Definitive Report - Report No 396, October 2021

Case No 3354 (Costa Rica) - Complaint date: 18-MAR-19 - Closed

Allegations: The complainant organizations allege mass dismissals, including of union leaders, and the revocation of collective bargaining agreements in two multinational enterprises in the agro-industrial sector. They also allege a lack of effective protection by the State

1. 231. The complaint is contained in a joint communication from the Confederation of Workers Rerum Novarum (CTRN), the National Federation of Agro-industry, Hotel and Catering and Allied Workers (FENTRAGH) and the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tourism, Tobacco and Allied Workers’ Associations (IUF/UITA) , dated 18 March 2019.
2. 232. The Government sent its observations in communications dated 19 December 2019 and 6 October 2021.
3. 233. Costa Rica 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 Workers’ Representatives Convention, 1971 (No. 135).

A. The complainant’s allegations

1. 234. In their communication dated 8 March 2019, the complainants allege that the changes that have taken place since 1 March 2019, with the opening of the new container terminal in Moín, in the province of Limón, operated under a concession by a multinational port company, have led to two multinational enterprises in the agro-industrial sector (Standard Fruit Company de Costa Rica, S.A). (hereinafter enterprise A) and Chiquita Brands Costa Rica S.R.L. (hereinafter enterprise B) carrying out mass, illegal dismissals of workers. The complainants allege, more specifically, that these enterprises abruptly closed port operation work sites located in the province of Limón, leading to the dismissal of workers and union representatives of the following unions: the Free Industrial Union of Banana and Allied Workers of Costa Rica (SINTRACOBAL); the Industrial Union of Agricultural and Allied Workers (SINTRAGA); and the Industrial Union of Agricultural, Agricultural Transport and Allied Workers of Costa Rica (SINTRASTAFCOR). These are affiliated to the complainant organizations CTRN and FENTRAGH, which are themselves affiliated to the IUF/UITA.
2. 235. Regarding enterprise A, the complainants allege that: (i) on 24 March 2019, the enterprise abruptly closed the work site located in the province of Limón without prior notice, which had an impact on the employment of 480 workers; and (ii) the enterprise revoked the collective agreement signed with SINTRASTAFCOR and dismissed SINTRAGA and SINTRASTAFCOR union representatives without following legal procedures or respecting their trade union immunity. They also allege that the Ministry of Labour and Social Security (hereinafter MTSS) failed to guarantee the protection of trade union immunity and the collective agreement; rather, through an agreement, it endorsed the authorization of the illegal closure of the work site and, as a result the dismissals.
3. 236. Regarding enterprise B, the complainants allege that: (i) on 4 March 2019, the enterprise abruptly, and using violence, closed the work site located in the province of Limón, which had an impact on the employment of 380 workers, including SINTRACOBAL union leaders; and (ii) the enterprise revoked the collective labour agreement signed with the trade union and deprived it of the union premises located inside the enterprise, denying it access to the building to which it has a right under article 101 of the above-mentioned collective agreement. The complainants state that inside the union premises there is a training room and offices with furniture and fittings, documents, office equipment, computers, a camera, video projectors, a television screen, records and accounts and other property and documents, and allege that to date the enterprise has failed to provide any information on their whereabouts. They also allege that vehicle BDB-037, which belongs to SINTRACOBAL, was still inside the enterprise’s facilities and that, following a complaint filed by SINTRACOBAL with the MTSS, labour inspectors visited the work site and issued an official report.
4. 237. The complainants consider that no provision is made in the Labour Code for any mechanisms, other than illegal work stoppages, to oppose mass dismissals, and allege that protection through the MTSS system to monitor unfair labour practices is slow, bureaucratic and does not act ex officio. The complainants state that complaints were filed with the Limón Labour Court regarding the closure of both work sites and point out that, in the case of enterprise A, the court rejected the complaint and indicated that it was not appropriate to process a socio-economic collective dispute, as the dismissals had already been carried out and there was no longer any dispute to prevent. The complainants consider that the court completely failed to take into account the fact that the union leaders had been dismissed without following the relevant procedure and that a collective agreement had been revoked (File No. 19-000071-0679-LA). With regard to enterprise B, they state that the Limón Labour Court also rejected the claim for the closure to be classified as an illegal lockout, which is being processed under File No. 19 000250-0679-LA, and that an appeal against the ruling has been filed by the trade union.
5. 238. The complainants allege that the purpose of the mass dismissals was to outsource work to contractors where freedom of association is not observed and consider that this is all happening with complete impunity and without any significant action being taken by the MTSS. They also highlight that, according to the 2018 report issued by the National Statistics and Census Institute, the province concerned has the lowest Human Development Index in the country and that 43 per cent of the population is excluded from formal employment. They indicate that illiteracy and poverty rates are also high, and that the actions of these enterprises are therefore exacerbating the current situation.

