Definitive Report - Report No 401, March 2023

Case No 3418 (Ecuador) - Complaint date: 05-JAN-22 - Closed

Allegations: The complainant organizations allege the violation of the right to collective bargaining of a public sector union, including failure to respect the applicable deadlines and procedures during the collective bargaining process and the shelving of a collective agreement concluded between the parties following the completion of the bargaining process

1. 413. This complaint is contained in a communication dated 5 January 2022 from the National Union of Professional Drivers and Workers of the Ministry of Government (previously the Ministry of the Interior) and the Ecuadorian Confederation of Free Trade Unions (CEOSL).
2. 414. The Government provided its observations in communications dated 3 January and 3 February 2023.
3. 415. Ecuador 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. 416. In their communication of 5 January 2022, the complainant organizations allege that the Government violated the right to freedom of association and collective bargaining of the National Union of Professional Drivers and Workers of the Ministry of Government. The complainant organizations maintain that, as a consequence of certain acts and omissions on the part of the public employer (the Ministry of Government), after the parties had participated in a collective bargaining process and concluded a collective agreement, the collective agreement was shelved for budgetary reasons, leaving the unions without the agreed rights and benefits.
2. 417. The complainant organizations indicate that the charter of the Union of Professional Drivers and Workers, a public sector union, was approved and registered by Ministerial Decree No. MDT-2018-0089 of 10 April 2018. They add that the union is affiliated to the CEOSL and has 217 affiliates throughout the country.
3. 418. The complainant organizations recall that, pursuant to section 221 of the Ecuadorian Labour Code, collective agreements are concluded in the public sector with “a single central committee made up of more than 50 per cent of these workers”. On 9 June 2018, the workers’ meeting of union members approved the formation of the Single Central Committee (CCU) of Workers of the Ministry of the Interior and authorized the union’s leadership to negotiate the collective agreement.
4. 419. The workers’ organizations indicate that, on 10 July 2018, through memorandum No. MDI-CGAF-DATH-2018-0757, the labour inspector of Pichincha was informed that the Ministry of Government and the union had agreed to postpone the first negotiations on the draft collective agreement and that the negotiations “would continue until the first week of August 2018”. Subsequently, on 11 July, the CCU presented a draft of the first collective agreement to the Labour Inspectorate, which informed the Ministry of Government of this fact on 13 July 2018.
5. 420. On 29 August 2018, the Mediation Office of the Ministry of Labour took note of the negotiation process of the collective agreement and summoned the parties to a social dialogue meeting on 6 September 2018. In its communication, the Mediation Office informed the parties that “there are deadlines that must be respected in accordance with Ministerial Agreement No. 0184 of 7 November 2013”.
6. 421. On 6 September 2018, the Mediation Office once again summoned the parties to a hearing to be held on 20 September 2018, once again noting that the deadlines must be respected. In this context, the complainant organizations point out that, pursuant to section 14 of the above-referenced mentioned ministerial agreement, and in line with section 224 of the Labour Code, the time taken to negotiate a collective agreement cannot exceed 30 days, unless this period is extended by agreement between the parties, which the complainant organizations indicate did not occur.
7. 422. The workers’ organizations indicate that the Ministry of Government and the CCU concluded the negotiations in respect of their first collective agreement on 29 March 2019, approving the entire final text of the collective agreement. They highlight that, once the negotiations were completed, pursuant to section 15 of Ministerial Agreement No. MDT-0184-2013, the Ministry of Government had a period of 48 hours (which ended on 2 April 2019) within which to submit the text of the collective agreement, the cost estimate tables and tables of funding sources to the Regional Directorate of Labour and Public Services of Quito. They maintain that this deadline was not respected and that the documents in question were not submitted until 7 June 2019 (more than three months after the deadline). The complainant organizations add that, at this time, the Ministry of Government submitted incomplete information to the Regional Directorate of Labour and Public Services of Quito, submitting only the text of the collective agreement, without the other required documentation.
