Definitive Report - Report No 396, October 2021

Case No 3361 (Chile) - Complaint date: 05-FEB-19 - Closed

Allegations: Anti-union discrimination in a collective bargaining process by rejecting as illegal the complainant organization’s decision to end a strike and accept the employer’s final offer

1. 173. The complaint is contained in communications dated February 2019 (received 28 March 2019) and 7 February 2020 from the Lan Express Cabin Crew Union – LATAM Chile (STCLE), supported by the International Transport Workers’ Federation (ITF) and the Single Central Organization of Workers of Chile (CUT).
2. 174. The Government sent its observations in communications dated 12 March and 3 August 2021.
3. 175. 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. 176. The complainant alleges that, in a collective bargaining process, Transporte Aéreo SA or Lan Express (hereinafter the enterprise) was guilty of anti-union discrimination by rejecting as illegal the complainant’s decision to end a strike and to accept the enterprise’s final offer.
2. 177. The complainant states that: (i) on 14 February 2018, the STCLE launched a collective bargaining process, with the enterprise giving its response on 24 February 2018; (ii) a legal dispute arose over a clause in the contract – which the enterprise wanted to remove – establishing that any worker who joins the union will become a beneficiary of the collective instrument, a dispute in which the Labour Directorate and the courts ruled in favour of the union; (iii) round table negotiations began, which were unsuccessful and, after the deadlines had passed, the enterprise made its final offer on 23 March 2018 (an offer that was neither withdrawn nor revoked by the enterprise); (iv) after unsuccessful mediation by the labour inspectorate, the strike began on 10 April 2018; (v) at that stage the enterprise made a new offer, which was not accepted by the union’s assembly; (vi) on 23 April 2018, the enterprise began a campaign to encourage the striking workers to halt their action, with the aim of breaking up the union and excluding them from the bargaining process; (vii) against this background, the enterprise refused to meet with the union’s negotiating committee and only undertook to promote the individual reinstatement of workers; (viii) given the time that had elapsed and the intransigence of the enterprise, the STCLE’s assembly decided to accept the enterprise’s final offer and end the strike – the enterprise and the labour inspectorate were informed of this on 25 April 2018; (ix) on 26 April the enterprise issued a statement indicating that “unfortunately the way in which the union reportedly ended the strike does not comply with current legislation, which is why the enterprise is consulting with the Labour Directorate to obtain a ruling on the legality of the union’s actions” and specifying that, in the meantime, the enterprise could not consider the strike to be over; (x) the head of the Labour Directorate, in response to the enterprise’s request, summoned the parties on 27 April and informed the union that the enterprise’s submission would be forwarded so that it could give its opinion; (xi) however, without waiting to hear the union’s arguments, in the afternoon of the same day official communication No. 2044 was issued on 27 April 2018, signed by the head of the Labour Directorate’s legal department, which stated that, as the union’s assembly had rejected the enterprise’s final offer, the union had not complied with the requirement to end the strike and consequently its action was illegal and the strike should be considered as still ongoing. This administrative decision underscored that, under the Labour Code, the main legal modalities for ending regulated collective bargaining are the signing of the collective agreement by both parties and the right to each worker’s individual reinstatement during the strike under the terms and conditions of the employer’s final offer; and (xii) through this action, the administrative authority, in failing to respect due process, interfered in collective bargaining, by ruling that, although the union had decided to end the strike, the strike continued (which, the complainant asserts, was in the enterprise’s interest).
3. 178. The complainant indicates that the administrative authority’s ruling forced the union to bring the case before the courts: (i) proceedings for constitutional protection (amparo) were filed against the Labour Directorate (which was rejected by the Court of Appeal on 4 July 2018, a decision upheld by the Supreme Court, on a matter of form – it was considered that the protection should be given by the labour judge); (ii) in this regard, an application was filed for a labour judge to rule on the legality of the decision to end the strike and sign the enterprise’s final offer and, on 25 September 2018, the First Chamber of the Santiago Labour Court rejected the application, carrying out a grammatical analysis of the legislation, considering that there was no express rule authorizing a union to accept the enterprise’s final offer once the strike was approved – this ruling was subject to an appeal for annulment before the Santiago Court of Appeal; and (iii) in these circumstances, the contested administrative act remained in force, meaning that the strike could not be ended (the union instructed the unionized workers to return to work in order to avoid serious financial losses. However, three union leaders have remained on strike, without pay (for nine months as of the date the complaint was filed), with a consequent loss of health coverage due to outstanding payments owed to the private insurance company, as well as problems in carrying out their union activities because the enterprise has made it difficult for them to access their usual workplaces to meet with union members.
4. 179. The complainant considers that the enterprise’s actions and the contested administrative decision hinder the collective bargaining process and effectively prevent the unions from exercising their right to strike. It considers that these are discriminatory anti-union acts that favour individual bargaining (for a small group of workers because they stopped striking earlier and for whom, in the enterprise’s view, the final offer had not expired) over collective bargaining (the enterprise did not allow the union to accept the final offer, nor did it offer the terms and conditions of the offer to the unionized workers who ended the strike later). The complainant therefore considers that the authority’s actions in support of the enterprise’s position ran counter to the State’s obligation to encourage collective bargaining. The complainant requests that its right to oppose the end of the strike be recognized, that the alleged actions be determined as anti-union practices, and that the three union leaders who were forced to remain on strike be reinstated and receive their unpaid wages.

