Definitive Report - Report No 371, March 2014

Case No 2963 (Chile) - Complaint date: 14-JUN-12 - Closed

Allegations: The complainant alleges that the enterprise CODELCO, pursuant to provisions of the Labour Code which are not in conformity with Conventions Nos 87 and 98, has excluded workers with temporary contracts for work or for services, and also those serving as superintendents or directors, from collective bargaining; discourages exercise of the right to organize, in that non-union workers, who enjoy the benefits stipulated in a collective instrument, are obliged to pay 75 per cent of the ordinary monthly union dues; and outlawed a work stoppage called in response to the policy implemented by the state enterprise to impose its transformation plans, because they are outside the collective bargaining process

1. 222. The complaint is set out in a communication from the National Federation of the Unions of Supervisors, List A, and Professionals of the Enterprise CODELCO (FESUC), dated 14 June 2012.
2. 223. The Government sent its observations in a communication of August 2013.
3. 224. Chile has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant’s allegations

1. 225. In its communication dated 14 June 2012, FESUC reports that it has affiliated six unions and some 1,800 professionals working for the Enterprise CODELCO (hereinafter referred to as “the enterprise”). The union was established on 28 October 1993 in the city of Chuquicamata by the supervisors’ unions of the El Teniente, Andina, Salvador, Tocopilla and Chuquicamata divisions and by the central office. In its by-laws, FESUC states that its founding mission is to “uphold and develop the fundamental rights of workers, especially the freedom of association and collective bargaining enshrined in Conventions Nos 87 and 98 of the International Labour Organization”.
2. 226. FESUC notes that the approach to law in Chile is extremely legalistic and positivist, to the extent that what is not expressly regulated by ordinary law is considered to have no existence as a right, and, to the extent that it is not expressly authorized by law, it cannot be exercised. In its view this implies that the theory which suggests that ILO Conventions are only applicable in Chile to the extent that they are explicitly recognized by domestic law, rather than by being ratified and in force in this country, is often used to render null and void the content of such agreements. This means that, in practice, increasing currency is being given to a particular type of misunderstanding and a systematic violation of the ILO Conventions in force in Chile. Since the ratification by the Chilean Parliament in 1999 and the adoption and entry into force in Chile of ILO Conventions Nos 87 and 98, together with the other ILO Conventions already ratified by Chile, the state authorities have not carried out the constitutional and legal reforms necessary to ensure and give effect to the principle of freedom of association and to the other principles enshrined in these Conventions. The National Congress has only revised certain regulations (by Law No. 19759), but has maintained others that run counter to international standards on freedom of association, rendering it impossible to implement the reforms in practice.
3. 227. FESUC claims that figures provided by the Department of Labour show that the historically low rate of unionization since 1973 has not improved, and has even decreased. Currently there are unions at only 5.5 per cent of firms in Chile, with a membership rate of 13.6 per cent, and collective bargaining is marginal, covering a mere 4 per cent of male and female workers.
4. 228. FESUC alleges that the enterprise has violated and continues to violate the Conventions on freedom of association and collective bargaining. It specifically cites the following violations:
   • ■ Limitation of the right to collective bargaining, employing the arguments of article 305 of the Labour Code. FESUC alleges that, during the collective bargaining process undertaken by one of the unions affiliated to the Federation in 2011, the enterprise invoked article 305 of the Labour Code to exclude from that collective bargaining all workers who had temporary contracts for work or services in the “Radomiro Tomic” organization and those serving as directors or superintendents in the “Ministro Hales” establishment. FESUC claims that the exclusion of CODELCO supervisors from collective bargaining constitutes an encroachment on the freedom of association of these workers; not only are they deprived of their fundamental right to collective bargaining, but the bargaining position of the supervisors’ union is itself also weakened by the drop in numbers of members and the lack of potential growth in the section composed of senior professionals, as they are deprived of their legitimate right to collective representation.
   • ■ Limitation of the right to organize and collective bargaining, citing the provisions of article 346 of the Labour Code which requires that non-union workers who enjoy the benefits stipulated in a collective instrument should pay 75 per cent of the ordinary monthly union dues. FESUC points out that, whenever a supervisors’ union negotiates collectively, the enterprise extends to non-union workers all the benefits secured by the union. FESUC notes that the collective bargaining process and most of the activities involving worker representation must be financed by union dues (ordinary and extraordinary), which are also used for the commissioning of studies, consultancies and other activities that are part of that process, such as work meetings, assemblies and communications with its workers and affiliated workers. At the same time, union workers must use their own time and resources to attend meetings, study the proposals and counter-proposals and, if necessary, carry out the strike, during which the worker receives no remuneration. Non-union workers reap the benefits of the efforts, sacrifice, expenditure and investments made by both the union and the union workers, but without contributing any funding or investment of their own, or taking part in any strike action. Thanks, however, to the existence of article 346 of the Labour Code and its observation by the employer, they receive the full set of benefits achieved by the union through collective bargaining, while only being required to pay 75 per cent of the ordinary union dues.
   • ■ In the enterprise there are about 3,500 supervisors, some 1,800 of whom are unionized. Thus, in practice, the 3,500 enterprise supervisors receive benefits equivalent to those gained by the unions affiliated to FESUC in each division, but the aforementioned costs and negotiation efforts fall exclusively on the shoulders of the 1,800 union workers represented in their trade union organizations. In consequence, the nearly 1,700 non-union supervisors, in keeping with the provisions of article 346 of the Labour Code, have no real incentive to join the union, because under this rule they enjoy the same benefits as union workers, but at a much lower cost than that borne by the union workers.
   • ■ Limitation of the right to strike, pursuant to article 369 and other provisions of the Labour Code. In 2011, the Federation of Copper Workers (FTC) called for a complete stoppage of all work in the enterprise, to take place on 11 July 2011. Accordingly, almost all the enterprise’s unions, including those affiliated to FESUC, went on strike against the state enterprise’s policy to impose its transformation plans, and the fact that many of the measures taken not only created precarious working conditions for staff but were designed to move the enterprise in the direction of privatization. This strike did not fall within the collective bargaining process described in Chilean law. The enterprise maintained and continues to maintain that the stoppage was illegal and threatened to fire workers who took part, calling into question the right of workers to carry out a legal strike outside the collective bargaining process.

