Report in which the committee requests to be kept informed of development - Report No 405, March 2024

Case No 3027 (Colombia) - Complaint date: 28-FEB-13 - Follow-up

Allegations: The complainant organizations allege that the liquidation of a food manufacturing company had the effect of destroying the trade union SINTRAPRICOL and of eradicating the trade union presence in the Facatativá production plant, owned by the Polar corporate group

1. 276. The Committee examined this case at its October 2015 meeting [see 376th Report, paras 276– 300]. 
2. 277. The complainants submitted additional information in communications dated June and October 2016, February 2018, 12 June 2019 and 5 September 2023.
3. 278. The Government sent its observations in communications dated December 2017, 16 November 2017, 28 February 2019, 26 May 2023 and 4 January 2024.
4. 279. Colombia 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 Collective Bargaining Convention, 1981 (No. 154).

A. Previous examination of the case

1. 280. At its March 2015 meeting, the Committee made the following interim recommendations on the allegations submitted by the complainants [see 376th Report, para. 300]:
   • (a) The Committee requests the Government to take the necessary measures to ensure that, in future, the liquidation of companies involves consultations and negotiations with the relevant trade unions.
   • (b) The Committee requests the Government to: (i) conduct, in a short space of time, an exhaustive investigation into the possibility that the company’s dismissal of its unionized workers, concomitant with its liquidation, was an anti-union act; and (ii) to inform it, soon, of the results of this investigation and, if acts of anti-union discrimination are identified, to punish these effectively and compensate the workers appropriately.
   • (c) The Committee additionally requests the Government to keep it informed of progress in legal proceedings related to this case.

B. The complainants’ new allegations

1. 281. In their various communications, the complainants refer to the implementation of the recommendations made by the Committee when it first examined the case. With regard to recommendation (a) on taking measures to ensure that, in future, the liquidation of companies involves consultations and negotiations with the relevant trade unions, the complainants allege that this recommendation has not been implemented, as the Government has not sought conciliation with the parties with a view to finding a peaceful solution to the dispute.
2. 282. With regard to recommendation (b) in which the Committee requested the Government to conduct, in a short space of time, an exhaustive investigation into the possibility that the dismissal by the company Pricol Alimentos SA (hereinafter “the company”) of its unionized workers, concomitant with its liquidation, was an anti-union act, the complainants indicate that the Ministry of Labour through the Territorial Directorate of Cundinamarca conducted an administrative labour investigation commissioned by Order No. 000006 of 12 February 2016. They claim, however, that notwithstanding the fact that in 2010 the decisions of the Ministry of Labour concerning the liquidation of the company did not involve investigations into the existence of acts infringing freedom of association, the Ministry argued that it could not conduct an exhaustive investigation into the alleged anti-union dismissals because of the non bis in idem principle and the statute of limitations.
3. 283. The complainants state that, notwithstanding the above, the investigation proved that: (i) the company was closed and liquidated in December 2009 without the labour administration’s authorization to close as required by Colombian law; (ii) although proceedings for judicial authorization for the dismissal of the company’s workers who enjoyed trade union immunity were initiated, the workers were dismissed in December 2009 without the necessary judicial authorization, which constitutes an act of anti-union discrimination; (iii) the brands, patents and products previously manufactured by the company are now produced by the corporate group in the same plant and with the same equipment that was used by the liquidated company; (iv) five non-unionized employees of the company joined the corporate group to perform the same tasks in the plant, and had their seniority and acquired rights recognized (employer substitution), while no unionized employees of the company were given this opportunity; and (v) none of the 108 workers who process oats in the plant, an activity of the defunct company continued by the corporate group, are unionized, nor are any of the plant’s 476 current employees.
4. 284. The complainants claim that the above demonstrates the anti-union conduct of those who decided to close and liquidate the company, transferring all production and some employees to the corporate group. Stating that the company no longer exists after its illegal liquidation, the complainants claim that the corporate group, which continued the company’s production in its Facatativá plant, is responsible for restoring the rights of the workers who are members of SINTRAPRICOL (hereafter the union).
5. 285. In relation to the Ministry of Labour’s decision of 2010 denying that the company and the corporate group formed a single business entity, the complainants state that: (i) the Ministry wrongly considered that a single business entity could not be declared if one of the two companies had already been liquidated; and (ii) it therefore did not take into consideration the illegal nature of the liquidation that took place without the administrative authorization required by law or the fact that the corporate group took over the company’s equipment and products, effectively merging the two structures.
6. 286. In relation to the Ministry of Labour’s decision, in 2016, to close the investigation into the alleged anti-union acts, launched earlier that year, because the events were time-barred, the complainants allege that there is still a violation of freedom of association, as there is still no judicial authorization for the dismissal of the company’s workers who enjoyed trade union immunity and because members of the union continue to be excluded from the production processes at the Facatativá plant, which are now carried out by non-unionized workers.
7. 287. The complainants lastly state that the anti-union policy of the company, which was supposedly liquidated in 2009, is still evident in its actions to put an end to the legal existence of the union before the courts, as it opposed the 2016 determination of the High Court of Cali in this regard.

