Report in which the committee requests to be kept informed of development - Report No 364, June 2012

Case No 2887 (Mauritius) - Complaint date: 15-JUL-11 - Closed

Allegations: The complainant organization alleges that the reference of 21 issues which could not be resolved during the collective bargaining process to the National Relations Board by the Minister of Labour, Industrial Relations and Employment for a partial review constitutes a clear violation of Article 4 of Convention No. 98

1. 676. The complaint is contained in communications from the Mauritius Employers’ Federation (MEF) dated 15 July and 1 September 2011. In a communication dated 26 July 2011, the International Organisation of Employers (IOE) associated itself with the complaint.
2. 677. The Government sent its observations in a communication dated 10 February 2012.
3. 678. Mauritius 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), and the Collective Bargaining Convention, 1981 (No. 154).

A. The complainant’s allegations

1. 679. In its communications dated 15 July and 1 September 2011, the complainant indicates that the MEF is the national employer’s organization of Mauritius representing all sectors of the Mauritian economy. The Mauritius Sugar Producers’ Association (MSPA) is a key constituent of the MEF and one of the main trade unions representing the interests of employers within the sugar industry. The complainant further indicates that the complaint is lodged on behalf of the MSPA.
2. 680. The MSPA on behalf of its members, i.e. sugar estates, had started negotiations with the trade unions representing agricultural and non-agricultural workers (the Sugar Industry Labourers’ Union, Union of Artisans of the Sugar Industry, Artisans’ and General Workers’ Union and the Organization of Artisans’ Unity, hereafter the “trade unions”) with a view to establishing a new collective agreement. However, in view of the fact that both parties could not agree on the quantum of wage compensation to be granted to the workers, four workers’ organizations in the sugar industry reported in March 2010, a labour dispute against the MSPA to the Commission for Conciliation and Mediation (CCM), a dispute resolution institution. As provided in the legislation, the CCM offered its services for conciliation and mediation but was unable to bring the parties to agree on a new package for terms and conditions of employment, and in particular in respect of the quantum on wage compensation. In fact, in its report, the CCM recommended the two parties to refer the case for joint voluntary arbitration to the Employment Relations Tribunal (ERT) or to an independent arbitrator as provided in the Employment Relations Act 2008. The trade unions refused to jointly refer the case for voluntary arbitration and threatened to organize a general strike in the industry. In view of the situation prevailing in the sugar sector, the Ministry of Labour, Industrial Relations and Employment then invited the MSPA and the trade unions to pursue negotiations under its aegis following which an agreement was reached. A valid collective agreement was thus signed on 23 June 2010 for a duration of four years.
3. 681. The agreement to negotiate (attached to the complaint) signed on 15 June 2010 with respect to a 20 per cent salary increase, contains the following clause: “Notwithstanding this present agreement, the parties hereby also agree that they will include the issues raised before the CCM as contained in the report in a new collective agreement. Negotiations will start as from 16 June 2010 under the aegis of the Ministry of Labour, Industrial Relations and Employment.” According to the complainant, this clause clearly spells out that the issues raised before the CCM were to be discussed during new negotiations carried out under the aegis of the Ministry of Labour, Industrial Relations and Employment. Following this new round of negotiations, a collective agreement was signed on 23 June 2010 which includes the following in the preamble: “Further to (i) the agreement reached between the parties on 15 June 2010 on the salary increase of 20 per cent in presence of the Minister of Labour, Industrial Relations and Employment; and (ii) discussion held under the aegis of the Minister of Labour, Industrial Relations and Employment to negotiate on issues raised before the Commission for Conciliation and Mediation, the following have been agreed by the parties.” According to the complainant, the above shows that, following the negotiations, a collective agreement was signed by the parties after issues raised before the CCM were considered. In the process of these negotiations, issues upon which agreement was reached were retained and consigned in a collective agreement, while others on which no agreement was possible, were jointly set aside. Furthermore, all collective agreements signed by the parties contain the following clause: “3. Application of the Agreement. 3.1 Existing Terms and Conditions of Employment (i) prescribed by the Sugar Industry (Non-Agricultural) Workers (Remuneration Orders) Regulations 1985; (ii) agreed upon by the parties as per the Protocole d’Accord signed on 1 June 1994; and (iii) stipulated in the different awards, interpretation or variation orders of the Permanent Arbitration Tribunal (PAT); which are not covered by the present agreement, shall continue to be binding on the parties.” According to the complainant, the foregoing clause sheds light on the true intentions of the parties when the collective agreements were signed on the application of the said agreements. In fact, a proper construction of the clause shows that the intention of the parties, by signing the collective agreement, was to bring finality to the ongoing negotiations and that certain existing terms and conditions found in three distinct set of sources, as mentioned above, would continue to be binding on the parties together with those specified in the collective agreement.
4. 682. In August 2010, the National Remuneration Board (NRB) which is the wage-fixing machinery established to meet the Government’s obligation under Conventions Nos 26 and 99, issued a notice informing that the Minister of Labour, Industrial Relations and Employment had referred the relevant Remuneration Orders applicable to workers of the sugar industry to be reviewed partially, and invited interested parties to submit representation on the 21 issues which could not be resolved during the collective bargaining process.
5. 683. According to the complainant, the reference to the NRB for a partial review constitutes a serious departure from the principle of promotion of sound and harmonious industrial relations and a clear violation of Article 4 of Convention No. 98. Such a reference is also incompatible with the spirit of collective bargaining as embodied in the national legislation. Furthermore, this act constitutes a wrong signal to employers to engage in collective bargaining, if following the conclusion of valid collective agreements, the minimum wage fixing machinery is used unilaterally to review terms and conditions of employment in organized sectors. The recommendations which the NRB has been requested to submit do not only concern minimum wage rate but also affect terms and conditions of employment. According to the complainant, there is no doubt that the scope of the partial review of the sugar industry as requested by the Minister of Labour, Industrial Relations and Employment will vary the duly signed collective agreement in such a manner and as a result of the occurrence of such circumstances which were not provided in the collective agreement. According to the complainant, the administrative decision to refer unavowed issues to the NRB requesting it to make recommendations has put into peril the newly signed collective agreement and goes against the principle of collective bargaining. The complainant contends that the NRB cannot rely on the referral made by the Minister to make recommendations on terms and conditions of employment that would modify the collective agreement signed between the MSPA and the trade unions.

