Interim Report - Report No 386, June 2018

Case No 3219 (Brazil) - Complaint date: 19-MAY-16 - Closed

Allegations: The complainants report that SINTHORESP has been unfairly deprived of the right to represent fast-food workers in the state of São Paulo and has been fined for bringing court proceedings requesting the payment of trade union contributions

1. 121. The complaint is contained in a joint communication dated 1 December 2015 from the Union of Hotel, Bar, Cafeteria and Allied Workers of São Paulo and the Surrounding Region (SINTHORESP), the National Confederation of Tourism and Hospitality Workers (CONTRATUH) and the New Workers’ Federation (NCST) and additional communications of 16 September and 7 December 2016 and 17 March 2017 from SINTHORESP.
2. 122. The Government sent its observations in a communication of 5 May 2017.
3. 123. Brazil has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), but it has ratified 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. 124. In their communication of December 2015, the complainants allege that a court judgment imposing a high fine on SINTHORESP for bringing legal proceedings is hindering the trade union’s access to justice and constitutes a violation of freedom of association. The complainants allege, specifically, that: (i) on 24 September 2015, the 75th Labour Court of São Paulo fined SINTHORESP 100,000 Brazilian reais (BRL) (approximately US$31,000) for bringing separate court proceedings requesting that several restaurants in the McDonald’s franchise (hereinafter the “fast-food chain”) pay it the trade union dues that it was owed; (ii) the amount of the fine is exorbitant when compared with the sum that the union requested in the proceedings (BRL4,324); (iii) the purpose of the fine was to place the union’s activities under the State’s control through arbitrary action that violates Article 3(2) of Convention No. 87, which prohibits the public authorities from interfering in trade union activities; (iv) the union was entitled to request, through separate judicial proceedings, that each of the fast-food chain’s restaurants pay the trade union contribution since each of them is registered as a separate entity; (v) while SINTHORESP is alleged to have committed judicial harassment and was fined for doing so, the proceedings that it brought are, in reality, an example of its trade union activism aimed at defending workers in the restaurant industry as a whole and those of the fast-food chain in particular, including by attempting to eliminate zero-hours contracts in that chain; and (vi) the fine imposed on SINTHORESP therefore constitutes a clear violation of the obligation of the public authorities in general, and the judiciary in particular, to protect freedom of association.
2. 125. In its other communications, the complainant states that the fine imposed by the judiciary is part of a broader pattern of hostility towards SINTHORESP on the part of the enterprise and the State and, in that connection, that: (i) court decisions have deprived it of the right to represent fast-food restaurant workers in the state of São Paulo; only the Union of Fast-Food Workers of the City of São Paulo (SINDIFAST) may do so; (ii) this is only true in the state of São Paulo; SINTHORESP is still recognized as the union that represents restaurant workers – including fast-food workers – in the rest of the country; (iii) the denial of SINTHORESP’s right to represent fast-food workers in the state of São Paulo is an example of the protection that the public authorities grant to the aforementioned fast-food chain owing to the magnitude of the economic interests at stake since 40 per cent of the chain’s Brazilian restaurants are located in that state; (iv) the fast-food workers who were the stakeholders most directly concerned were not consulted as to which trade union should represent them; and (v) the Government has made no attempt to facilitate consultations between the various trade unions with a view to a fair resolution of this dispute concerning representation.
3. 126. The complainants add that: (i) as a consequence of the establishment of the “yellow” union, SINDIFAST, and the subsequent replacement of SINTHORESP as the union entitled to represent fast-food workers in the state of São Paulo, SINDIFAST brought court proceedings in two venues – the labour court and the ordinary court – requesting retroactive payment by SINTHORESP of the fast-food restaurants’ union dues; (ii) pending the issuance of the relevant court judgments, SINTHORESP’s bank accounts have been frozen, preventing it from paying the wages of its 800 employees and providing services to its members and the workers that it represents; (iii) SINDIFAST is calling for the payment of millions of Brazilian reais and a court decision in its favour would threaten the very existence of SINTHORESP, preventing it from defending the over 200,000 restaurant workers who use its services on a daily basis; and (iv) all of the foregoing is proof that the Government and the employers are attempting to weaken one of the world’s largest trade unions for the industry through trade union fragmentation.