B. The Government’s reply

1. 180. In a communication dated 12 March 2021, the Government sent in response the observations of the head of the Labour Directorate, who indicates that: (i) the complaint is related to an application for a declaratory judgment filed by the complainant against the enterprise in order to determine that the end of the strike called by the union on 25 April 2018 was legal; (ii) the First Chamber of the Santiago Labour Court rejected the application when hearing the case; (iii) however, on 2 July 2019, the Santiago Court of Appeal annulled the contested ruling and issued a replacement ruling accepting the application; (iv) subsequently, the enterprise filed an appeal for unification of jurisprudence on 19 July 2019 before the Supreme Court; (v) these proceedings were suspended due to the filing of an application for unconstitutionality of sections 357 and 258 of the Labour Code – an action that was rejected by the Constitutional Court in a ruling dated 2 March 2020; and (vi) the suspended proceedings were resumed, and on 27 April 2020, the Supreme Court issued a ruling declaring the appeal for unification of jurisprudence filed by the enterprise inadmissible. It should also be noted that the Labour Directorate was not a party to the aforementioned legal proceedings.
2. 181. The Court of Appeal’s ruling, which therefore resolved the matter, ruled in favour of the complainant union and established that: (i) the end of the strike agreed by the union on 25 April 2018 is legal; and (ii) the employer’s final offer was in force at the time it was signed by the complainant union, meaning that it constitutes the collective instrument applicable to the parties between 1 April 2018 and 31 March 2021. This means that it is also applicable to the workers who were reinstated individually (stopped striking), given that, as a result, such reinstatement was not in accordance with the law. The Court of Appeal noted that it can only be concluded that, as strike action is a legal remedy available to workers, the sole holder of this right is, in this case, the union. The decision to end the strike and return to work therefore always falls to the union. The Court also concluded that it can be considered that existing legislation (Act No. 20.940) grants unions the exercise of the right to strike and what that entails, including ending a strike under the regulated procedure. The Court also considered in its opinion that the entire collective bargaining process relies on the contracting parties acting in good faith and that the bedrock of this type of procedure presupposes that its participants avoid any conduct that would hinder their mutual understanding, with a view to a fair and peaceful solution. Against this background, the Court considered that collective autonomy should prevail. Such autonomy was evident in the employer’s proposal (final offer), which cannot be deemed to have precluded or lost its validity, given that the workers who decided to return to work individually adhered to its terms and conditions and the workers’ negotiating committee expressed their agreement to them in order to end the strike. The Court of Appeal found that concluding the collective process through such agreement was consistent with an interpretation underpinning the collective agreement as an expression of freedom of association and that the concurrence of wills over the final offer was conducive to the resolution of the dispute and reinforced union and collective autonomy.
3. 182. By means of a communicatin dated 3 August 2021, the Governement indicates that the main issue that gave rise to the complaint has been resolved within the framework of the country’s institutions and that it has no additional information to add.

C. The Committee’s conclusions

1. 183. The Committee notes that the complainant alleges that, in a collective bargaining process, the enterprise was guilty of anti-union discrimination by rejecting as illegal the complainant’s decision to end a strike and to accept the enterprise’s final offer. The complainant claims that the union’s right to end the strike should be recognized, and that the three union leaders who remained on strike following the enterprise’s rejection should be reinstated and their lost wages paid.
2. 184. The Committee notes that, following the filing of the complaint, the courts of law ruled on the case in favour of the complainant union, finding that: (i) the ending of the strike agreed by the union on 25 April 2018 was legal; and (ii) the employer’s final offer was in force at the time it was signed by the complainant union, so that it constitutes the applicable collective instrument.
3. 185. The Committee notes that, in ruling on the issue, the deciding court – the Court of Appeal – found that, as strike action is a legal remedy available to workers, the sole holder of this right is, in this case, the trade union. The decision to end the strike and return to work therefore always falls to the union. The Committee also notes that the Court of Appeal also found that concluding the collective process through such agreement was consistent with an interpretation underpinning the collective agreement as an expression of freedom of association and that the concurrence of wills over the final offer was conducive to the resolution of the dispute and reinforced union and collective autonomy.
4. 186. The Committee takes due note of the of the Court of Appeal’s ruling and notes that the right of workers’ organizations to organize their activities must include the possibility of deciding to end collective actions that they have initiated.
5. 187. Furthermore, the Committee notes that the information provided does not specify whether the three union leaders who remained on strike following the enterprise’s decision not to accept the end of the strike by the trade union had been reinstated and whether the wages they had not been paid had been reimbursed. The Committee trusts that this was the case.
   • The Committee’s recommendations
6. 188. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • (a) The Committee trusts that the three union leaders who had remained on strike following the enterprise’s decision not to accept the end of the strike by the trade union were reinstated and the wages they had not been paid were reimbursed.
   • (b) The Committee considers that this case does not call for further examination and is closed.