C. The Government’s reply

1. 288. In its various communications, the Government provides information on the three recommendations made by the Committee when it first examined the case. With regard to recommendation (a), the Government states that: (i) as the consultations and negotiations referred to in the recommendation do not apply to the facts of the present case but to future cases of liquidation, it was not for the Government to bring the trade union and the company together to enter into negotiations or seek conciliation; and (ii) it complied with this recommendation by forwarding it, in File No. 245356 of 22 December 2015, to the Inspection, Oversight, Control and Territorial Management Directorate of the Ministry of Labour, which is responsible for guiding, coordinating and directing the plans for prevention and oversight in labour legislation.
2. 289. With regard to the Committee’s request for the Ministry of Labour to conduct an exhaustive investigation into the possibility that the company’s dismissal of its unionized workers was an anti-union act, the Government states that on 26 February 2016, the Group on Prevention, Inspection, Oversight and Control – Dispute Settlement and Conciliations of the Territorial Directorate of Cundinamarca ordered a preliminary investigation to be conducted at the company (Facatativá plant) on 8 March 2016, including a general visit, as well as the verification of the following three points: (i) whether the productive activities undertaken by the company prior to its liquidation continued at the Facatativá plant; (ii) whether these activities were transferred to other establishments owned by the corporate group under which the company operated; and (iii) whether non-unionized company workers were maintained in employment by companies forming part of the corporate group The Government indicates that the above-mentioned visit took place and that the president of the union and a representative of the corporate group were interviewed on 26 March 2016, as well as several witnesses identified by the trade union during the month of April.
3. 290. The Government also reports that on 14 September 2016, the Territorial Directorate of Cundinamarca decided to shelve the preliminary investigation and that this decision gave rise to a motion to set it aside and an appeal by the General Confederation of Labour (CGT), which were rejected on 23 November 2016 and 29 June 2017, respectively.
4. 291. In its communication of 16 November 2017, the Government provides details on the content of the preliminary investigation and the decision to shelve the case. The Government points out that: (i) the decision to shelve the case, based on section 52 of Act No. 1437 of 2011, is a result of the statute of limitations, as the events under examination occurred more than three years before the initiation of the investigation, making it impossible to initiate administrative proceedings to impose penalties; (ii) the Ministry of Labour is thus complying with the rules of due process, as enshrined in the Constitution; and (iii) notwithstanding the above, in accordance with section 486 of the Substantive Labour Code, the courts may examine any issues involving termination of employment contracts, reinstatement and payment of wages that may arise.
5. 292. In its communication, the Government includes the text of the decision of 14 September 2016 of the Territorial Directorate of Cundinamarca of the Ministry of Labour to shelve the preliminary investigation, which contains a detailed description of the findings of the labour inspectorate during its investigation, as well as the texts of the decisions rejecting the appeals filed by the CGT in response to the shelving.
6. 293. The above-mentioned decision of 14 March 2016 of the Territorial Directorate of Cundinamarca describes the findings of the preliminary investigation, which took into consideration the three points that were highlighted in the Committee’s conclusions. It states that: (i) the corporate group continues to operate in the Facatativá plant where the company operated; (ii) according to interviewed representatives of the corporate group, there has never been a trade union in the group, but there has been a collective accord (which, under Colombian legislation, is an agreement with non-unionized workers) for approximately 19 years; (iii) with respect to the relationship between the company and the group, the representatives stated that the company operated independently but that the group managed the company under a service contract; (iv) the company experienced economic difficulties that led to its liquidation and the termination of the service contract; (v) the company’s activities, particularly oat production, resumed at the plant following its liquidation and were not transferred to any other company; (vi) five or six non-unionized employees of the company continued to work in the corporate group because of their excellent performance; (vii) there was no