Report in which the committee requests to be kept informed of development - Report No 376, October 2015

Case No 3102 (Chile) - Complaint date: 11-SEP-14 - Follow-up

Allegations: Obstacles to the right to collective bargaining and the right to strike of inter-company trade unions and decreased protection of workers against acts of anti-union discrimination such as dismissal

1. 245. The complaint is contained in communications of the National Confederation of Workers of the Bread and Food Industry (CONAPAN), the National Federation of Unions of Bus and Truck Drivers, and Related Activities of Chile (FENASICOCH), the Inter-Company Union of Workers of Líder Supermarkets, the Federation of United Workers Trade Unions (AGROSUPER), the Inter-Company Union of Contractor Company Workers (SITEC), the Inter-Company Union of Actors of Chile (SIDARTE), the Inter-Company National Union of Professionals and Technicians of the Film and Audio-visual Sector (SINTECI), the Federation of ENAP Contractor Workers of Concón, the Inter-Company Union of Professional Footballers, the Federation of Trade Unions of Workers of ISS Holding Companies and Subsidiaries, and General Services (FETRASSIS) and the Inter-Company Union of Domestic Workers, dated 22 April and 30 July 2013 (received by the Office on 11 September 2014).
2. 246. The Government sent its observations in a communication dated 21 August 2015.
3. 247. 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 complainants’ allegations