8. 423. The complainant organizations indicate that, as a result, on 17 June 2019, the Ministry of Labour issued official communication No. MDT-DRTSPQ-2019-6004 requiring the employer (the Ministry of Government) to submit the necessary information and granting the employer an additional period of ten days for this purpose. On 18 July, the CCU requested the Regional Director of the Ministry of Labour in Quito to fine the Ministry of Government in conformity with section 16 of Ministerial Agreement No. MDT-0184-2013 for not having provided the necessary documents within the 48 hours following the approval of the text of the collective agreement.
9. 424. Subsequently, on 2 July 2019, the Ministry of Government requested that the Ministry of Labour grant it an extension of 15 days to provide the required documents. On 4 July the Ministry of Labour granted the Ministry of Government an extension until 25 July 2019, an additional deadline with which the Ministry of Government once again failed to comply.
10. 425. The complainant organizations indicate that, on 24 January 2020, the CCU requested the Regional Director of Labour and Public Services of Quito to continue with the process of signature of the collective agreement, and to require the employer to submit to the Ministry of Labour the information on the cost estimates and the sources of funding for the collective agreement to the Ministry of Labour. Subsequently, on 26 February 2020, the Ministry of Labour conveyed the required documents to the Ministry of Economy and Finance. On 30 September 2020, some seven months after the required information was sent to the Ministry of Economy and Finance, the Under-Secretary of Budget of the Ministry of Economy and Finance announced that the Ministry of Government did not have the necessary funding to cover all of the benefits agreed upon in the collective agreement. On 6 November 2020, the Regional Director of Labour and Public Services of the Ministry of Labour announced that, in response to the memorandum issued by the Ministry of Economy and Finance, the decision had been taken to shelve the draft collective agreement.
11. 426. The complainant organizations highlight that, as a consequence of the acts and omissions of the Ministry of Government, 20 months after the collective bargaining had been completed and the full text of the collective agreement had been approved and concluded, the draft collective agreement was shelved, leaving the workers without the agreed benefits. Subsequently, the union lodged a claim for the violation of their collective bargaining rights in the framework of the exercise of their freedom of association rights. The claim was rejected by the court of first instance on 3 February 2021 and by the appellate court on 17 August 2021.
12. 427. As it considered that the rulings of the court of first instance and the appellate court affected its constitutional rights, the union lodged a special appeal for protection with the Constitutional Court, which is still pending. The complainant organizations indicate that the National Union of Professional Drivers and Workers of the Ministry of Government still has not been able to sign the collective agreement approved by the parties in 2019. They add that, given the adverse consequences directed at the union, it has not presented a new draft collective agreement.
13. 428. Summarizing the acts and omissions of the public bodies that they consider violated the right to collective bargaining, the trade union organizations emphasise that the Ministry of Government did not comply with the procedure established in the Labour Code and in Ministerial Agreement No. MDT-0184-2013, and that it delayed the negotiation of the collective agreement beyond the established deadlines. They also indicate that, after having approved and concluded the full text of the collective agreement, the Ministry of Government did not submit the cost assessment tables and funding sources related to the collective agreement. They add that, at the end of the collective bargaining process, the Ministry of Economy and Finance issued a negative budget report which went against the agreement that the parties had reached 20 months previously. They also indicate that the Regional Directorate of the Ministry of Labour did not follow up on the complainant organizations’ request to fine the employer (the Ministry of Government), as provided for in the Ministerial Agreement. The complainant organizations state that, as a result of this decision, the Ministry of Labour shelved the collective agreement, despite there being no legal rule permitting this. The workers’ organizations allege that the systematic acts and omissions of the public sector bodies run counter to the principle of good faith bargaining and respect for agreements that are concluded. They add that collective bargaining has not been initiated to rectify the situation, a situation which has left the worker members of these organizations without the salary increases and other benefits agreed upon.