B. The Government’s reply

1. 239. In its communications of 19 December 2019 and 6 October 2021, the Government sent its observations (which include reports from the Office of the Deputy Minister of Labour and Social Security for the Labour Sector, the Directorate of Labour Affairs and the National Directorate and General Labour Inspectorate, as well as from the judiciary), and the responses of the enterprises concerned.
2. 240. Regarding enterprise A, the enterprise indicates that: (i) on 24 January 2019, it informed the workers of the imminent closure of the work sites located in the province of Limón; (ii) the closure was due to the services carried out at that work site being taken over by a multinational port company that had the public works concession for the container terminal; (iii) on 24 and 28 January the enterprise held conciliation meetings at the MTSS regional headquarters in Limón with SINTRASTAFCOR (with which it had signed a collective agreement), the CTRN, FENTRAGH, the minister, deputy ministers and head of coordination of the Alternative Dispute Resolution Unit at the MTSS Limón headquarters; (iv) on 28 January, the parties reached an agreement in which the enterprise undertook to take steps that were not only financial in nature but that would also have a far-reaching social scope: agreement on total settlement payments, together with three months of additional wages for each worker; recognition of school scholarships for the 2019 academic year and the issuance of school supply kits; and payment of dues so as to ensure pensions for workers who were due to retire in 2019. In addition, workers were encouraged to form a productive organization, which was set up on 16 March 2019 with the support of the MTSS under the cooperative system, called COOPESITRACO RL. Some 124 former workers of the enterprise took part in the meeting to establish the cooperative, which was registered on 3 April 2019. The enterprise undertook to provide free workshop and office facilities free of charge to a state institution to enable COOPESITRACO RL to provide services such as maintenance and repair of containers to various enterprises in the area; and (v) all the commitments were satisfactorily met for all the former workers, including for the SINTRASTAFCOR and SINTRAGA union leaders, who were also paid seven additional months of wages, which made a total settlement payment of ten months of additional wages.
3. 241. Enterprise A states that the former workers referred a socio-economic collective dispute to the Labour Court of the First Circuit of the Atlantic Region, Limón, on 24 January 2019 (File No. 19-000071-0679-LA), under the agreements reached on 28 January, (paragraphs 8 and 12 of the special minutes). However, the workers’ representatives who represented the workers in question at the conciliation meeting agreed to withdraw the proceedings because a settlement had been reached. The enterprise also states that SINTRASTAFCOR and COOPESITRACO RL expressed their uneasiness over, and disagreement with, the filing of this complaint.
4. 242. For its part, the Government reports that, on 28 January 2019, the above-mentioned court flatly rejected the socio-economic collective dispute, as it involved a complete closure of the work site and not an employer’s work stoppage or lockout. The Government also indicates that the National Directorate and General Labour Inspectorate have no record of any complaint against enterprise A. The Government gives details of the conciliation hearings that took place on 24 and 28 January 2019 at the offices of the Alternative Dispute Resolution Unit in Limón and mentions each of the points of the agreement reached by the parties on 28 January, highlighting that: (i) the enterprise, the workers and the ministry undertook to issue a press release, indicating that an agreement satisfactory to both parties had been reached, which was indeed issued; (ii) the union accepted and acknowledged that the agreement was binding for the enterprise’s unions and workers, including SINTRASTAFCOR union leaders; (iii) the union undertook to withdraw the collective dispute proceedings brought before the courts; and (iv) the union would inform workers and former workers of the agreement in order to ensure social peace between the parties, and the Ministry of Labour agreed to keep channels of communication and dialogue open on employment-related matters in the Limón area, and to set up a social dialogue table for the private sector in order to promote employability initiatives.
5. 243. Regarding the collective agreement signed between enterprise A and SINTRASTAFCOR, the Government indicates that, according to File No. 913 held by the Department of Labour Relations, this was approved by Decision No. DAL-DRT-OF-515-2018 of 9 October 2018 and there is no document indicating that the collective agreement has been revoked. The Government also indicates that on 20 August 2019, an ex officio investigation was carried out in order to determine whether the company had dismissed workers protected by trade union immunity without having previously requested authorization. The Government indicates that this investigation could not be carried out because the work site was closed and that in any case there had been a tripartite negotiation between the union, the company and the Ministry, which resulted in the signing of the agreement of 28 January 2019.