B. The Government’s reply

1. 684. In its communication dated 10 February 2012, the Government indicates that the dispute did not concern all the workers in the sugar industry. It in fact related to the workers employed by the MSPA members only and did not concern the workers employed by members of the Cane Growers Association and small planters.
2. 685. The Government adds that there is nothing in the collective agreement which provides either that the issues on which no agreement was reached were to be set aside, or that the signing of the agreement was to bring finality to the negotiations. In addition, the decision to refer the issues on which no agreement could be reached to the NRB, has not put into peril the newly signed collective agreement as the parties are still adhering to the provisions of the agreement. The reference to the NRB of the issues on which no agreement could be reached, in no way undermines collective bargaining, and did not constitute a serious and unreasonable departure from the principle of sound and harmonious industrial relations. The reference to the NRB for regulation or improvement of wages and conditions of employment under Sub-part C of Part VIII of the Employment Relations Act 2008 in a particular sector of employment does not necessarily mean that all the demands of the workers will be acceded to. Section 93 of the Act provides that where the Minister receives a recommendation from the NRB, he may either make regulations for implementing the recommendation or reject the recommendation and make no regulations or make such regulations as he thinks fit. According to the Government, it is premature for the MSPA to pre-empt, at this stage, what would be the recommendation of the NRB, and even if the recommendation is in favour of the workers, whether the Minister will implement the recommendation. The NRB has not yet submitted its recommendation to the Minister.
3. 686. The Government adds that the MSPA sought leave from the Supreme Court for an application for judicial review to quash, reverse and set aside the decision of the Minister to refer the 21 issues in dispute to the NRB, and it has still not been determined by the Supreme Court.
4. 687. The Government further indicates that the trade unions concerned have submitted their views concerning the complaint in a joint communication dated 7 December 2011 (attached to the Government’s reply). The trade unions are strongly opposed to the views expressed by the complainant and are of the view that the facts have been misrepresented. In essence, they consider that the referral of the issues on which no agreement could be reached to the NRB by the Minister of Labour, Industrial Relations and Employment is reasonable, just and fair inasmuch as:
   • (i) the issues do not, in any circumstances, alter or modify the issues agreed upon and signed within the existing collective agreement; the 21 issues referred for review to the NRB are precisely those issues not found within the scope of the collective agreements;
   • (ii) issues not covered in a collective agreement can be varied, changed or altered by the proper mechanism provided by the Employment Relations Act 2008 – the Act only precludes the reporting of a labour dispute between the same parties within a period of six months, or precludes the reporting of a labour dispute on the same issues within a period of 24 months;
   • (iii) the referral was the result of a package negotiated to bring industrial peace, economic justice and to end the recourse of legal strike action by the unions; and
   • (iv) the referral was to the informed knowledge of the MSPA. The CCM made recommendation to that effect and the decision of the Minister was widely circulated in the media. Yet at no time during negotiations with the Minister, did the MSPA raise any formal objection to this referral. This is further entrenched by the fact that the sugar companies, members of the MSPA, have duly participated in the submission of memoranda and hearing before the NRB after the matter was referred by the Minister.
5. 688. The trade unions add that the legal framework regulating all wages and all the terms and conditions of service of all employees of the sugar industry, which comprises presently some 13,000 labourers and artisans, are not regulated through a single set of collective agreements. They are regulated by 14 different pieces of legislation or legal instruments. The latest set of collective agreements are roughly regulating only 23 per cent of the issues covered by the 14 legal instruments regulating the minimal terms and conditions of service of some 5,500 labourers and artisans employed by the MSPA members.
