objectives (it did not occur in the context of a collective labour dispute).
29. 1182. The Government indicates that, in Uruguay, a lockout cannot be placed on the same footing as the right to strike, and hence the argument put forward in the complaint is flawed. The declaration of the right to strike has constitutional rank (since 1934, current article 57) and a legal basis (Act No. 7514 of 5 October 1922). In Uruguayan law, lockouts have legal rank (Act No. 13720) and, specifically, are not presented as a recognized right, but in the context of a means of preventing collective disputes and respect for the fundamental rights of the community (advance notice and maintenance of minimum emergency services).
30. 1183. The Government states that, in order to delimit the concept of essential services (which is not defined in Act No. 13720), reference should be made to the decisions of the Committee on Freedom of Association as the most accepted doctrine. However, the Government considers that the following three points should be made: (a) this concept is clearly dynamic and ranges from the initial idea of “public hardship” (or calamity) to a more precise definition: services whose interruption could endanger the life, personal safety or health of the whole or part of the population, and also covers the notion of the effect of the duration of a dispute, which initially might not affect essential values, but could have an impact with time. The definition depends on the appreciation of a delicate balance with other fundamental rights. There is no mandatory list. The best example is the latest edition of the Digest of decisions and principles of the Freedom of Association Committee of the Governing Body of the ILO, which contains some differences in respect of previous editions; (b) the concept of essential services should take into consideration the situation in each country. For example, in a country with alternative means of transportation, the issue of road transport should not be addressed in the same manner as in other countries, such as Uruguay, which do not have adequate rail services; and (c) lastly, the Government indicates that reference is being made to the decisions of the Committee on Freedom of Association concerning strikes in essential services and wonders if these decisions also apply to lockouts. The ITPC’s complaint applies them fully. The Government considers this to be incorrect and indicates that, from an international perspective, there is a clear distinction between a strike and a lockout (the Government refers to national and international doctrine in this regard).
31. 1184. With regard to national law, the Government states that strikes and lockouts cannot in any way be considered as having the same legal status. The recognition of the right to strike has constitutional rank, whereas lockouts are referred to in Act No. 13720 of December 1968 in the context of preventing disputes and ensuring essential services (article 65 of the Constitution). In summary, from a labour standpoint, lockouts are not used to oppose government measures. In other words, this case may involve other means of protest (against government measures), but it is not a labour dispute (governed by international labour Conventions and the decisions of the Committee on Freedom of Association). In conclusion, it is not admissible to transfer or apply to this case the same criteria on essential services established by the ILO concerning strikes. In Uruguayan law, the right to strike is legally recognized and given special protection, which cannot be likened to the references in legislation to lockouts. Therefore, a restrictive approach should be taken to limitations on the right to strike (according to article 57 of the Constitution, regulations shall be made governing its exercise and effect). However, this cannot be applied to lockouts, for obvious conceptual reasons and considerations of legal interpretation. The case under examination refers to a lockout and not a strike. Furthermore, the action was not taken during a collective labour dispute (which rules out the application of the criteria established by the Committee on Freedom of Association).
32. 1185. Lastly, the Government indicates that the opposed resolution of 25 October 2006 does not declare all road transport services to be essential, but only those linked to essential services which, in a country without alternative means of transportation, could affect the life or health of the population. The declaration of essential services did not last for more than 24 hours and the industrial action was cancelled by the ITPC itself.

