Report in which the committee requests to be kept informed of development - Report No 363, March 2012

Case No 2751 (Panama) - Complaint date: 24-NOV-09 - Follow-up

Allegations: Recent legal reforms and rulings infringing upon trade unions rights; freezing of recognition of 30 trade union organizations that had requested registration; interference in the functioning of trade union organizations; refusal to allocate education insurance funds to FENASEP and dismissal of a trade union leader; threats by the authorities to institute criminal proceedings against trade union leaders

1. 923. The Committee last examined this case at its March 2011 meeting, when it presented an interim report to the Governing Body [see 359th Report, paras 992–1052, approved by the Governing Body at its 310th Session (March 2011). The National Federation of Public Employees and Public Service Enterprise Workers (FENASEP) sent additional information by communication dated 31 May 2011.
2. 924. The Government sent new observations in a communication dated 31 December 2011 and responded to the FENASEP communication of 31 May 2011 in a communication dated 27 February 2012.
3. 925. Panama 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. 926. At its March 2011 meeting, the Committee made the following recommendations on the matters still pending [see 359th Report, para. 1052]:
   • (a) As to the allegations regarding Act No. 29 of 8 June 2010, establishing a special regime for the area of Barú, which includes a provision allowing enterprises to operate for the first six years without undertaking bargaining processes concerning collective labour agreements (section 7 of the Act), the Committee urges the Government to take the necessary measures to repeal the abovementioned section 7 without delay. Furthermore, noting that the Government has not responded to the allegation made by the complainants with regards to said Act, according to which, the representatives of the workers’ central CONATO and the employers’ central CONEP are not represented on the Administration Committee of the Special Economic Area of Barú, the Committee recalls the importance of consultation with the most representative employers’ and workers’ organizations with regards labour issues, requests the Government to consider, together with those organizations, the possibility of the latter being represented on the Administration Committee, in order that they might be consulted on issues affecting their members, and to keep it informed in this regard.
   • (b) As to the allegations regarding a Manual of Procedures for the Department of Social Organizations (ministerial ruling of 15 December 2009), which according to the complainants restricts the exercise of trade union rights, the Committee notes that the text of the Manual (copy provided by the Government) does not seem to have been subject to consultations with the most representative trade union organizations. Rather, it is claimed that the Manual consists of a series of flexible procedures aimed at speeding up the administrative process and the Government is ready to consider any recommendations that might arise from its application. The Committee finds that certain terms employed in the Manual, such as the “approval” of executive committees, may give rise to problems of interpretation and requests the Government to examine said Manual with the most representative workers’ organizations in order to clear up any misunderstandings and produce a text which enjoys as much support as possible.
   • (c) As to the alleged increase of the minimum number of public servants needed to establish a trade union association in the public sector (50 servants) in the light of Act No. 43, the Committee requests the Government to take measures to amend Act No. 43 in order to reduce the minimum number of public servants necessary to establish a trade union association, given that an excessively high minimum number could restrict trade union rights, in particular in certain public institutions and small municipalities. As to the allegation that, in the light of Act No. 43 of 2009, public servants dismissed unfairly and then reinstated through a ruling do not have the right to receive the lost wages for the period between the moment of separation and that of reinstatement, the Committee notes the Government’s statement that this allegation is groundless and notes that the Government backs up this claim by referring to two Supreme Court rulings obliging the State to pay the wages and other benefits. The Committee notes that the Government only sent one of the rulings, dated 17 February 2006, when, in fact, Act No. 43 was adopted in 2009. The Committee would therefore be grateful if the Government would send other rulings supporting its statement.
   • (d) As to the allegations regarding the public servants’ organization FENASEP i.e. refusal by the authorities to recognize FENASEP in practice, despite the fact that FENASEP representatives have participated in the ILC as delegates on several occasions, exclusion of representatives of this organization from the Technical Committee and the Appeal and Conciliation Committee in the light of Act No. 43 of 30 July 2009, denial of education insurance funds (trade union training) previously enjoyed by FENASEP – (despite the fact that all public servants have 1.25 per cent deducted from their salaries for the education insurance, thus discriminating between trade union associations of public servants and private sector trade unions), the Committee requests the Government to initiate a constructive dialogue with FENASEP in order to find a solution to the problems which will avoid any risk of discrimination against the organization while allowing it to be recognized for all purposes in connection with its representativeness.
   • (e) As to the allegation that the Ministry of Labour has frozen 30 requests for trade union registration over the past ten months, the Committee requests the Government to indicate those trade unions which have not been registered despite the fact that they have submitted applications for registration and to communicate the reasoned administrative rulings behind the non-registration of trade union organizations.
   • (f) As to the dismissal of Mr Víctor C. Castillo Díaz (according to the allegations, the General Secretary of the Association of Employees of ASEMITRABS) in violation of Act No. 43 on the protection of trade union leaders (trade union immunity), the Committee request the Government to communicate the result of the appeal lodged against the dismissal of Mr Víctor C. Castillo Díaz and, given that the Government disputes his appointment as Secretary General and even the existence of his association of public employees (despite the fact that the complainant organizations have sent a public instrument drawn up by a solicitor which vouches for ASEMITRABS’ establishment and executive committee), to indicate whether said association has applied for registration and legal personality and, should that be the case, to indicate the reasons why that application was unsuccessful.
   • (g) The Committee requests the Government to send it copies of any rulings or charges brought by the Public Ministry against trade union leaders for illicit diversion of public education insurance funds earmarked for trade union training.
   • (h) Finally, the Committee notes that the Government has been examining the possibility of establishing a higher labour council as a consultative body in order to promote social dialogue concerning labour issues with the technical support of the ILO, and that it has formally requested ILO technical assistance in harmonizing national legislation and practice with the provisions of Conventions Nos 87 and 98 (the Government highlights that request in the part of this document regarding the allegations affecting FENASEP). The Committee expresses the firm hope that said technical assistance will be established in the very near future.

