Definitive Report - Report No 397, March 2022

Case No 3365 (Costa Rica) - Complaint date: 18-MAR-19 - Closed

Allegations: The complainants allege the non-observance of the collective agreement in force in a public enterprise

1. 308. The complaint is contained in a communication dated 18 March 2019 from the Workers’ Union of the Atlantic Coast Port Administration and Economic Development Board (JAPDEVA) (SINTRAJAP) and the Confederation of Workers Rerum Novarum (CTRN).
2. 309. The Government sent its observations in communications dated 19 December 2019 and 22 June 2020.
3. 310. Costa Rica 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. 311. In their communication dated 18 March 2019, SINTRAJAP and the CTRN state that the public port enterprise the Atlantic Coast Port Administration and Economic Development Board (JAPDEVA) (hereinafter “the enterprise”) signed a collective agreement with SINTRAJAP for the period 2016–2018 and allege that agreement remains in force given that article 147 of the agreement provides for its automatic extension until such time as a new agreement has been negotiated.
2. 312. The complainants allege that in 2011 the enterprise granted a concession to administer and operate the construction of port works to the transnational company APM Terminals (hereinafter “the transnational company”), transferring to it the entirety of its container loading operation. The complainants allege that act violated article 136 of the collective agreement, which provides as follows:
   • Article 136. Use of JAPDEVA equipment
   • JAPDEVA guarantees that no equipment or staff belonging to a private company or other institution shall be used to replace its workers or to erode their right to work and the provisions of this collective agreement. Where JAPDEVA does not possess the necessary equipment and must use equipment belonging to companies outside the institution, that equipment must be operated by JAPDEVA staff, unless, owing to its nature, there is insufficient supply of the required equipment on the market and/or the owner requires that its own staff remain responsible for the equipment owing to the need for it to be operated by specialists, in which case SINTRAJAP states explicitly that said staff shall be able to operate the equipment continuously and without hindrance, in accordance with the provisions of this article.
   • It is understood that JAPDEVA shall take all the necessary steps to acquire the appropriate resources to carry out its functions and to provide adequate training to the staff required owing to the modernization of port equipment.
   • Should the port and development operations be wholly or partially handed over to another State or private entity, the workers covered by this agreement shall continue to enjoy all the rights set out herein, in accordance with the provisions of article 37 of the Labour Code. These rights must be respected and guaranteed by the new employer in a document that it shall sign with SINTRAJAP prior to the change of owner with effect from its entry into force.
   • Should the institution intend, at any point, to transfer services that it currently provides to private enterprise and to other Government departments, it shall notify the trade union in advance and shall negotiate each specific case or project with SINTRAJAP, in accordance with article 3 of this agreement.
3. 313. The complainants allege that there was a deliberate non-observance of article 136, despite the calls and action taken by SINTRAJAP to ensure respect for the collective agreement, because the enterprise transferred the aforementioned services to the transnational company without having involved SINTRAJAP in determining the fate of the jobs as set out in the aforementioned article, instead adopting unilateral measures that entail dismissals, employment freezes, restructuring and arbitrary transfers, with the total exclusion of the trade union from the process. The complainants state that SINTRAJAP lodged a judicial complaint in this regard. According to the documents submitted by the complainants, on 10 August 2018, as part of file No. 18-000657-0679-LA, the Labour Court of the First Judicial Circuit of the Atlantic Zone granted the injunctive relief requested by the trade union and ordered the immediate suspension of all dismissals while the proceedings were ongoing.