B. The Government’s reply

1. 429. In a communication received on 3 January 2023, the Government provided information concerning the actions of the Ministry of Labour and the Ministry of Economy and Finance in relation to the events that are the subject of the complaint. The Government transmitted additional information in a communication received on 3 February 2023.
2. 430. In its communications, the Government denies that the Ministry of Labour has in any way violated freedom of association and the right to collective bargaining, which are guaranteed under the country’s Constitution, or the provisions of Convention No. 87, pointing out that the collective bargaining agreement that is the subject of the complaint was only a draft. In this respect, the Government recognizes that the draft collective agreement constituted an expectation of a legitimate right for the workers. It nevertheless points out that, in order for the draft to be stamped and become final and enforceable, it is necessary to dispose of the economic resources necessary to its implementation.
3. 431. The Government considers that the complainant organizations’ right to submit a new request for a collective agreement to the Ministry of the Interior and the Ministry of Labour, respectively, have not been undermined and that the workers’ organizations can make use of this right when necessary. It adds that the Ministry of Labour makes available to all users the services of the Labour Mediation Office to all users at the national level to reach an agreement in the collective bargaining process, as well as the free advisory services provided by public servants, who can address, within the scope of their competencies, the questions that users might have regarding the processing, negotiation and conclusion of a collective agreement.
4. 432. The Government indicates that the Ministry of Labour, as the lead agency for labour policies, is required to comply with and enforce the law, and that, according to the provisions of section 74(17) of the Organic Code of Planning and Public Finance ,and in accordance with section 56 of the Law for the Reform of Public Finances, it falls to the Regional Directorate of Labour and Public Services of Quito to request a favourable opinion regarding the availability of budgetary resources prior to the conclusion of a collective agreement, in order to ensure that there are sufficient resources to cover the cost of the agreed economic benefits.
5. 433. The Government states that the Ministry of Labour makes available to users all the services offered by the Regional Directorate of Labour and Public Services of Quito so that they may negotiate their collective agreements within the established legal parameters. The Government adds that it is imperative that the Regional Directorate not exceed its powers by concluding a collective agreement that does not fulfil the legal requirements, but that both parties may continue negotiating a draft collective agreement with full access to and support of its services. The Government emphasizes that the regulations in force predate the negotiation of the collective agreement that is the subject of the complaint, and that the workers’ representatives should have been aware of the requirements for the signature of the agreement, for which a prior favourable opinion is required.
6. 434. In its analysis, the Government indicates that once the collective negotiations and the respective procedures were completed, by means of official communication No. MEF-SP-2020-0741 dated 30 September 2020, the Ministry of Economy and Finance concluded that the Ministry of Government “does not have the necessary funding to cover all the benefits agreed upon in the draft collective agreement”. The Government indicates hat the Ministry of Economy and Finance noted that “the draft is returned ... for the Ministry of Labour to ... update the name of the draft collective agreement, rectify the number of workers for whom it is being negotiated, since there are currently 131 workers and the draft mentions 153, and, lastly, to revise the date of entry into force of the draft collective agreement”.
7. 435. The Government also refers to official communication No. MDT-DRTSPQ-2020-7832 of 6 November 2020, in which the Regional Director of Labour and Public Services of Quito, “… in response to official communication MEF-SP-2020-0471 dated 30 September 2020, issued by the Ministry of Economy and Finance”, decided to shelve the file on the collective agreement after notifying the parties, “preserving the rights of the parties …”.
8. 436. In its communication dated 3 February 2023, the Government indicates that, following the decision to shelve the draft collective agreement on 6 November 2020, by means of a mediation agreement partially accepting of the Statement of Demands submitted by the National Union of Professional Drivers and Workers of the Ministry of Government, concluded on 27 August 2021, the parties reached agreement on 12 out of the 29 initial points. The Government states that these 12 points have been complied with in accordance with the labour legislation. The Government adds that the 17 remaining points from the initial Statement of Demands on which an agreement has not been reached are in the submission of evidence phase for subsequent decision by the members of the Conciliation and Arbitration Tribunal of the Ministry of Labour, established by the Minutes of the conciliation hearing held on 7 November 2022.
9. 437. During the evidentiary phase opened by the Conciliation and Arbitration Tribunal, the Ministry of the Government submitted a brief dated 15 November 2022, detailing and supporting the Ministry of Government’s legal and budgetary reasons for not reaching an agreement in respect of the union’s demands. In this context, the Government points out that the Ministry of Government has complied and continues to comply faithfully with the points agreed, in accordance with the regulations in force, and therefore at no time has it violated the rights of the workers, considering that there are points that have not been agreed upon because they contravene the legislation and exceed the budgetary amounts determined by the legal system in force.