6. 244. Regarding enterprise B, the enterprise indicates that: (i) the closure of operations was conducted in compliance with a public works concession contract involving logistics operations nationally; (ii) the dismissal of workers was for objective reasons, given that there had been a complete closure of operations; (iii) on 3 March 2019, all workers and SINTRACOBAL were notified of the regrettable closure of operations as of 4 March, which led to the dismissal of 172 workers (not 300 workers as claimed by the complainants); (iv) the dismissal only became effective on 27 March because union representatives had filed a socio-economic collective dispute with the MTSS, which had the immediate effect of suspending labour relations; and (v) the enterprise and the Government indicate that, although a series of conciliation hearings were held on 13, 14, 25 and 27 March, at which the conciliation tribunal put forward proposals with a view to the parties reaching satisfactory agreements by mutual consent, the parties were unable to reach agreement and conciliation efforts were therefore terminated on 27 March 2019, with the dismissals taking place as of that date.
7. 245. The enterprise denies outsourcing all the services provided at the site and emphasizes that it was public knowledge that the services previously provided at the site had been taken over by the multinational port company that has the public works concession for the design, financing, construction, operation and maintenance of the container terminal in Moín, Limón province. The enterprise claims to have complied with all of its obligations, including the payment of the compensation referred to in article 99 of the collective agreement (an article that provided for the possible complete closure of operations, as well as compensation in addition to that provided for in the Labour Code). Regarding access to the union office, the enterprise indicates that it had informed the workers and SINTRACOBAL that, if they needed to enter the facilities, for security reasons they should coordinate with human resources staff. It notes that, in any case, union representatives entered the offices on 5 May and removed the property, including the vehicle that was still there.
8. 246. The Government indicates that, on 9 March 2019, SINTRACOBAL applied to the Labour Court of the First Judicial Circuit of the Atlantic Zone, Limón, for the lockout imposed by enterprise B to be declared illegal (File No. 19-000250-0679-LA). The Government indicates that the ruling determined that it was a complete closure of the work site and not a temporary closure or lockout. It further indicates that, on 12 March 2019, an appeal was filed against the ruling and that the Civil and Labour Court of Appeal of the Atlantic Zone, Limón branch, upheld the first-instance ruling through ruling No. 2019-144 of 16 May 2019.
9. 247. Regarding the collective agreement signed between the enterprise and SINTRACOBAL, the Government indicates that it was approved by Decision No. DAL DRT OF-535-2018 of 30 October 2018 and that there is no record of any document showing that the collective agreement has been revoked. The Government also indicates that three administrative proceedings involving the enterprise are pending with the Office of the Labour Inspectorate of Limón: (i) a complaint filed on 6 March 2019 by SINTRACOBAL for alleged unfair labour practices and trade union persecution, as a result of which a labour inspection was carried out immediately at the work site, which confirmed that the work site was closed; on 24 September 2021, it was noted that an appeal for review filed by the enterprise in April 2019 against the inspection report had not been resolved and, therefore, the inspector in charge decided that the appeal would be resolved as soon as it would be possible to enter the work site, (ii) a complaint filed on 2 April 2019 relating to the illegal dismissal of a pregnant worker. Although the court of first instance ordered the enterprise to revoke the dismissal of the worker, an application for judicial review was filed and, in the labour inspector’s report dated 20 May 2019, it was concluded that there had been no discriminatory dismissal on the grounds of pregnancy given that all staff at the work site had been dismissed due to the enterprise’s financial situation (the Government indicates that on 8 November 2019, the file was ordered to be definitively closed); and (iii) a letter submitted on 9 April 2019 to the Inspection Department of the Limón office, in which the enterprise notified the dismissals carried out on 27 March, which included persons protected by special immunity. Regarding the latter, the Government indicates that an investigation was opened, which found that the enterprise had not followed the procedure for authorizing the dismissal of workers protected by trade union immunity provided for in the Labour Code and the Labour Inspectorate’s manual of legal procedures. Therefore, on 7 August 2019, the inspectors were instructed to verify whether the employer’s action had been based on an objective decision (definitive closure of the work site) and whether there were any discriminatory motives. The Government indicates that on 29 September 2021 a visit to the work site was carried out and it was corroborated that it had been closed since 4 March 2019.The Government emphasizes that the actions of the MTSS have always been in strict compliance with the legal framework and that the ministry did not authorize any of the dismissals of the workers protected by trade union immunity.