need to hire unionized workers, as the positions in which workers were transferred were of an administrative nature; (viii) according to two employees of the group who are members of the collective accord committee, roughly 25 people in the plant previously worked for the company; (ix) another representative of the corporate group interviewed below specified that the group leased the land where the Facatativá plant is located to the company and that the group provided the company with administrative and logistical support, as well as support in oat production, under a service contract; (x) the liquidation of the company was solely due to economic reasons that were unrelated to trade union issues; and (xi) between 2007 and 2009, with the agreement of the workers concerned, several employment contracts were transferred from the company to the corporate group, but this did not constitute employer substitution.
7. 294. The Territorial Directorate considered that the above demonstrated that: (i) the company applied to the courts for permission to dismiss the workers who had trade union immunity; however, the decision to liquidate the company and the unilateral termination of the employment contracts took place prior to the court’s decision, which is why the union representative opposed the granting of authorization; (ii) the company and the corporate group concluded a service contract, under which the group provided the company with administrative and logistical support while the company sold its products to the group; (iii) the group continues to produce oats at the plant that were previously produced by the liquidated company; this production was not transferred to any other company; (iv) some non-unionized employees of the company were transferred to the group because of their excellent performance; and (v) there was no need to hire unionized workers, as the positions in which workers were transferred were of an administrative nature.
8. 295. The decisions rejecting the administrative appeals filed by the CGT against the decision to shelve the case state that: (i) following the liquidation of the company, the applications for judicial authorization of the union officials’ immunity were turned down due to the lack of respondent, as requested by the workers themselves; (ii) for the same reason (the liquidation), the labour administration did not consider that the company and the corporate group formed a single business entity; (iii) the labour administration notes that, at the time of liquidation, the company’s shareholders were paid through the transfer of brands, such as the one for its oat production, which indicates that there was no employer succession from the company to the corporate group; (iv) between 2007 and 2009, several employment contracts were transferred from the company to the corporate group with the consent of the workers concerned, with the agreement stating that “the parties declare that this agreement does not constitute employer substitution; however, as there is no break in service, the employment contract shall continue to be considered a single contract and the worker’s initial seniority shall be respected”; and (v) it is clear from all of the above that the events under investigation occurred between 2008 and 2010 and are thus time-barred under the law.
9. 296. In its communications of 16 November 2017 and February 2019, the Government refers to the observations of the company, which states that: (i) it fully cooperated with the preliminary investigation conducted by the Ministry of Labour; (ii) the decision to shelve the preliminary investigation was due not only to the application of the non bis in idem principle in relation to the 2010 decision of the labour administration on the absence of a single business entity, but also to the absence of any finding of anti-union conduct in the company’s liquidation process; and (iii) the right to due process, which is protected by the non bis in idem principle, is a fundamental right protected by the Constitution.
10. 297. In its various communications, particularly those dated 26 May 2023 and 4 January 2024, the Government provides information on the outcome of various judicial proceedings relating to the facts of the present case, sending the texts of several cassation judgments as annexes. The Government points out that: (i) in seven ordinary labour proceedings initiated by former employees of the company against the company and/or the corporate group with a view to their reinstatement, the claims of the workers were rejected at first instance in six of the seven proceedings, and at second instance and at cassation in all the proceedings; (ii) the request to dissolve the union submitted by the company, while accepted at first instance, was rejected on 5 April 2017 by the Labour Chamber of the High Court of Cali, which found that the plea of lack of cause to bring an action was proven; and (iii) final judgments were handed down in all the aforementioned cases.