B. The Government’s reply

1. 127. In a communication of 5 May 2017, the Government forwards the information provided by Brazil’s Supreme Labour Court. With respect to the aspect of the complaint that concerns the fine imposed on SINTHORESP for judicial harassment, the Court states that: (i) the alleged events do not constitute a violation of any national or international standard on freedom of association; (ii) SINTHORESP brought countless legal proceedings requesting that retail establishments be required to pay the compulsory trade union dues to it rather than to other trade unions; (iii) in all of these cases, the court found that the enterprises in question did not fall within the scope of SINTHORESP’s activities and that the compulsory dues were being paid to the appropriate trade unions; (iv) pursuant to Brazilian law, because SINTHORESP continued to bring new legal proceedings even though the courts had already ruled on the cases in question, the courts cautioned that the complainant was using the judicial system in bad faith; (v) the fine of BRL100,000 (approximately US$31,000) that the courts imposed on SINTHORESP reflects both the seriousness of the union’s conduct and the economic value of the subject of the proceedings brought before the court (over BRL4 million; (vi) the size of the fine does not threaten the union’s existence or reduce its ability to act since its economic resources are sufficient to comply with the court judgment; (vii) under Brazil’s legal system, the complainant had available to it more than ten avenues for challenging the judgment in the courts; (viii) the complainant was given every opportunity to mount a defence and the judgment issued respected all the rules of due process and was in no way flawed; (ix) the courts did not interfere with SINTHORESP’s activities since, by bringing judicial proceedings, the union itself requested them to intervene; and (x) the fact that the complainant was fined for flagrant misuse of judicial remedies is proof that the laws are applicable to all subjects of law.