6. 689. According to the trade unions, the position taken by the complainant is tantamount to arguing that the 14 legal instruments, outside the scope of the latest collective agreements, are not subject to modification during the duration of the collective agreements and any modification of any of the regulative instruments would “put into peril”, “modify” or “vary” the existing collective agreement. However, a collective agreement does not, and cannot, preclude the future amendments of the statutory minimal conditions defined by any laws, whether related to terms and conditions of service of workers or laws related to wealth distribution benefitting the shareholders of companies. The trade union indicates that the paragraph quoted by the complainant was only inserted by the trade unions as a precautionary and clarity clause, to ensure that all other conditions of service found in other legal instruments would continue to be in force. In any case, it has no legal relevance, as laws are meant to be enforced. According to the trade unions, it is an abuse of interpretation and extrapolation to say that the “true intention” of the unions was to mean that minimal conditions foreseen by laws could not be changed during the duration of the collective agreement. The signature of any collective agreement does not preclude the possibility of new labour disputes to arise, and potentially leading to the signature of new collective agreements during the duration of an existing one. The law only precludes the reporting of a labour dispute between the same parties on the same issues for a duration of two years. At any time labour disputes can arise on any other issues. Thus, issues not covered in a collective agreement can be varied, changed or altered, by the proper mechanism provided for in the law. The signature of a collective agreement on some issues can never preclude changes on other issues. The signing of a collective agreement, as being argued by the complainant, does not bring “finality” as regards the potential modification of other existing terms and conditions, found in other legal instruments outside the collective agreement itself.
7. 690. The trade unions further indicate that the referral by the Minister was the result of a package negotiated by the State, under the supervision of the Prime Minister, to bring industrial peace, economic justice and end the recourse of legal strike action by the unions. This intervention of the Prime Minister was made on the eve of the day of legal strike ballots scheduled by the trade unions. The Prime Minister had two options: either, to eventually ask for an order from the Supreme Court to stop the continuation of the legal strike or to use his good office to try to find a reasonable settlement to a major industrial conflict and obtain industrial peace. The Prime Minister opted for the second option. The basis of the package for the settlement itself was not an imposed one, nor did it come out of the blue. It was certainly not a plot. It was all public, in the media and done to the informed knowledge of the MSPA. The package was based on recommendations made by the conciliatory mechanism, the CCM, during its proceedings. The package was a twofold commitment: (i) the MSPA and the trade unions will sign a collective agreement on issues agreed upon and recommended by the CCM; (ii) the State will refer the 21 issues not agreed upon at the level of the CCM to the NRB to make appropriate recommendations. Therefore, the trade unions never “jointly set aside other issues on which no agreement was possible”, as indicated by the complainant. The trade unions add that, at no time, during the negotiations at the office of the Ministry of Labour, did the MSPA raise a formal objection to this referral, in the presence of the trade unions. Should it have been the case, the trade unions would have never signed any of the collective agreements.
8. 691. The trade unions add that after analysing all the objective facts and proposals made by a conciliatory body, the State was of the view that in addition to the limited collective agreements, an independent tripartite board (the NRB) should look into the 21 issues concerning terms and conditions of service of workers and make proper recommendations. The trade unions indicate that the labourers’ and artisans’ Remuneration Orders (to which reference for changes was decided by the Minister) have not been fully reviewed since more than a quarter of a century and since then, there have been major transformations and mutations in the sector. According to the trade unions, the referral to the NRB is not a departure by the Minister from what is prescribed in Section 91 of the Employment Relations Act 2008, nor is it a departure from the process of collective bargaining as provided for in Article 4 of Convention No. 98.
9. 692. Finally, the trade unions indicate that the negotiations itself were characterized by the disrespect of collective bargaining by the MSPA. According to the trade unions, the MSPA refused to undertake collective bargaining for more than a year – it imposed illegal pre conditions during the collective bargaining process, it refused access to information during the collective bargaining, it tried to undermine collective bargaining at industry level; and it used lies to undermine the principle of collective bargaining.