B. The Government’s reply

1. 229. In its communication of August 2013, the Government states that the enterprise had highlighted the existence of the rule of law, a judiciary, and legal, political and administrative institutions which fully safeguarded the individual and collective rights of citizens. The enterprise adds that, before filing the present complaint, FESUC had taken no action through the appropriate bodies provided for by Chilean legislation. The enterprise reports that, in December 2012, it had a workforce of 19,019 of its own workers and 28,360 workers subcontracted from other firms, supporting its operations and services, in addition to 27,347 workers from contracting companies associated with the enterprise’s construction or investment projects. The enterprise states that there are 20 unions with an overall membership of 13,866, a figure that represents 97.8 per cent of its total workforce. Where List A supervisors are concerned, the enterprise notes that there are seven unions, all affiliated to FESUC, with 1,758 members, equivalent to 52.1 per cent of the total number of List A supervisors. The enterprise adds that, owing to the depletion of its productive resources, it had come up with a new business strategy referred to as “structural projects”. This strategy has led to the adoption of decisions that will create the appropriate organizational conditions to ensure the efficient implementation of these structural projects.
2. 230. The enterprise maintains that all wages and working conditions set out in the contracts and collective agreements are the result of free and voluntary collective bargaining and that these contracts or collective agreements, in addition to having been freely agreed with the trade unions, contain no discriminatory clauses. In the collective bargaining process within the enterprise, trade unions exercise a constitutional right under which they agree on conditions of employment and collective instruments. These offer benefits far superior to those contained in other contracts or collective agreements concluded in Chile. It is recognized that workers have the right to take action, including strike action.
3. 231. For its part the Government states that, in the case in question, FESUC had exercised its right of recourse to the ILO, but without having exhausted the remedies available at the national level. The Government believes that it would be difficult to bring a case at international level if there had not even been any opportunity for discussion at domestic level. In the Government’s view, it should be stressed that certain provisions of the Political Constitution relating to the fundamental rights of individuals, the mechanisms for upholding those rights, the functions of the state authorities and agencies responsible for monitoring the legality of certain administrative acts and laws demonstrate that the country has a democratic system subject to effective checks and balances. This system enables, at different levels and using different legal and policy tools, the implementation of measures designed to improve the democratic system itself, through the principles, institutions and processes set out in the Constitution and the law. Lastly, the Government states that, on the basis of the information provided and the statements made by the enterprise, it dismisses the complaint and refutes as unfounded the complaint by FESUC alleging violations of Conventions Nos 87 and 98.