C. The Committee’s conclusions

1. 438. The Committee notes that the present case refers to the shelving by the Ministry of Labour of a collective agreement concluded by a public sector union with the Ministry of Government, following an opinion issued by the Ministry of Economy and Finance concluding that the Ministry of Government did not have the sufficient resources to provide the agreed benefits.
2. 439. The Committee notes the complainant organizations’ allegations of the violations of the right to collective bargaining, which entail: (i) the failure of the Ministry of Government to comply with the deadlines and procedures established in the Labour Code and in Ministerial Agreement No. MDT-0184-2013, thus delaying the negotiation of the collective agreement; (ii) the failure of the Ministry of Government to submit, after the approval of the collective agreement by the parties, the cost estimate tables and tables of funding sources required by the Regional Directorate of the Ministry of Labour and Public Services of Quito, delaying the process even further; (iii) the failure of the Ministry of Labour to impose fines on the Ministry of Government for not respecting the applicable deadlines; (iv) the issuance by the Ministry of Economy and Finance of an opinion notifying the parties that the Ministry of Government did not have the necessary funding to cover all the benefits agreed upon in the collective agreement, although the negotiation and approval of the collective agreement had been completed 20 months previously; and (v) the subsequent shelving by the Ministry of Labour of the collective agreement concluded by the parties, even though there is no legal provision that provides for this. The Committee notes the complainant organizations’ allegation that the systematic acts and omissions of the public sector bodies described above run counter to the principles of negotiating in good faith and respecting the agreements reached.
3. 440. The Committee notes that, for its part, the Government states that the Ministry of Labour has at no time violated the right to freedom of association and the right to collective bargaining insofar as: (i) although the agreement reached between the parties led to an expectation of legitimate entitlements on the part of the workers, the collective agreement that was the subject of the complaint was only a draft; (ii) in accordance with the legislation applicable to the public administration, in order for the draft collective agreement to become final and enforceable, a favourable opinion from the Ministry of Economy and Finance was required confirming the availability of economic resources for its implementation; and (iii) in the light of the opinion issued by the Ministry of Economy and Finance, which concluded that the Ministry of Government did not have the necessary resources to comply with the agreed benefits, the decision of the Ministry of Labour to shelve the draft collective bargaining agreement was justified.
4. 441. The Committee notes that it is clear from the above-mentioned elements presented by the parties that: (i) the National Union of Professional Drivers and Workers of the Ministry of Government and the Ministry of Government entered into negotiations in July 2018 with a view to signing the first collective agreement in the institution; (ii) the parties agreed on the content of the collective agreement on 29 March 2019 and the related agreement was forwarded by the Ministry of Government to the Ministry of Labour; (iii) after a series of delays in the delivery by the Ministry of Government of various documents required under national legislation, the Ministry of Economy and Finance issued on 30 September 2020 an unfavourable opinion, finding that the Ministry of Government did not have the economic resources to finance the benefits agreed upon by the parties; and (iv) based on the foregoing, the Ministry of Labour shelved the respective file on 6 November 2020.
5. 442. The Committee notes that the complainant organizations denounce, on the one hand, the repeated delays allegedly incurred by the Ministry of Government throughout the process, which would demonstrate a lack of good faith in the negotiations and, on the other hand, the shelving of the collective agreement by the Ministry of Labour on the basis of an unfavourable opinion of the Ministry of Economy and Finance following the signature of the agreement by the parties. Lastly, the Committee notes that, while the complainant organizations consider that the agreement reached by the parties in March 2019 led to the signature of a collective agreement, the Government considers that, in the absence of a favourable opinion on the availability of funds to finance the agreed benefits, the agreement only constituted a draft collective agreement.