C. The Committee’s conclusions

1. 693. The Committee recalls that this case concerns allegations that the reference of 21 issues which could not be resolved during the collective bargaining process to the NRB by the Minister of Labour, Industrial Relations and Employment for a partial review, constitutes a serious departure from the principle of promotion of sound and harmonious industrial relations and a clear violation of Article 4 of Convention No. 98.
2. 694. The Committee notes that according to the complainant, such a reference is also incompatible with the spirit of collective bargaining as embodied in the national legislation and that this Act constitutes a wrong signal to employers to engage in collective bargaining, if following the conclusion of valid collective agreements, the minimum wage fixing machinery is used unilaterally to review terms and conditions of employment in organized sectors. According to the complainant, the recommendations which the NRB has been requested to submit do not only concern minimum wage rate but also affect terms and conditions of employment. According to the complainant, there is no doubt that the scope of the partial review of the sugar industry, as requested by the Minister of Labour, Industrial Relations and Employment, will vary the duly signed collective agreement in such a manner and as a result of the occurrence of such circumstances which were not provided in the collective agreement. According to the complainant, the administrative decision to refer unavowed issues to the NRB requesting it to make recommendations has put into peril the newly signed collective agreements and goes against the principle of collective bargaining. The complainant contends that the NRB cannot rely on the referral made by the Minister to make recommendations on terms and conditions of employment that would modify the collective agreement signed between the MSPA and the trade unions.
3. 695. The Committee however notes that the Government and the trade unions are strongly opposed to the views expressed by the complainant and are of the view that the facts have been misrepresented. The Committee notes that both of them states that:
   • (i) there is nothing in the collective agreement which provides either, that the issues on which no agreement was reached were to be set aside, or that the signing of the agreement was to bring finality to the negotiations;
   • (ii) the decision to refer the issues on which no agreement could be reached to the NRB has not put into peril the newly signed collective agreement as the parties are still adhering to the provisions of the agreement;
   • (iii) the issues do not, in any circumstances, alter of modify the issues agreed upon and signed within the existing collective agreement; the 21 issues referred for review to the NRB are precisely those issues not found within the scope of the collective agreements;
   • (iv) the reference to the NRB of the issues on which no agreement could be reached in no way undermines collective bargaining and did not constitute a serious and unreasonable departure from the principle of sound and harmonious industrial relations; and
   • (v) the reference to the NRB for regulation or improvement of wages and conditions of employment under Sub-part C of Part VIII of the Employment Relations Act 2008, in a particular sector of employment (section 91 of the Act), does not necessarily mean that all the demands of the workers will be acceded to. Section 93 of the Act provides that where the Minister receives a recommendation from the NRB, he may either make regulations for implementing the recommendation or reject the recommendation and make no regulations or make such regulations as he thinks fit. It is premature for the MSPA to pre-empt, at this stage, the recommendation of the NRB and even if the recommendation is in favour of the workers, whether the Minister will implement the recommendation. The NRB has not yet submitted its recommendation to the Minister.
4. 696. In addition, the Committee notes that the trade unions further indicate that:
   • (i) the referral was the result of a package negotiated to bring industrial peace, economic justice and to end the recourse of legal strike action by the unions; the package was based on recommendations made by the conciliatory mechanism, the CCM, during its proceedings and was a twofold commitment: (a) the MSPA and the trade unions would sign a collective agreement on issues agreed upon and recommended by the CCM; (b) the State would refer the 21 issues not agreed upon at the level of the CCM to the NRB to make appropriate recommendations;
   • (ii) the referral was to the informed knowledge of the MSPA. The CCM made a recommendation to that effect and the decision of the Minister was widely circulated in the media. Yet at no time during negotiations with the Minister did the MSPA raise any formal objection to this referral. Should it have been the case, the union would never have signed any of the collective agreements. This is further entrenched by the fact that the sugar companies, members of the MSPA, have duly participated in the submission of memoranda and hearing before the NRB after the matter was referred by the Minister;
   • (iii) issues not covered in a collective agreement can be varied, changed or altered by the proper mechanism provided by the Employment Relations Act 2008 – the Act only precludes the reporting of a labour dispute between the same parties within a period of six months, or precludes the reporting of a labour dispute on the same issues within a period of 24 months; and