C. The Committee’s conclusions

1. 232. The Committee observes that in the present case the complainant alleges that the enterprise CODELCO: (1) invoking the provisions of article 305 of the Labour Code, has excluded workers with temporary contracts for work or services in the organization “Radomiro Tomic” from the collective bargaining process, and also excludes those serving as directors or superintendents in the establishment “Ministro Hales”; (2) by applying article 346 of the Labour Code, which requires non-union workers who are the recipients of benefits under a collective instrument to pay 75 per cent of the regular monthly union dues, is discouraging individuals from exercising their right to organize; and (3) in accordance with articles 369 et seq. of the Labour Code outlawed a work stoppage against the policy that the state enterprise was applying, with a view to pushing through its transformation plans, because they were being developed outside the collective bargaining process.
2. 233. With regard to the alleged exclusion from collective bargaining of workers with temporary contracts for work or services in the “Radomiro Tomic” establishment and of those serving as directors or superintendents in the “Ministro Hales” establishment, the Committee notes that the Government indicates that the enterprise has stated the following: (1) there are 20 unions with 13,866 members, representing 97.8 per cent of the total workforce; (2) where the List A supervisors are concerned, the enterprise has stated that there are seven unions, all affiliated to FESUC, comprising 1,758 members, equivalent to 52.1 per cent of the overall number of List A supervisors; (3) in the light of the depletion of productive resources, a new business strategy has been formed, known as “structural projects”, and this strategy has resulted in decisions setting in place organizational conditions that will ensure the efficient implementation of these structural projects; (4) all wages and working conditions set out in the contracts and collective agreements are the result of free and voluntary collective bargaining and the contracts or collective agreements, as well as having been freely agreed on with the trade unions, contain no discriminatory provisions; (5) in the collective bargaining process within the enterprise the trade union organizations can exercise their constitutional right to agree on terms of employment, and the collective instruments provide for benefits far superior to those accorded in other contracts or collective agreements concluded in Chile. For its part, the Government states that: (1) FESUC has exercised its right to approach the ILO, but without having first exhausted the remedies available at the national level; and (2) it should be emphasized that certain provisions of the Constitution relating to the fundamental rights of individuals, the mechanisms for the protection of those rights, the functions of the state authorities and the agencies responsible for monitoring the legality of certain administrative acts and other laws all demonstrate that this country has a democratic system subject to effective checks and balances.
3. 234. In this regard, the Committee recalls that, with the exception of organizations representing categories of workers which may be excluded from the scope of Convention No. 98, such as the armed forces, the police and public servants engaged in the administration of the State, recognition of the right to collective bargaining is general in scope and all other organizations of workers in the public and private sectors must benefit from it. This being the case, recalling the principle according to which “temporary workers should be able to negotiate collectively” (see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 906), and while noting that neither the enterprise nor the Government referred to the specific allegations pertaining to this case, and restricting itself to observing that the right to collective bargaining is fully respected in the enterprise, the Committee requests the Government to take the appropriate measures, including legislative measures if necessary, to ensure that the respective workers’ organizations will be able to bargain collectively on behalf of all workers, including those with temporary contracts for work or services, and also those serving as superintendents or directors.
4. 235. Regarding the allegation that the application of article 346 of the Labour Code, which requires non-union workers who enjoy benefits provided under a collective instrument to pay 75 per cent of the ordinary monthly union dues, discourages exercise of the right to organize, the Committee points out that it has stated on numerous occasions that, when legislation admits trade union security clauses, such as the withholding of trade union dues from the wages of non-members benefiting from the conclusion of a collective agreement, those clauses should only take effect through collective agreements [see Digest, op. cit., para. 480]. The Committee requests the Government to take the appropriate measures, including legislative if necessary, to ensure respect for this principle.
5. 236. Regarding the allegation that, under articles 369 et seq. of the Labour Code, the enterprise declared illegal a work stoppage called against the policy applied by the state enterprise with a view to pushing forward its transformation plans, because these were being developed outside the collective bargaining process, the Committee notes that the enterprise has stated that: (1) in the light of the depletion of productive resources a new business strategy has been formed, known as “structural projects”, and this strategy has resulted in decisions setting in place organizational conditions that will ensure the efficient implementation of these structural projects; and (2) it recognizes the right of workers to take action, including strike action. In this regard, the Committee points out that “the occupational and economic interests which workers defend through the exercise of the right to strike do not only concern better working conditions or collective claims of an occupational nature, but also the seeking of solutions to economic and social policy questions and problems facing the undertaking which are of direct concern to the workers” [see Digest, op. cit., para. 526]. In these circumstances, the Committee requests the Government to take all appropriate measures, including legislative if necessary, to uphold this principle.
6. 237. Lastly, the Committee observes that, during its review of the application of Conventions Nos 87 and 98, the Committee of Experts on the Application of Conventions and Recommendations (CEACR) examined several issues of law arising in this case and noted that the Government had reiterated its willingness to incorporate into the relevant national legislation all the necessary provisions to ensure prompt alignment with the Conventions in question. The Committee trusts that, as part of the legislative reforms referred to by the Government, the principles identified in this case will be fully taken into account, and draws the legislative aspects of this case to the attention of the CEACR.

The Committee’s recommendations

1. 238. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee requests the Government to take the necessary measures, including legislative if necessary, to ensure that the respective workers’ organizations will be able to bargain collectively on behalf of all workers, including those with temporary contracts for work or services, and also those serving as superintendents or directors.
   • (b) Recalling the principle that the occupational and economic interests which the workers defend through the exercise of the right to strike do not only concern better working conditions or collective claims of an occupational nature, but also the seeking of solutions to economic and social policy questions and problems facing the undertaking which are of direct concern to the workers (see Digest, op. cit., para. 526), the Committee requests the Government to take all appropriate measures, including legislative if necessary, to uphold this principle.
   • (c) The Committee requests the Government to take the appropriate measures, including legislative if necessary, to guarantee the respect for the principles enunciated in its conclusions, and draws the legislative aspects of this case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.