1. 248. In their communications dated 22 April and 30 July 2013, the National Confederation of Workers of the Bread and Food Industry (CONAPAN), the National Federation of Unions of Bus and Truck Drivers, and Related Activities of Chile (FENASICOCH), the Inter-Company Union of Workers of Líder Supermarkets, the Federation of United Workers Trade Unions (AGROSUPER), the Inter-Company Union of Contractor Company Workers (SITEC), the Inter-Company Union of Actors of Chile (SIDARTE), the Inter-Company National Union of Professionals and Technicians of the Film and Audio-visual Sector (SINTECI), the Federation of ENAP Contractor Workers of Concón, the Inter-Company Union of Professional Footballers, the Federation of Trade Unions of Workers of ISS Holding Companies and Subsidiaries, and General Services (FETRASSIS), and the Inter-Company Union of Domestic Workers, allege that inter-company unions are legally defined in Chilean legislation as “… unions representing workers of two or more different employers;” (section 216(b) of the Labour Code). The complainant organizations state that they represent thousands of workers in a large number of production activities in various industrial, manufacturing and services sectors in Chile that are essential for the country’s development, such as retail, transport, food, mining, energy (fuel and hazardous substances), arts and communications, industrial cleaning services, and the services provided by domestic workers, actors and professional footballers.
2. 249. However, the legislation makes the fundamental and basic right of the inter-company unions to represent their members in collective bargaining exclusively dependent on the willingness of employers: they decide whether they wish to engage in bargaining. Furthermore, if companies do agree to negotiations, the procedure is not regulated, that is there is no protection for workers, no trade union immunity nor the right to strike.
3. 250. The complainants explain that, in Chile, companies have a guaranteed constitutional right to engage in any kind of economic activity. The right to property gives employers extensive powers and protection, exceeding the provisions of basic social rights; the management and administrative powers of employers are fully protected, and they are fully entitled to organize themselves. They organize themselves under this framework, creating companies, reorganizing them through mergers and demergers; they can generate various business names to hide their real identity; and they can outsource all their services and production, including their own principal business line. This naturally leads to the fragmentation and weakening of trade unions. According to official statistics, 85.5 per cent of production units have not engaged in collective bargaining in the last five years.
4. 251. For instance, in the retail and supermarket sector, there are large chains in which each shop has a different business name, whereby the best means of uniting and bridging gaps to establish a balance of power between the company and the workers is the creation of inter-company trade unions, simply because, in practice, one company can make itself look like several smaller companies.
5. 252. In the transport sector there are various factors such as geography, the distance covered by road transport, work dynamics due to long-distance travel and a company’s drivers being spread out in different parts of the country. This justifies the exercise of the right to organize through inter-company unions. Conditions in the transport sector are similar to the conditions of bakery and cleaning workers, who work on their own, or who carry out their activities or share a workplace with a very small number of fellow workers.
6. 253. According to the complainants, another characteristic of certain sectors in which inter-company unions operate is that they rely heavily on outsourcing, as in the case of communications experts and professionals, who are linked to television companies through one or more intermediate companies; this is also the case of workers in subcontractor companies, where the principal companies operate by breaking down and outsourcing their processes, thereby not appearing to be the employers and those responsible for the overall and final control of working conditions. There are also many other sectors in which workers see their collective power undermined by the high level of business fragmentation that companies often pursue on false pretences.
7. 254. Given the option between two inter-company trade unions, an employer can choose to bargain with one and discriminate against the other without providing any justification for its decision.
8. 255. The complainants indicate that the system in Chile works as follows: once inter-company unions have met a number of legal requirements, they submit a draft collective agreement to the company or companies, which then have ten working days to communicate their discretionary decision to agree or refuse to enter into bargaining, without needing to provide a reason. If, by some miracle, they agree to enter into bargaining, the workers listed on the draft agreement run the risk of being dismissed, given that they are not legally protected by any kind of immunity during the bargaining process. The law does not provide any legal means of pressure, given that inter-company unions do not have the right to strike.
9. 256. In most cases, companies do not recognize the right to collective bargaining of inter-company trade unions, which have to be creative in finding alternative means of representing their members and bargaining. Some of these trade unions are obliged to hide behind the façade of negotiating groups, which are an anti-union practice, or simply to use collective strike action with the risk of disciplinary consequences for participants.
10. 257. Before 1973, road transport workers protected their conditions of pay and other benefits through collective bargaining similar to bargaining at the level of branch of activity, where the State established conditions such as travel allowances and a percentage for lorry sales, which have never since been required of workers. This sector is present throughout the country’s productive industries and has, up till now, not been able to recover the possibility of bargaining at the level of branch of activity.
11. 258. The complainant organizations indicate that a special case is that of art and communications professionals (actresses and actors), who have been excluded from the Labour Code in practice by being put under pressure by television companies to register themselves as sole proprietorships, thereby undermining their identity as workers, even though the relationship of subordination and dependency continues on a permanent basis. The cinema and audio-visual industry works on the basis of fixed-term arrangements, by project or job (such as adverts, television series, documentaries or Chilean films). Accordingly, workers may have several employers throughout the year, which was the reason for creating an inter-company union. Likewise, the trade union in the National Copper Corporation of Chile (CODELCO) was created with the aim of responding to new ways of organizing work (outsourcing and workforce specialization were previously mainly used for work which fell outside the industry’s core areas of expertise).
12. 259. According to the allegations, the above points to a clear violation of ILO Conventions Nos 87 and 98 in practice. Inter-company unions are discriminated against with respect to company unions, which can engage in bargaining without the employer’s consent, and it is not uncommon that when a worker decides to join a union or take on a leading role within a union, the company immediately takes retaliatory action to prevent said decision.
13. 260. Lastly, the complainant organizations reiterate that the trade unions are made up of workers and that they are the ones who must decide which trade union they wish to join and be represented by in all the areas laid down by the union constitution, including in the area of collective bargaining.