D. The Committee’s conclusions

1. 298. The Committee recalls that the present case concerns the liquidation and closure in December 2009 of a company in the agri-food sector operating in a plant located in the city of Facatativá and the complainants’ allegation that the purpose of the liquidation was to put an end to the trade union presence in the plant, which continued to be used by a group in the sector linked to the company. When it first examined the case, the Committee found that the closure of the company had taken place without prior consultation of the trade union, without authorization from the labour administration, and that the dismissals of 14 employees of the company with trade union immunity had taken place without judicial authorization. After recalling the importance of the liquidation and closure of companies being preceded by consultations and negotiations with the relevant trade unions, the Committee requested the Government to conduct an exhaustive examination into the allegation that the company’s dismissal of its unionized workers was an anti-union act, and to inform it of the legal proceedings under way.
2. 299. With regard to its recommendation (a), the Committee recalls and clarifies that it recommended that the Government take measures to ensure that, in future, the liquidation of companies involves prior consultations and negotiations with the relevant trade unions. The Committee notes the Government’s indication that the recommendation was forwarded, in File No. 245356 of 22 December 2015, to the Inspection, Oversight, Control and Territorial Management Directorate of the Ministry of Labour, which is responsible for guiding, coordinating and directing the plans for prevention and oversight in labour legislation. The Committee hopes that the forwarding of this communication will suffice to ensure lasting compliance with this recommendation.
3. 300. With regard to its recommendation (b) requesting the Government to conduct, in a short space of time, an exhaustive investigation into the possibility that the company’s dismissal of its unionized workers, concomitant with its liquidation, was an anti-union act, the Committee notes that the Government, the company and the complainants agree that: (i) the labour inspectorate conducted a preliminary investigation at the Facatativá plant in March 2016; (ii) the preliminary investigation was able to collect information on several points, particularly those specifically highlighted in the Committee’s conclusions (whether the productive activities carried out by the company prior to its liquidation continued at the Facatativá plant, whether these activities were transferred to other establishments owned by the corporate group under which the company operated and whether non-unionized company workers were maintained in employment by companies forming part of the corporate group); (iii) on 14 March 2016, the inspectorate decided to shelve the case on the grounds that: on the one hand, the labour administration had already determined in 2010 that a single business entity could not be formed by a company that had already been liquidated and the corporate group, and that, in this respect, the non bis in idem principle should be respected; and on the other hand, administrative proceedings to impose penalties could not be initiated because the events under investigation dated back to 2008 and 2009 and were therefore time-barred in accordance with Act No. 1437 of 2011; and (iv) the administrative appeals filed by the CGT against the decision to shelve the case were rejected.
4. 301. The Committee notes that the complainants disagree with the decision to close the case. The complainants allege in this regard that the labour administration did not take into consideration: (i) the fact that in 2010, the Ministry of Labour did not investigate the existence of acts infringing freedom of association; (ii) the illegal nature of the closure of the enterprise, which was carried out without the administrative authorization required by law; (iii) the information gathered by the labour inspectorate during the preliminary investigation that demonstrates the anti-union nature of the liquidation and closure of the company, the activities of which continued at the Facatativá plant by the corporate group using non-unionized workers; and (iv) the ongoing violation of the freedom of association of the workers who were unfairly dismissed in December 2009.
5. 302. The Committee also notes the company’s reply, forwarded by the Government, in which it states that the decision of the labour administration to shelve the preliminary investigation was based not only on the application of the non bis in idem principle (in relation to the 2010 decision of the labour administration on the absence of a single business entity) but also on the absence of any finding of anti-union conduct in the company’s liquidation process.
6. 303. The Committee lastly notes the information provided by the Government concerning the outcome of various judicial proceedings relating to the facts of the present case. The Government points out that: (i) in seven ordinary labour proceedings initiated by former employees of the company against the company and/or the corporate group with a view their reinstatement, the claims of the workers were rejected at first instance in six of the seven proceedings, and at second instance and at cassation in all the proceedings; and (ii) the request to dissolve the union submitted by the company, while accepted at first instance, was rejected on 5 April 2017 by the Labour Chamber of the High Court of Cali.