6. 443. With regard to the allegations of non-compliance by the Ministry of Government with the procedures and deadlines provided for by national legislation, especially the late submission of documents to the Ministry of Labour, the Committee notes that: (i) the Government’s response does not dispute these allegations; and (ii) as referred to by both parties, 20 months elapsed between the agreement reached by the parties and the shelving of the file by the Ministry of Labour. In this respect, the Committee recalls that the principle that both employers and trade unions should negotiate in good faith and make efforts to reach an agreement means that any unjustified delay in the holding of negotiations should be avoided [see Compilation of decisions of the Committee on Freedom of Association, sixth edition, 2018, para. 1330]. In light of the foregoing, the Committee requests the Government to take active measures to ensure effective compliance with legal deadlines by public institutions involved in collective bargaining processes.
7. 444. With respect to the shelving of the file on collective bargaining on the basis of an opinion issued by the Ministry of Economy and Finance following an agreement reached by the parties, the Committee recalls that it has considered it to be acceptable that in the bargaining process the employer side representing the public administration seek the opinion of the Ministry of Finance or an economic and financial body that verifies the financial impact of draft collective agreements. The Committee has also considered that insofar as the income of public enterprises and bodies depends on state budgets, it would not be objectionable – after wide discussion and consultation between the concerned employers’ and employees’ organizations in a system having the confidence of the parties – for wage ceilings to be fixed in state budgetary laws, and neither would it be a matter for criticism that the Ministry of Finance prepare a report prior to the commencement of collective bargaining with a view to ensuring respect of such ceilings [see Compilation, paras 1486 and 1491]. Based on the foregoing, and with a view to strengthening the parties’ confidence in collective bargaining mechanisms and reaching a reasonable compromise between the need to preserve the autonomy of the bargaining parties and the duty incumbent on governments to ensure the balance of public accounts, the Committee requests the Government to take the necessary measures, including legislative measures if needed, to ensure that the reports or opinions of the budgetary authorities are issued prior to the conclusion of an agreement between the parties. The Committee refers this legislative aspect of the case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.
8. 445. Lastly, the Committee notes the additional information from the Government according to which: (i) after the agreement was shelved, the union submitted a 29-point list of demands; (ii) following mediation, an agreement was reached on 27 August 2021 on 12 of the 29 points; and (iii) the 17 points pending agreement are at the settlement stage before the Conciliation and Arbitration Tribunal. The Committee takes due note of this information and trusts that the Conciliation and Arbitration Tribunal will take its decision on the pending points as soon as possible. The Committee considers that this case does not require further consideration and is therefore closed.

The Committee’s recommendations

1. 446. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee requests the Government to take active measures to ensure effective compliance with legal deadlines by public institutions involved in collective bargaining processes.
   • (b) The Committee requests the Government to take the necessary measures, including legislative measures if needed, to ensure that the reports or opinions of the budgetary authorities on the availability of resources in the public administration are issued prior to the conclusion of an agreement between the parties.
   • (c) The Committee trusts that the Conciliation and Arbitration Tribunal will promptly reach a decision on the points pending between the parties.
   • (d) The Committee considers that this case does not call for further examination and is therefore closed and refers the legislative aspects of this case to the Committee of Experts on the Application of Conventions and Recommendations.