B. The Government’s reply

1. 261. In its communication dated 21 August 2015, the Government considers that, as regards the allegations made by the complainant trade union organizations, there has been no violation of freedom of association by the State of Chile. The above is without prejudice to errors or differences of opinion in considering the facts that may exist between the parties and that have been settled through the institutional procedures provided for in Chile, whether in administrative or judicial courts.
2. 262. In this regard, the Government indicates that the Political Constitution of the Republic, under article 19, paragraph 2, states that: “The Constitution grants everyone equality before the law. In Chile no privileges are given to any person or group. In Chile there are no slaves and whoever sets foot on its territory is free. Men and women are equal before the law. Neither the law nor any other authority may create arbitrary differences.” Article 19, paragraph 19, states that: “The Constitution guarantees the right to organize for all in the cases and under the procedures established by law …”
3. 263. The Labour Code also establishes the following:
   • ■ Section 2 …
   • Acts of discrimination are contrary to the principles of labour law.
   • Acts of discrimination are distinctions, exclusions or preferences on the basis of race, colour, sex, age, civil status, union membership, religion, political opinion, nationality, national extraction or social origin, which seek to undermine or alter equality of opportunity or treatment in employment and occupation.
   • ■ Section 212. Workers in the private sector and in state-owned companies, whatever their legal status, have the right to establish, without prior permission, the trade unions that they consider appropriate, the only condition being that they abide by the rules and constitutions of such bodies.
   • ■ Section 214. Minors do not require permission to become members of a trade union, or to participate in its administration and management.
   • Membership of a trade union is voluntary, personal and may not be delegated.
   • No one may be obliged to become a member of a trade union organization in order to take up a job or carry out an activity. Nor should they be prevented from leaving a trade union. …
   • ■ Section 215. The employment of a worker may not be made conditional on membership of or withdrawal from a trade union organization. In the same way, a worker may not be prevented or hindered from joining a trade union, or dismissed or prejudiced in any way due to trade union membership or participation in trade union activities.
   • ■ Section 216. Trade unions shall be constituted and named in accordance with the workers who become members. Among others, the following may be created:
     • (a) company unions: representing workers of one and the same company;
     • (b) inter-company unions: representing workers of two or more different employers;
     • (c) independent worker unions: representing workers who do not work for any employer; and
     • (d) unions for occasional or transitory workers: representing workers who are employed for seasonal or intermittent periods.
4. 264. The Government also indicates that the legislation in force not only establishes the right to organize, elevating it to the status of a constitutional guarantee, but it also protects it by prohibiting its use as a means of discrimination. Regarding the specific case of inter-company unions, they are specifically provided for and described in the aforementioned section 216, paragraph (b), of the Labour Code; it is therefore not true that they are not legally recognized in Chile. In order to initiate collective bargaining proceedings, that kind of trade union has two alternatives:
   • ■ The procedure laid down in section 334 of the Labour Code, in other words, attempting to reach a prior agreement with the employer or employers. In this case, the presentation of the draft collective agreement requires trade unions to meet two requirements: “(a) The respective trade union organization(s) shall reach a prior agreement with the respective employer(s), in writing and before a notary public”, and “(b) In the company concerned, an absolute majority of worker members entitled to engage in collective bargaining shall confer, by secret ballot, representation on the trade union concerned in an assembly and in the presence of a qualified witness”.
   • ■ Directly presenting a draft collective agreement in accordance with the provisions under section 334bis of the aforementioned legal text. In this case, even when, due to its legal status, the inter-company union represents workers of more than one employer, it is entitled to present a draft collective agreement, in representation of its members and of the workers who become members, to the employers of workers who are members of that trade union, without the prior consent of the respective employer or employers, as required by the rule governing the aforementioned procedure. It should be noted that, in this second procedure, negotiation with the inter-company trade union is voluntary or optional for the employer, but if it declines to enter into negotiations, which must be notified within a period of ten days, members of the trade union working for the same employer are entitled to bargain collectively in accordance with the general rules established by the Labour Code.
5. 265. The Government indicates that, according to the official figures issued by the Labour Directorate, which is the technical body in charge of the registration of collective agreements, a total of 127 such agreements were registered in 2013, a total of 152 in 2014 and to date, 74 collective agreements have been registered in 2015. The above amounts to a total of 353 agreements, resulting from collective inter-company bargaining, directly benefiting 48,152 workers.
6. 266. In the light of the above, it is considered that the inter-company collective bargaining model, despite its imperfections and differences in its interpretation, has been applied effectively, leading to many improvements in the working conditions of thousands of workers.
7. 267. The Government reports that it is currently in the process of carrying out a reform to modernize the industrial relations system. With this objective, the Government submitted for examination (Official Gazette No. 1055-362) the draft act introducing the necessary amendments to the Labour Code, seeking to guarantee a balance between the parties and the full respect of freedom of association. This draft act (which the Government attaches to its reply) not only seeks to amend the current regulation of the right to strike, in order to strengthen its exercise, but it also makes the workers who are members of the trade union eligible to bargain collectively, prohibiting negotiation groups in those companies and regulating the existence of minimum bargaining rights and the extension of benefits.
8. 268. As regards the allegations contained in the complaint, the Government indicates that the draft Act, currently under examination, recognizes the right of inter-company unions to bargain in the companies in which they have an equivalent number of members to that required for the creation of a company union for the purposes of bargaining, thereby giving them the necessary rights to act on behalf of their members. Evidence of the above is the wording of the draft, under section 362, which was recently approved by the chamber of representatives as follows:
   • Section 362. Collective bargaining by inter-company unions. Inter-company unions may bargain in accordance with the collective bargaining procedure established in Title IV of this Book, pursuant to the amendments established in this Chapter. In this last case, the company may not refuse to enter into bargaining.
9. 269. As of 30 March 2015, the draft was qualified as urgent in the National Congress and is currently under examination by the National Senate at the second constitutional level, the general idea of legislating having been approved by a vote of 19 August 2015, which gave rise to the period during which the Government can present its observations.
10. 270. In the light of all the clarifications set out above and the current reform process on the legal framework for collective bargaining, the Government considers that the complaint is unfounded.