C. The Committee’s conclusions

1. 128. The Committee observes that the present case concerns the situation in the fast food industry of a trade union in the restaurant sector, SINTHORESP, which, under the legal mechanism of enquadramento sindical (trade union coverage), has lost the right to represent fast-food workers in the state of São Paulo. In that connection, the Committee observes that according to the trade union: (i) the public authorities’ refusal to allow it to represent the aforementioned workers is unwarranted; and (ii) the fine that the courts imposed on the union for “judicial harassment” after it had brought numerous proceedings requesting that fast-food restaurants in the state of São Paulo continue to pay trade union contributions to it constitutes a violation of the union’s freedom of association.
2. 129. With regard to the allegation that the complainant has been unfairly denied the right to represent fast-food workers in the state of São Paulo, the Committee takes note of the complainant’s allegation that: (i) through court decisions, it was replaced by SINDIFAST, a trade union viewed as sympathetic to the employers’ interests; (ii) such a replacement took place only in the state of São Paulo and is an example of the protection that the public authorities grant to one fast-food chain in particular owing to the magnitude of the economic interests at stake since 40 per cent of the chain’s Brazilian restaurants are located in that state; (iii) the fast-food workers were not consulted as to which trade union should represent them; (iv) the Government has made no attempt to facilitate consultations between the various trade unions with a view to a fair resolution of this dispute concerning representation; (v) on the contrary, SINDIFAST has brought legal proceedings requesting retroactive payment by SINTHORESP of millions of reais in fast-food restaurants’ union dues; and (vi) all of the foregoing is proof that the Government and the employers are attempting to weaken one of the world’s largest trade unions for the industry through fragmentation.
3. 130. The Committee notes with regret that to date, the Government has not sent its observations on this aspect of the complaint related to the legal mechanism of enquadramento sindical, whereby a single union is empowered to represent the workers in a given industry and geographical area. On this point, the Committee recalls that it has long since expressed its views on Brazil’s single trade union system, emphasizing that the imposition by law of the trade union monopoly in Brazil is not compatible with the principles of freedom of association and therefore urging the Government to ensure that national law was brought into conformity with such decisions [see, for example, Case No. 2099, 325th Report, para. 193]. The Committee has also recalled in general terms that workers and employers should be able to freely choose which organization will represent them for purposes of collective bargaining and that systems based on a sole bargaining agent (the most representative) and those which include all organizations or the most representative organizations in accordance with clear pre-established criteria for the determination of the organizations entitled to bargain are both compatible with Convention No. 98 [see Compilation of decisions of the Committee on Freedom of Association, sixth edition, 2018, paras 1359–1360]. Emphasizing the importance of the above for collective labour relations systems in general and Brazil’s system in particular, the Committee requests the Government to send promptly its observations on the complainant’s allegation that it was deprived of the right to represent fast-food workers in the state of São Paulo including information on the procedures and decisions that led to such situation. The Committee also requests the complainant to provide more detailed information on the extent of its representativeness in the state of São Paulo in general and in the state’s fast-food restaurants in particular as well as updated information on the court proceeding that SINDIFAST would have initiated against SINTHORESP.
4. 131. With respect to the fine that the courts have reportedly imposed on SINTHORESP for judicial harassment, the Committee notes that according to the complainant: on 24 September 2015, the 75th Labour Court of São Paulo fined SINTHORESP BRL100,000 (approximately US$31,000) for bringing separate court proceedings requesting that several of a franchise’s restaurants pay it the trade union dues that it was owed; (ii) the amount of the fine is exorbitant and was intended to place the union’s activities under the State’s control; (iii) the large number of judicial proceedings is a consequence of the fact that each of the chain’s restaurants is registered as a separate entity; and (iv) the numerous proceedings that SINTHORESP has brought, which the judiciary views as judicial harassment, are in reality an example of its trade union activism, which is necessary in order to improve the working conditions of fast-food workers and defend them from the emergence of unions that are sympathetic to the employers. The Committee also notes that the Government forwards the reply from the President of the Federal Labour Court, who states that: (i) SINTHORESP brought countless legal proceedings requesting that retail establishments be required to pay the compulsory trade union dues to it rather than to other trade unions; (ii) in all of these cases, the court found that the enterprises in question did not fall within the scope of SINTHORESP’s activities and that the compulsory dues were being paid to the appropriate trade unions; (iii) because SINTHORESP continued to bring identical legal proceedings, the courts cautioned that the complainant – which, like other subjects of law, must respect the laws – was using the judicial system in bad faith; (iv) the fine of BRL100,000 reflects the seriousness of the union’s conduct and the size of the fine does not threaten its existence; and (v) due process and the right to a defence were respected and the union had available to it many avenues for challenging the judgment.
5. 132. The Committee recalls that freedom of association implies not only the right of workers and employers to form freely organizations of their own choosing, but also the right for the organizations themselves to pursue lawful activities for the defence of their occupational interests [see Compilation, op. cit., para. 716]. The Committee emphasizes that, to that end, occupational organizations must have free access to the courts in order to defend their interests and those of their members without fear of adverse consequences that might serve as a deterrent to subsequent legal proceedings. While taking due note of the statement by the Supreme Labour Court that trade unions, like other subjects of law, must obey the laws, the Committee observes that in the present case, it does not have sufficient information to determine whether freedom of association has been restricted.

The Committee’s recommendation

1. 133. In the light of its foregoing interim conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • Recalling that it is important for workers to be able to freely choose which organization will represent them, the Committee requests the Government to send promptly its observations on the complainant’s allegation that it was deprived of the right to represent fast-food workers in the state of São Paulo, including information on the procedures and decisions that led to such situation. The Committee also requests the complainant to provide more detailed information on the extent of its representativeness in the state of São Paulo in general and in the state’s fast-food restaurants in particular as well as updated information on the court proceeding that SINDIFAST would have initiated against SINTHORESP.