B. The Government’s reply

1. 927. In its communication dated 31 December 2011, the Government refers to the Committee’s recommendation (a) contained in its 359th Report and states that Act No. 30 of 5 April 2011 repealed Act No. 29 of 8 June 2010 (including section 7, which allowed enterprises in the area of Barú to operate for the first six years without undertaking collective bargaining in order to align its legislation with ILO Convention Nos 87 and 98. The repeal is the result of the agreements of the special tripartite committee for the forum for dialogue set up by the Government.
2. 928. As regards the Committee’s recommendation (b), the Government states that in 2012, the Ministry of Labour and Social Development will carry out a comprehensive review of the Manual of Procedures for trade union organizations, which will provide an opportunity for intervention and making suggestions to confederations, trade union centres, federations and other organizations; that will encourage them to participate in the process and will better assist them in their various trade union procedures.
3. 929. As regards the Committee’s recommendation (c), in which it finds the minimum number of 50 public servants needed to establish a trade union association in the public sector (pursuant to Act No. 43 of 2009) to be excessive, the Government states that the objective of the reform committee for the Act governing administrative careers is to amend the relevant section to provide as follows: “there may be more than one trade union association within a public institution”. This amendment will then be submitted to the executive body to be studied and given due consideration. The Government adds that the objective of the reform committee for the Act governing administrative careers is also to amend section 179 of Act No. 43 of 31 July 2009 to enable all public servants, including non career public servants, as well as those freely appointed pursuant to the Constitution, those appointed following a selection process and those already serving to freely establish a trade union organization or association. These amendments will be submitted to the executive body for due study and consideration.
4. 930. As regards the second part of the Committee’s recommendation (c) concerning the allegation according to which, by virtue of Act No. 43 of 2009, public servants dismissed and then reinstated through a ruling did not have the right to receive lost wages, the Government states that if a worker employed by a State institution is dismissed and reinstated, he or she immediately receives the salary and is paid any lost wages in keeping with the budget of each public institution. Should this prove to be insufficient, budgetary funds may be raised to pay the corresponding amount.
5. 931. As regards recommendation (d) concerning the non-recognition of the public servant organization FENASEP, the Government states that the Federation is not currently registered as such according to the records of legal personality of the Department of Social Organizations, the General Labour Department of the Ministry of Labour and Labour Development (MITRADEL). FENASEP was established and granted legal personality by the Ministry of the Interior in 1984 but was subsequently regulated by Act No. 9 of 1994, which governs public servants in the administrative careers system. Section 2 of the Labour Code provides as follows:
   • Section 2. The provisions of this Code are of a public nature and are binding on all persons, whether individuals or juridical persons, corporations, farms and establishments that are located or established within the national territory. Public employees shall be governed by the norms of the administrative careers system, except in cases where it is expressly determined that the precepts of this Code shall apply thereto.
6. 932. Similarly, on 27 April 1998 the High Court of Justice ruled on a previous case involving the same parties, underlining, among other things, the following:
   • Consequently, this High Court considers that the labour provisions contained in the Labour Code do not apply to the National Finance Corporation, given that is it a State body legally established by law and is therefore excluded from labour legislation in accordance with section 2 of the Labour Code and section 10 of Act No. 65 of 1 December 1975 [...]
7. 933. The Government adds that the Third Administrative Division of the Supreme Court of Justice endorsed the aforementioned ruling by a judicial decision taken on 29 May 1998. Therefore, in view of this ruling, the MITRADEL is not acting arbitrarily by refusing to grant legal personality to a public sector federation, given that to do so would constitute an illegal act that could entail legal consequences for the administration when the highest judicial authority has already taken a decision on the matter. This is the reason why FENASEP is not recognized and not because of an arbitrary decision on the part of the Government or the Minister for Labour as alleged by the complainants. The Government must abide by the principle of legality and the decision of the Supreme Court of Justice.
8. 934. As regards the refusal to allocate education insurance funds to FENASEP for training, the Government states that it is waiting for the Third Administrative Division of the Supreme Court of Justice to provide clarification on the matter.