   • (iv) the legal framework regulating all wages and all the terms and conditions of service of all employees of the sugar industry, which comprises presently some 13,000 labourers and artisans, are not regulated through a single set of collective agreements, they are regulated by 14 different pieces of legislation or legal instruments. The latest set of collective agreements are roughly regulating only 23 per cent of the issues covered by the 14 legal instruments regulating the minimal terms and conditions of service of some 5,500 labourers and artisans employed by the MSPA members.
5. 697. The Committee wishes to emphasize that the overall aim of Article 4 of Convention No. 98 is the promotion of good faith collective bargaining with a view to reaching an agreement on terms and conditions of employment. The agreements so concluded must be respected and must be able to establish conditions of work more favourable than those envisaged in law, indeed, if this were not so, there would be no reason for engaging in collective bargaining. Public authorities should refrain from any interference which would restrict the right to bargain freely or impede the lawful exercise thereof. Moreover, collective bargaining if it is to be effective, must assume a voluntary character and not entail recourse to measures of compulsion which would alter the voluntary nature of such bargaining [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, paras 881 and 926]. In one case it was alleged that Article 4 of Convention No. 98 had been infringed because, when lengthy negotiations had reached a deadlock, the Government gave effect to the claims of the union by an enactment. The Committee pointed out that such an argument would, if carried to its logical conclusion, mean that, in nearly every country where the workers were not sufficiently strongly organized to obtain a minimum wage, and that this standard was prescribed by law, Article 4 of Convention No. 98 would be infringed. Such an argument would clearly be untenable. If a government, however, adopted a systematic policy of granting by law what the unions could not obtain by negotiation, the situation might call for reappraisal. Moreover, in a case in which general wage increases in the private sector were established by law and which were added to the increases agreed upon in collective agreements, the Committee drew the Government’s attention to the fact that harmonious development of industrial relations would be promoted if the public authorities, in tackling problems relating to the loss of the workers’ purchasing power, were to adopt solutions which did not entail modifications of what had been agreed upon between workers’ and employers’ organizations without the consent of both parties. The harmonious development of labour relations would be facilitated if the public authorities, when dealing with the problems concerning the workers’ loss of purchasing power, adopted solutions which did not involve modifications of agreements without the consent of the parties [see Digest, op. cit., paras 1044, 1045 and 1010].
6. 698. In the present case, the Committee notes that a collective agreement was signed between the complainant and the trade unions on 23 June 2011, whereby the parties agreed to a 20 per cent salary increase. The Committee understands that there is a divergence of view as to whether this agreement brought to a conclusion the 21 issues that had previously been discussed and that the Minister decided to refer to the NRB under Article 91 of the Employment Relations Act 2008 and following the recommendation of the CCM. In these circumstances, the Committee considers that it is not in a position to determine whether the referral made by the Minister was actually in contradiction of the agreement in force or even if it concerned the same group of workers, as the Government states that these questions go beyond those covered by the scope of the collective agreement and concern all workers of the sugar industry. The Committee observes that recourse to bodies appointed for the settlement of disputes should be on a voluntary basis [see Digest, op. cit., para. 932.]
7. 699. In view of the contradictory versions of the complainant, the Government and the trade unions concerned and with respect to the effect on the collective agreements of the action taken by the Minister to refer the 21 issues that could not be resolved during the collective bargaining process to the NRB, and the legality of such action, and noting that the complainant sought leave from the Supreme Court for an application for judicial review to quash, reverse and set aside the decision of the Minister which has still not been determined by the Court, the Committee expects that the abovementioned principles will be brought to the attention of the Court and requests the Government to provide a copy of the court judgment as soon as it is handed down.

The Committee’s recommendations

1. 700. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee draws the attention of the Government to the principles set out in the above conclusions including the constraints which apply to public authorities when intervening in the process of collective bargaining between the social partners.
   • (b) In view of the contradictory versions of the complainant, the Government and the trade unions concerned and with respect to the effect on the collective agreements of the action taken by the Minister to refer the 21 issues that could not be resolved during the collective bargaining process to the NRB, and the legality of such action, and noting that the complainant sought leave from the Supreme Court for an application for judicial review to quash, reverse and set aside the decision of the Minister which has still not been determined by the Court, the Committee expects that the abovementioned principles will be brought to the attention of the Court and requests the Government to provide a copy of the court judgment as soon as it is handed down.