B. The Government’s reply

1. 314. In its communications dated 19 December 2019 and 22 June 2020, the Government transmits its observations, as well as those of the enterprise, which was established in 1963 as an autonomous State body responsible for the construction, administration, maintenance and operation of the port of Limón and other sea and river ports on the Atlantic coast. The enterprise states that (i) in 2007, the Office of the Comptroller-General of the Republic authorized the contracting of an international consultant to draw up a master plan for the Limón-Moín port complex and an evaluation of the dredging of channels in the north and the dredging equipment necessary for the maintenance of the navigation channels; (ii) in 2008 the consultant submitted the final report on the master plan which recommended several measures, such as an increase to infrastructure capacity and preparations for the concession and construction of a new container port terminal and the transfer of container loading and unloading port services to a private concession-holder; and (iii) in 2009 an international public tender notice was published, and on 1 March 2011, based on the General Act on the Concession of Public Works with Public Services, the executive authority, comprising the President of the Republic, the Minister of Public Works and Transport and the Minister of Finance, awarded the concession to fund, design, construct, operate and maintain a new container terminal at Moín for a period of 33 years (agreement No. 018 MOPT-H).
2. 315. In relation to the alleged violation of article 136 of the agreement, the enterprise states that (i) the 2016–2018 collective agreement remains in force; (ii) although the agreement has the force of law for the parties to it and imposes obligations on the enterprise when it acts unilaterally, that is, when its decisions and actions are within its exclusive competence, the movement of port freight, in this case as part of a concession, is an administrative matter that is not within the exclusive competence of the enterprise, but falls under the authority of central Government, which cannot be limited by the provisions of an agreement; (iii) there is a distinction between the body that signed the collective agreement (the enterprise) and those that make up the authority that granted the concession: the executive authority (the President of the Republic, the Minister of Public Works and Transport and the Minister of Finance), the National Concessions Council and the enterprise; and (iv) the collective agreement is subject to the provisions of laws on public order, particularly in relation to the supreme power of the State and property in the public domain, which is subject to the principles of legal reservation.
3. 316. The enterprise states that there are three court cases before the Labour Court of the First Judicial Circuit of the Atlantic Zone that aim to rule on the violation of article 136 of the collective agreement, the invalidity of the public work concession contract and, if that contract is not annulled, on compensation for the damages occasioned to the workers (case Nos. 15-002232-1027-CA, 19-000459-679-LA and 18-000657-0679-LA).
4. 317. In that regard, the Government transmits the following information that it received from the Supreme Court of Justice: (i) case No. 15-002232-1027-CA: administrative proceedings brought by SINTRAJAP against the transnational company in which it was argued that the concession would affect more than 1,000 jobs in the enterprise and a request was made for the concession contract to be ruled invalid; (ii) case No. 19-000459-0679-LA: complaint of the non-observance of article 136 of the collective agreement submitted on 22 May 2019; that case was underway and the assessor would be appointed; and (iii) case No. 18-000657-0679-LA: ordinary labour proceedings brought by SINTRAJAP against the enterprise on 31 July 2018. On 21 February 2019 that body was deemed incompetent to rule on the case and it was ordered that the case be referred to the Court of Appeal for Administrative and Civil Property Cases of the Second Judicial Circuit of San José. However, that decision was appealed and the case was sent to the Civil and Labour Court of Appeal of the Atlantic Zone. On 19 July 2019 the Labour Court of Limón referred the case to the First Chamber of the Supreme Court of Justice to rule on which court was competent to hear the case.