9. 935. The Government adds that it is examining the possibility of setting up a bipartite forum for dialogue between the Ministry of Labour and FENASEP representatives in order to address and resolve issues relating to the public sector.
10. 936. As regards the Committee’s recommendation (e) concerning the alleged freezing of 30 requests for trade union registration, the Government states that this allegation is entirely false, given that the denial of legal personality to trade unions in the process of being established stemmed from their failure to meet the relevant legal requirements, which was communicated via reasoned administrative decisions. Therefore, in this case, it was not a question of a failure to reply, especially when the law establishes a period of 30 working days in which to do so. The Government does not keep a full list of the trade unions to which legal personality has been denied but highlights six cases in which it observed irregularities: the Agricultural Workers Union of Tortí, the Union of Gaming Properties of Panama Inc., the Workers Union of Panama Gaming Services of Panamá S.A. and/or Cirsa Panamá S.A., the Union of Workers, Stevedores, Controllers and Operators of the Ports of Balboa and Cristóbal, the Workers Union of the Committee for Health and the Industrial Workers Union for Water Transport in Panama.
11. 937. As regards recommendation (f) concerning the dismissal of Mr Víctor C. Castillo Díaz, as alleged by the General Secretary of the Association of Employees of the Ministry of Labour and Social Welfare (ASEMITRABS), the Government states that it is awaiting the decision of the Supreme Court of Justice on the appeal lodged by Mr Castillo Díaz who, according to the Government, appointed himself as the General Secretary of ASEMITRABS knowing full well that this association was not functioning and that the majority of public servants were unaware of its existence, as it had not been operational since the end of 1989. The association has not been operational in practice since then and, at the time of the 1999 elections, a number of public servants close to the Government of the time decided to revive the association in order to seek refuge in the immunity enjoyed by trade union officials. Having failed to achieve the ends that had justified its revival, the aforementioned association once again ceased functioning and remained non-operational until the end of the 2009 elections when, once again, public servants close to the Government attempted to revive the association so as to avail themselves of trade union immunity. The Government reiterates that the association in question was never actually operational in practice, nor is it recognized at the institutional level or by the very public servants of the Ministry (including those who have served for more than 20 years) but has been used strategically during the periods of transition from one Government to another by a number of public servants for purely personal gain, namely to seek refuge in the immunity acquired on becoming a member of such an association. As things stand, in legal terms, this association still exists but is not operational in practice or recognized by the public servants of the institution.
12. 938. As regards the Committee’s recommendation (g) requesting copies of any rulings or charges brought by the Public Prosecution Service against trade union leaders for illicit diversion of public education insurance funds earmarked for trade union training, the Government recalls that it lodged a complaint with the Attorney-General’s Office against the trade union leaders for mismanagement of funds and the possible misuse of trade union training funds allocated by the Panamanian Institute for Labour Studies (IPEL) to various trade union confederations and federations. The Government adds that Prosecutorial Order No. 554 of 30 September 2010 requested the judge to call a provisional, impersonal and objective stay of proceedings on behalf of the Public Prosecution Service. Subsequently, the tenth Criminal Circuit Court of Panama granted the request for a provisional stay of proceedings made by the First Anti-corruption Prosecutor’s Office. This was then followed by the Ministry of Labour lodging a complaint on 21 March 2011 requesting the resumption of proceedings, which was granted by means of Decision No. 84-11 of 18 April 2011. The legal proceedings are currently under way.
13. 939. As regards the Committee’s recommendation (h), the Government states that it is examining the possibility of establishing a tripartite higher labour council but that a decision has yet to be taken since a consensus on the subject has not yet been reached. Nevertheless, the Ministry of Labour and Social Development will conclude a collaborative agreement with the Labour Foundation led by employers’ and workers’ organizations), which will allow the institution to become a tripartite body and an institutional forum for permanent social dialogue concerning labour issues aimed at seeking out mutually agreed ways to allay the concerns of social actors and to address major social challenges, including the handling of trade union complaints and labour disputes, in addition to mutually-agreed ways of harmonizing national legislation and practices with the relevant ILO Conventions.