C. The Committee’s conclusions

1. 248. The Committee notes that, in the present case, the complainants allege that in early 2019 enterprises A and B closed the port operation work sites located in the province of Limón and that in this context the mass dismissals of workers and trade union representatives were carried out without following established procedures, and that the collective agreements in force at these work sites were revoked. They also allege that the MTSS has had a lax approach to the above-mentioned facts.
2. 249. The Committee notes from the documents attached by the complainants and from the Government’s reply that the closure of enterprise A’s work site took place on 24 January 2019. Furthermore, the Committee regrets to note that, according to the allegations and the enterprises’ responses, the closure of both work sites took place without giving prior notice to the workers and/or the trade unions: enterprise A closed the work site on 24 January and notified it on the same day, and enterprise B closed the work site on 4 March and notified it the day before.
3. 250. The Committee notes that the complainants and the enterprises agree that there was a complete closure of both work sites, affecting all workers; in other words, not only union members. They also seem to agree that the closure of the work sites was related to the opening of the new container terminal in Moín, in the province of Limón, operated by a multinational port company with the public works concession for the design, financing, construction, operation and maintenance of the terminal. While the complainants also allege that the purpose of the closure of the work sites and the dismissals was to outsource the work, the Committee notes that, according to enterprise B, it was public knowledge that the services previously carried out there had been taken over by the multinational port company mentioned above.
4. 251. The Committee notes that both the complainants and the Government indicate that: (i) the former workers of both work sites applied to the courts for the lockout imposed by the enterprise to be declared illegal (the complainants consider that no provision is made in the Labour Code for any mechanisms, other than illegal work stoppages, to oppose mass dismissals); and (ii) both proceedings were rejected in both first and second instance on the grounds that what had occurred was a complete closure of the work sites, the termination of the employment contract by the employer and not a temporary closure or stoppage of work.
5. 252. The Committee also notes that the Government provides detailed information concerning conciliation meetings that allegedly took place after the closure of both work sites. In the case of enterprise A, the Government indicates that, on 24 and 28 January 2019, conciliation meetings were held at the regional headquarters of the MTSS in Limón between the enterprise, SINTRASTAFCOR, CTRN and FENTRAGH and that on the 28 January they reached an agreement in which the enterprise undertook to take steps not only of a financial nature, such as providing compensation and benefits, but that would also have a far-reaching social scope, such as the establishment of a cooperative, formed with 124 of the former workers, providing services at the container terminal. The Government also indicates that the parties agreed that the union would inform the former workers of the agreement in order to ensure social peace; that the union undertook to withdraw the court proceedings; and that the union and the MTSS undertook to maintain channels of communication and dialogue open on employment-related matters in the Limón area, and to set up a dialogue table for the private sector in order to promote employability initiatives. The Committee also notes that, according to the Government, SINTRASTAFCOR and the cooperative expressed their uneasiness over, and disagreement with, the filing of the present complaint.
6. 253. With regard to enterprise B, the Committee notes that, according to the Government, although conciliation hearings were held on 13, 14, 25 and 27 March and the MTSS had sought the best channels of dialogue between the parties, the conciliation was terminated on 27 March 2019. The Committee also notes that the Government indicates that: (i) the dismissals, carried out on 27 March, were notified by the enterprise to the Limón Inspection Department on 9 April 2019; (ii) given that the dismissals included members of the trade union’s executive committee and representatives, an investigation was ordered; and (iii) the inspection report concluded that the enterprise had not followed the procedure for authorizing the dismissal of the workers provided for in the Labour Code and the Labour Inspectorate’s manual of legal procedures, and on 7 August 2019 the inspectors were instructed to verify whether the employer’s action had been based on an objective decision (definitive closure of the work site) and whether there were any discriminatory motives. The Committee notes that, as indicated by the Government, on 29 September 2021 a visit to the work site was carried out and it was corroborated that it had been closed since 4 March 2019. The Commitee also notes that the above-mentioned court proceedings found that it was a complete closure of the work site.
7. 254. Regarding the allegation that enterprise B did not allow the trade union access to its premises, where it had furniture and fittings, documents and a vehicle belonging to it, the Committee notes that, according to the enterprise, it had informed SINTRACOBAL that access to the premises had to be coordinated with the human resources staff and that, in any case, on 5 May union representatives entered the offices and removed the property, including the vehicle they were keeping there.
8. 255. With regard to the allegation that both enterprises revoked the collective agreements signed with the respective trade unions, the Committee notes that, according to the Government, there is no indication in any document that the collective agreements have been revoked. It also notes that, according to enterprise B, it has complied with all its obligations, including the payment of the compensation referred to in article 99 of the collective agreement (an article which provided for the possible complete closure of the work site, as well as compensation in addition to that provided for in the Labour Code).
9. 256. Recalling the importance that the Committee attaches to the promotion of dialogue and consultations on matters of mutual interest between the public authorities and the most representative occupational organizations of the sector involved, and to governments consulting with trade union organizations to discuss the consequences of restructuring programmes on the employment and working conditions of employees [see Compilation of decisions of the Committee on Freedom of Association, sixth edition, 2018, paras 1523 and 1555], the Committee trusts that the dialogue table to be set up under the above-mentioned conciliation agreement of 28 January 2019 will finally be established and that it will help to keep the channels of communication and dialogue open between all parties concerned on employment-related matters in the Limón area.

The Committee’s recommendation

1. 257. Trusting that the aforementioned dialogue table is set up, and in light of its foregoing conclusions, the Committee invites the Governing Body to decide that this case does not require any further examination.