5. 318. With regard to the alleged restructuring, dismissals and arbitrary and unilateral transfers, the Government considers it important to highlight the effort made with the primary objective of protecting the labour rights of the enterprise’s workers. The Government states that prior to the presentation to the legislative authorities of bill no. 21426 on the transformation of the enterprise and the protection of its workers, which today is known as Act No. 9764 of 15 October 2019, the Government held negotiations with SINTRAJAP which led to the concluding of agreements that benefited both the enterprise and the workers. The Government states that there was an understanding between the parties that the process would be undertaken in a climate of industrial peace and openness in order to reach an agreement that benefited the enterprise’s workers and notes that those negotiations began in 2008. There was therefore no unilateral decision-making on the part of the Government; on the contrary, the sectors involved participated actively throughout the process.
6. 319. The Government states that, as provided for in article 1 of Act No. 9764, the enterprise was required to execute its administrative, financial and operational reorganization to ensure its financial equilibrium and sustainability and that its objectives were met. The Act empowers the enterprise to determine the administrative and operational structure that best enables it to operate correctly and to undertake technical studies and the necessary actions to retain only those workers that it requires to ensure its short- and long-term continuation and financial equilibrium.
7. 320. The Government states that the measures provided for in the Act include the transfer of employees to other State bodies, the granting of incentives in addition to payment for services to the enterprise’s workers who accept voluntary redundancy, and a special early retirement scheme. Workers had one month from the publication of the Act to select and formally request one of the aforementioned options. Once that period had expired, the enterprise was required to commence the staff dismissals necessary to reach financial equilibrium.
8. 321. The Government states that the bill that became Act No. 9764 was reviewed by the Constitutional Chamber of the Supreme Court of Justice via Vote No. 2019-018505, issued on 24 September 2019, by virtue of a discretionary legislative consultation. It states that, on the two matters consulted, the Court ruled that the bill did not contain unconstitutional flaws. The Government highlights that it prioritized the protection of the labour rights of the enterprise’s workers and that those rights were upheld within the legal framework in force.
9. 322. For its part, the enterprise highlights that throughout its transformation process there was a process of dialogue that involved the Government authorities, including the Ministry of Labour and Social Security, and the workers’ representatives, which include SINTRAJAP. The enterprise states that over the last 12 years, it has undertaken four studies and proposals to amend its organizational structure. It notes that the latest reorganization programme was presented in March 2019, prior to the financial crisis that it is currently facing. The enterprise states that work on that reorganization proposal was undertaken with representatives of its different departments using inputs from previous studies. It adds that the reorganization proposal was shared with SINTRAJAP through official communication No. PE-184-2019 of 10 July 2019. It also states that the enterprise’s directors met with SINTRAJAP on various occasions to discuss the transformation process, and that the enterprise received observations from the trade union representatives, which were addressed.
10. 323. The enterprise states that, in accordance with the provisions of Act No. 9764, and recognizing the importance of information, and the workers’ right to that information, during its transformation process, a number of communication channels were established through which information was provided on the process and the questions posed by the workers and their representatives to the administration were answered, thereby rendering the process entirely transparent and clear. The enterprise highlights that meetings were held with the trade union representatives, who continually submitted queries on the legislation to the management, and that meetings were held between SINTRAJAP, the management of the enterprise and representatives of the Ministry of Labour and Social Security so that their questions on points of interpretation or differences of opinion between the parties could be addressed. It also highlights the high value of inter-agency coordination during this stage, and that, additionally, several informative guides were distributed that detailed the different steps that would be taken in the enterprise’s transformation process.