C. The Committee’s conclusions

1. 940. Recommendation (a) of the Committee’s 359th Report. The Committee notes with satisfaction that, in its reply, the Government states that Act No. 30 of 5 April 2011 repealed Act No. 29 of 8 June 2010, including section 7, which allowed enterprises in the area of Barú to operate for the first six years without undertaking collective bargaining. The Committee notes that this repeal, which follows up the Committee’s recommendation, was the result of a tripartite agreement. The Committee understands that, since the Act in question has been repealed, the pending matter of the non-representation of trade union and employer representatives on the Administration Committee of the Special Economic Area of Barú instituted under the henceforth repealed Act has been resolved.
2. 941. As regards recommendation (b), the Committee notes with interest the Government’s decision to carry out a comprehensive review of the Manual of Procedures for trade union organizations in 2012, thereby involving trade union organizations across the country. The Committee draws the attention of the Committee of Experts on the Application of Conventions and Recommendations to this aspect of the case.
3. 942. As regards recommendation (c), in which it found the minimum number of 50 public servants needed to establish a trade union association in the public sector to be excessive, the Committee welcomes the Government’s statement to the effect that the objective of the reform committee for the Act governing administrative careers is to amend the current legal norm to provide as follows: “there may be more than one association within a public institution”. The Committee takes note of the will shown by the Government to align its legislation with Convention Nos 87 and 98 and, just as it did in its previous examination of the case, firmly expects that the future reform will reduce the excessive minimum number of public servants needed to establish a trade union association. Lastly, the Committee notes that this matter is subject to follow-up by the Committee of Experts on the Application of Conventions and Recommendations.
4. 943. As regards the second part of recommendation (c) concerning a request for information, the Committee takes note of the Government’s statement reiterating that workers dismissed and then reinstated do have the right to receive lost wages. Bearing in mind that the trade union organizations do not subscribe to the Government’s explanation or, at the very least, have expressed reservations, the Committee once again requests the Government to send a copy of recent rulings supporting its statement.
5. 944. As regards recommendation (d) requesting the recognition of the organization FENASEP, the Committee notes that in accordance with the aforementioned legislation and jurisprudence, it would be illegal to grant legal personality to a public sector federation. The Committee wishes to underline that this situation is incompatible with the right of workers to freely establish worker organizations of their own choosing (Article 2 of Convention No. 87), including the right to establish federations and confederations (Articles 5 and 6 of Convention No. 87). The Committee welcomes the fact that the Government is examining the possibility of setting up a forum for dialogue with FENASEP to address and resolve issues relating to the public sector. While it takes note of the Government’s statement that FENASEP is not registered according to the records of legal personality of the Ministry of Labour (it was established and granted legal personality by the Ministry of the Interior in 1984), the Committee recalls that FENASEP has participated in various ILO Conferences and reiterates once again the importance of recognizing FENASEP for all purposes (this includes it being represented on the Technical Committee and the Appeal and Conciliation Committee in the light of Act No. 43 of 2009) in connection with its representativeness and requests the Government to keep it informed of developments and to take the necessary measures to ensure that its legislation recognizes the right to establish federations and confederations in the public sector. Furthermore, the Committee notes that, as regards the refusal to allocate education insurance funds to FENASEP for training, the Government is waiting for the Third Administrative Division of the Supreme Court of Justice to provide clarification on the matter. The Committee requests the Government to keep it informed in this respect.
6. 945. As regards recommendation (e) concerning the alleged freezing of 30 requests for trade union registration, the Committee takes note of the Government’s explanation that it is not a question of “freezing” or of a failure to reply, given that the law establishes a period of 30 working days for the Ministry of Labour to do so, but of a refusal to grant legal personality owing to the relevant legal requirements not being met. The Government refers to six cases as examples in which irregularities were observed. Bearing in mind that, according to the allegations, the number of denied requests for legal personality stands at 30 organizations, the Committee requests the Government to examine the grounds for denial with the complainants so as to evaluate how the system functions in practice and the best way to resolve the issue of securing legal personality for the 30 trade union organizations in question. The Committee requests the Government to keep it informed of developments. [These matters are also examined in Case No. 2868 concerning six alleged cases of denied registration.]
7. 946. As regards recommendation (f), the Committee notes that the Government is awaiting the decision of the Supreme Court of Justice concerning the dismissal of the leader of ASEMITRABS, Mr Víctor C. Castillo Díaz. The Government disputes his appointment as leader of the association and underlines the fact that the association in question has not been operational for years. The Committee requests the Government to keep it informed of developments in this respect.
8. 947. As regards recommendation (g), the Committee takes note of the information provided by the Government, and in particular the fact that the legal proceedings instituted by the Ministry of Labour against trade union leaders for mismanagement of funds (illicit diversion of public education insurance funds earmarked for trade union training) are ongoing. The Committee requests the Government to inform it of the judicial decision taken in this respect.
9. 948. As regards recommendation (h), the Committee notes with interest the Government’s statements to the effect that a collaborative agreement is to be concluded with the Labour Foundation, which is led by employers’ and workers’ organizations, which will allow the institution to become a tripartite body and an institutional forum for permanent social dialogue to address all social challenges, including the handling of trade union complaints and labour disputes.
10. 949. Finally, the Committee notes the Government’s observations dated 27 February 2012 sent in response to the information transmitted by FENASEP on 31 May 2011 concerning dismissals of trade union leaders and other matters, which will be examined at the next examination of the case.