C. The Committee’s conclusions

1. 1186. The Committee observes that, in this case, the ITPC objects to a resolution issued by the Ministry of Labour and Social Security on 25 October 2006 which declared certain road transport activities to be essential services, and indicates that the resolution is not in conformity with the Committee’s definition of an essential service and violates Convention No. 87. The ITPC alleges further that, after the resolution had been issued, the police intervened to break up peaceful demonstrations by hauliers.
2. 1187. The Committee observes that the opposed resolution declared that the following road transport activities governed by the Ministry of Transport and Public Works were essential services: distribution of fuel; transport and distribution of foodstuffs and products required for their production; transport and distribution of perishable goods; activities guaranteeing normal operations at commercial ports and airports; transport of medical supplies and waste; and any other transport that the Ministry of Labour and Social Security considered to involve the consequences referred to in the sixth preambular paragraph to the resolution (a service whose interruption could be seriously detrimental to the public or increase the risk of collective hardship for the whole or part of the population).
3. 1188. The Committee notes that the Government states that: (1) it is necessary at the outset to establish the legal nature of the industrial action at the heart of the dispute, which in this case consisted of suspension of the services provided by the employer in protest against government measures; (2) this is an atypical lockout which did not occur in the context of a collective labour dispute; (3) to delimit the concept of essential services, the resolution refers to the decisions of the Committee as the most accepted doctrine but it should be noted that: (i) the concept is clearly dynamic and its definition depends on the appreciation of a delicate balance with other fundamental rights (there is no mandatory list); (ii) the concept of essential services should take into consideration the situation in each country, given that, in a country with alternative means of transportation, the issue of road transport should not be addressed in the same manner as in other countries, such as Uruguay, which do not have adequate rail services; and (iv) the complaint refers to the Committee’s decisions concerning strikes in essential services, whereas the clear distinction between a strike and a lockout must be taken into account.
4. 1189. The Committee observes that the resolution in question was in force for 30 days and that the seventh preambular paragraph stipulated that: “the operations that must be ensured constitute a minimum service; this is a special and provisional regulation in response to an unusual and temporary situation”.
5. 1190. Although the Committee agrees with the Government that there is a distinction between a strike and a lockout, it observes that this case refers to a “peaceful demonstration” and a “suspension of services”, which do not come within the scope of employer–worker relations, but rather that of a protest and suspension of activities by the employer. Under these circumstances, the Committee concludes that employers, like workers, should be able to have recourse to protest strikes (or action) against a government’s economic and social policies [see Digest of decisions and principles of the Freedom of Association Committee, fifth edition, 2006, para. 529], which should be able to be restricted only in the case of essential services or public services of fundamental importance, in which a minimum service could be established.
6. 1191. Therefore, the Committees has considered that, among other things, transport generally, loading and unloading docks, the production, transport and distribution of fuel, metropolitan transport and the supply and distribution of foodstuffs do not constitute essential services in the strict sense of the term [see Digest, op. cit., para. 587]. The Committee considers, however, that in the event of the suspension of a service which is not essential in the strict sense of the term, in a sector of fundamental importance for a country – as might be the case for passenger and goods transportation – the requirement to maintain a minimum service may be justified. However, the employers’ and workers’ organizations concerned must be able to participate in the process of determining which minimum services should be guaranteed, and in the event of disagreement as to the services to be maintained, the law should provide for such disagreement to be settled by an independent body and not by the administrative authority.
7. 1192. Under these circumstances, and in view of the fact that the resolution establishing the minimum services does not indicate that the parties concerned were involved in their determination, the Committee requests the Government, in future situations in which the suspension of a non-essential service might justify requiring a minimum operational service, to enable the participation of the relevant employers’ and workers’ organizations in the process and not to resort to the unilateral imposition of a minimum service. In the event of disagreement as to the minimum service to be maintained during the suspension of activities, the Committee requests the Government to ensure that any such disagreement is settled by an independent body.
8. 1193. With regard to the alleged police intervention to break up peaceful demonstrations by hauliers, the Committee regrets the fact that the Government has not sent its observations in this respect. The Committee observes that, since the complainant did not provide further details, it will simply remind the Government of the following principle: “The authorities should resort to the use of force only in situations where law and order is seriously threatened. The intervention of the forces of order should be in due proportion to the danger to law and order that the authorities are attempting to control and governments should take measures to ensure that the competent authorities receive adequate instructions so as to eliminate the danger entailed by the use of excessive violence when controlling demonstrations which might result in a disturbance of the peace.” [see Digest, op. cit., para. 140].

The Committee's recommendations

1. 1194. In light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • The Committee requests the Government, in future situations in which the suspension of a non-essential service might justify requiring a minimum operational service, to enable the participation of the relevant employers’ and workers’ organizations in the process and not to resort to the unilateral imposition of a minimum service. In the event of disagreement as to the minimum service to be maintained during the suspension of activities, the Committee requests the Government to ensure that any such disagreement is settled by an independent body.