7. 304. The Committee takes due note of the administrative and judicial decisions adopted since its previous examination of the case, as well as the texts of those decisions, which were provided by the Government. With regard to the action taken by the labour administration since its previous examination of the case, the Committee notes that the preliminary investigation conducted at the Facatativá plant in March 2016 revealed that: (i) prior to the liquidation, the company and the corporate group signed a lease and a service contract, under which the group provided the company with administrative and logistical support while the company sold its products to the group; (ii) the group continues to produce oats at the plant that were previously produced by the liquidated company; this production was not transferred to another plant; (iii) between 2007 and 2009, the contracts of some non-unionized workers were transferred from the company to the corporate group with the consent of the workers concerned, with the agreement stating that “the parties declare that this agreement does not constitute employer substitution; however, as there is no break in service, the employment contract shall continue to be considered a single contract and the worker’s initial seniority shall be respected”; (iv) there was no need to hire unionized workers, as administrative positions were moved; and (v) according to interviewed representatives of the corporate group, there has never been a trade union in the group, but there is a collective agreement (under Colombian legislation, a collective agreement is an agreement between an employer and a group of non-unionized workers).
8. 305. With regard to the various judgments of the Labour Chamber of the Supreme Court, annexed by the Government, which rejected, in final judgments, the applications – to the liquidated company, to its procedural successors and to the corporate group – for the reinstatement of several employees of the company who were dismissed when the company was liquidated, the Committee notes that these judgments show that: (i) while the unjustified nature of the dismissal of several of the applicants was recognized due to the absence of administrative authorization prior to the closure of the company, their right to reinstatement in the corporate group was not recognized on the grounds that the company and the corporate group did not constitute a single business entity within the meaning of section 194 of the Substantive Labour Code; (ii) in this respect, although a number of direct and indirect links, both operational (a lease and a service contract prior to the liquidation; transfer of brands and production equipment after the liquidation) and corporate (particularly the fact that, six months after the liquidation, the main shareholder of the liquidated company acquired 40 per cent of the group’s shares), were found to exist between the two entities, there was no evidence of economic predominance of one entity over the other (control of more than 50 per cent of the capital according to case law), which is the main criterion for a single business entity according to section 194 of the Substantive Labour Code; and (iii) for procedural reasons specific to the appeal on a point of law, the Supreme Court did not rule on the absence of judicial authorization prior to the dismissal of the workers who had trade union immunity, as the High Court had not ruled on the matter either, an omission that the applicants would have had to challenge before the High Court itself and not by means of an appeal on a point of law.
9. 306. The Committee takes note of the content of these administrative and judicial decisions, particularly the fact that these bodies found that the criteria of the legal categories established by the Substantive Labour Code, which would have entailed the transfer of the company’s employment contracts to the group after the liquidation of the company, had not been met. The Committee also notes with regret that, despite the recommendation it made when it first examined the case and the preliminary investigation conducted by the labour administration, the competent bodies did not rule on whether or not the liquidation of the company gave rise to acts aimed at eliminating the trade union presence at the Facatativá plant and, in particular, did not determine whether or not the unionized workers who were dismissed in December 2009 were the object of anti-union discrimination, even though the productive activity that they performed was continued by non-unionized workers.
10. 307. The Committee once again recalls in this regard that where cases of alleged anti-union discrimination are involved, the competent authorities dealing with labour issues should begin an inquiry immediately and take suitable measures to remedy any effects of anti-union discrimination brought to their attention [see Compilation of decisions of the Committee on Freedom of Association, sixth edition, 2018, para. 1159]. The Committee also recalls, as it did when it first examined the case, that the liquidation of a company and the fact that the legal person under which the company operated has ceased to exist should not be used as a pretext for anti-union discrimination nor should they be an obstacle to the competent authorities determining whether or not there were acts of anti-union discrimination and, if such practices are shown to have taken place, to sanctioning such illegal acts and ensuring that the affected workers are duly compensated [see Compilation, para. 1115]. In the light of the above, the Committee requests the Government to examine with the social partners the necessary measures to strengthen the mechanisms for protecting freedom of association in the event of liquidation of companies. The Committee requests the Government to keep it informed in this regard.

The Committee’s recommendation

1. 308. In the light of its foregoing conclusions, the Committee requests the Governing Body to approve the following recommendations:
   • The Committee requests the Government to examine with the social partners the necessary measures to strengthen the mechanisms for protecting freedom of association in the event of liquidation of companies. The Committee requests the Government to keep it informed in this regard.