C. The Committee’s conclusions

1. 271. The Committee notes that the complainant organizations allege that: (i) the inter-company unions (“… representing workers of two or more employers” (section 216(b), of the Labour Code)) have not been guaranteed the fundamental right to represent their members in collective bargaining, given that this depends on a decision by the employer as to whether it wishes to engage in negotiations, whereby if the employer does agree to enter into negotiations, these are conducted outside the regulated procedure, without any protection against dismissal for the workers covered by the draft collective agreement (not participating in negotiations) and without being able to exercise the right to strike; (ii) this situation hampers bargaining in certain areas of activity and the representation and bargaining of workers who perform the same services (such as domestic workers, bakers, drivers, etc.), especially given that companies can fragment their structures, generating various business names in different parts of the country; (iii) in some cases, such as that of actors, workers are put under pressure to register themselves as sole proprietorships, even though their relationship of subordination and dependency continues; and (iv) some inter-company unions are obliged, in this context, to resort to the anti-union practice of forming “workers’ groups” or to use collective actions such as strikes, exposing themselves to legal sanctions as they do not have the right to strike. According to the complainants, the natural consequence of the above is trade union fragmentation and the consequent weakening of trade unions, which is the objective that has been pursued on many occasions.
2. 272. The Committee takes note of the legal and constitutional provisions in force, as set out by the Government in its reply and in its explanation of their scope, and the statistics on the number of collective agreements concluded by inter-company trade unions and their coverage of workers. The Committee also takes note of the Government’s opinion that the legislation in force does not violate freedom of association and that the complaint addresses problems that have been resolved by the relevant authorities, either through the administrative or the judicial courts; the Government’s reply indicates that, with certain majorities, the inter-company trade union may bargain collectively (section 334 of the Labour Code).
3. 273. The Committee also notes that the Government reports on a partial draft reform of the Labour Code as regards labour relations, which is under examination by the National Congress. The Committee notes that the Government declares that the draft in question: (1) recognizes the right of inter-company unions to bargain in companies (without companies being able to oppose this) when they have attained the number of members required for the establishment of a company union, thereby granting them the rights required to act on behalf of their members; (2) authorizes inter-company unions to use the regulated procedure for other types of trade unions, thereby granting members “bargaining immunity” (protection against dismissal); (3) prohibits the existence of negotiating groups (of workers); and (4) regulates the existence of minimum bargaining rights and the extension of benefits.
4. 274. The Committee requests the Government to communicate the text of the act amending the Labour Code as soon as it is adopted which, according to all information from the Government, recognizes the right to strike of inter-company unions. The Committee observes that the draft act addresses some of the points highlighted by the complaint in a manner that would bolster the principles of freedom of association and collective bargaining.

The Committee’s recommendation

1. 275. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • Noting that the partial draft reform of the Labour Code, currently under examination, contains provisions which address some of the points raised in the complaint in a manner so as to bolster the principles of freedom of association and collective bargaining, the Committee requests the Government to communicate the text of the act as soon as it is adopted.