C. The Committee’s conclusions

1. 324. The Committee observes that the case concerns the alleged non-observance of a collective agreement by a public enterprise in the port sector. The Committee takes note of the complainants’ allegations that (i) the enterprise granted a concession to construct, administer and operate a new port terminal to the transnational company, transferring to it the entirety of its container loading operation, and (ii) that act was undertaken in violation of article 136 of the collective agreement because the enterprise did not involve SINTRAJAP in resolving the fate of the jobs as set out in that article, adopting measures that entailed dismissals, restructuring and arbitrary transfers.
2. 325. The Committee notes that, in that regard, the enterprise states that although the 2016–2018 collective agreement is in force and imposes obligations on the enterprise when its decisions and actions are within its exclusive competence, it is not true that it was the enterprise that granted the concession, but the awarding authority comprising the executive authority (the President of the Republic, the Minister of Public Works and Transport and the Minister of Finance), the National Concessions Council and the enterprise. The Committee also notes that the Government and the enterprise state that (i) in 2007, the Office of the Comptroller-General of the Republic authorized the contracting of a consultancy to draw up a master plan for the port complex; (ii) in 2008 an international consultant recommended that the enterprise adopt measures including the construction of a new container terminal and the transfer of container loading and unloading port services to a private concession-holder; (iii) in 2009 a public tender notice was published, and in 2011 the executive authority awarded the concession to design, fund, construct, operate and maintain the Moín container terminal to the transnational company for 33 years; (iv) in 2019 Act No. 9764 on the transformation of the enterprise and the protection of its workers was adopted and, prior to the presentation of the bill, the Government held negotiations with SINTRAJAP and reached agreements that benefited both the enterprise and the workers, and there was an understanding to undertake the process in a climate of industrial peace (the Government states that those negotiations began in 2008); and (v) during the transformation process, meetings were held between the enterprise, Government authorities and workers’ representatives, including SINTRAJAP, to which the reorganization programme was communicated in advance.
3. 326. The Committee observes that in the concession contract signed in 2011, it was agreed that the transnational company would construct a new container terminal and that the entirety of the container loading and unloading port services would be transferred to it. The Committee understands, according to publicly available information, that the construction of the container terminal began in 2015 and that the terminal has been operational since February 2019. The Committee observes that the complainants allege that the enterprise failed to observe the collective agreement because it did not inform, or consult with, SINTRAJAP with regard to the fate of the jobs that would be affected by the operationalization of the terminal. The Committee understands that the operationalization of the terminal and the transfer of the entirety of the container loading and unloading services to the transnational company would lead to the transformation and restructuring of the enterprise.
4. 327. The Committee notes that under the provisions of the collective agreement, the enterprise was required to notify and negotiate with SINTRAJAP should it decide to transfer the services that it provided to a private enterprise, which is what occurred with the concession in question. While recalling that agreements should be binding on the parties and that mutual respect for the commitment undertaken in collective agreements is an important element of the right to bargain collectively and should be upheld in order to establish labour relations on stable and firm ground [see Compilation of decisions of the Committee on Freedom of Association, sixth edition, 2018, paras 1334 and 1336], the Committee observes that the documentation provided appears to indicate that there were instances of dialogue with SINTRAJAP with regard to the fate of the jobs and the restructuring of the enterprise: (i) a bulletin that SINTRAJAP shared with its members dated 24 August 2018 (No. 11-2018) states that on 18 July that year the trade union had its first meeting with the enterprise to begin analysis of the issues relating to the restructuring; (ii) in another bulletin dated 28 August 2018 (No. 12-2018) SINTRAJAP informs its members that it has met with the Minister of Labour and that round tables have been established to capture the interests of the workers who wish to transfer to other public institutions voluntarily; (iii) through official communication No. PE-184-2019 of 10 July 2019, the enterprise shared with SINTRAJAP a document entitled “Institutional Reorganization Programme”; (iv) the directors of the enterprise met with SINTRAJAP on 22 July 2019 and reiterated the importance of reviewing the document that had been communicated; (v) on 24 October 2019 the programme was discussed with the trade union; and (vi) the enterprise also maintains that it received observations from SINTRAJAP which were addressed at meetings of the commission tasked with implementing the restructuring; that there is a commitment to holding follow-up meetings and that, in the interim, the office of the enterprise’s chairperson has also received groups of workers, accompanied by SINTRAJAP, to hear their queries and contributions to the process.
5. 328. The Committee observes that six months after the complaint was lodged, Act No. 9764 on the transformation of the enterprise was adopted. The Committee observes that, according to the website of the Costa Rican judiciary, on 27 November 2019 SINTRAJAP filed legal action challenging the constitutionality of Act No. 9764 which was rejected by the Constitutional Chamber in a resolution dated 15 January 2020 that ruled that the dismissals provided for in the Act were not automatic and that they were based on the enterprise’s need to adopt measures to ensure financial equilibrium given the economic problems that it was facing. According to publicly available information, after the adoption of Act No. 9764, there were around 800 dismissals.
6. 329. The Committee notes that the complainants, the Government and the enterprise all mention three legal proceedings brought by SINTRAJAP in relation to the issues that are the subject of this complaint. The Committee observes that, although reference is made to the injunctive relief granted in favour of SINTRAJAP as part of one of the proceedings, copies of the rulings issued in relation to the proceedings have not been provided. Observing that, according to the website of the Costa Rican judiciary, those proceedings are still under way, the Committee trusts that the rulings will be issued as soon as possible.
7. 330. Lastly, observing that, according to publicly available information, in 2021 the enterprise and SINTRAJAP held meetings aiming to renegotiate the collective agreement, the Committee encourages the parties to continue that dialogue and to endeavour to reach agreement on the renegotiation of the collective agreement.

The Committee’s recommendations

1. 331. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee encourages the parties to continue their dialogue and to endeavour to reach agreement on the renegotiation of the collective agreement.
   • (b) The Committee considers that this case closed does not call for further examination and is closed.