The Committee’s recommendations

1. 950. In the light of its foregoing conclusions, the Committee welcomes the progress reported by the Government, particularly on the legislative matters, and invites the Governing Body to approve the following recommendations:
   • (a) The Committee firmly expects that the future reform of the Act governing administrative careers will reduce the minimum number of public servants needed to establish a trade union association.
   • (b) The Committee reiterates once again the importance of recognizing FENASEP for all purposes (this includes it being represented on the Technical Committee and the Appeal and Conciliation Committee in the light of Act No. 43 of 2009) in connection with its representativeness and requests the Government to keep it informed of developments and to take the necessary measures to ensure that its legislation recognizes the right to establish federations and confederations in the public sector. Furthermore, the Committee notes that, as regards the refusal to allocate education insurance funds to FENASEP for training, the Government is waiting for the Third Administrative Division of the Supreme Court of Justice to provide clarification on the matter. The Committee requests the Government to keep informed in this respect.
   • (c) As regards the alleged freezing of 30 requests for trade union registration, bearing in mind the number of denied requests for legal personality, the Committee requests the Government to examine the grounds for denial with the organizations so that the functioning of the system in practice can be evaluated, including the means of resolving the issue of securing legal personality for the 30 trade union organizations in question. The Committee requests the Government to keep it informed in this respect.
   • (d) The Committee notes that the Government is awaiting the decision of the Supreme Court of Justice concerning the dismissal of the leader of ASEMITRABS, Mr Víctor C. Castillo Díaz (the Government disputes his appointment as leader of the association and underlines the fact that the association in question has not been operational for years). The Committee requests the Government to keep it informed in this respect.
   • (e) The Committee takes note of the information provided by the Government, and in particular the fact that the legal proceedings instituted by the Ministry of Labour against trade union leaders for mismanagement of funds (illicit diversion of public education insurance funds earmarked for trade union training) are ongoing. The Committee requests the Government to inform it of the judicial decision taken in this regard.
   • (f) Finally, the Committee notes the Government’s observations dated 27 February 2012 sent in response to the information transmitted by FENASEPT on 31 May 2011 concerning dismissals of trade union leaders and other matters, which will be examined at the next examination of the case.