Rapport où le comité demande à être informé de l’évolution de la situation - Rapport No. 340, Mars 2006

Cas no 2424 (Colombie) - Date de la plainte: 02-JUIN -05 - Clos

Allegations: the complainant organizations allege collective dismissals of workers as part of the process of restructuring at the Banco Cafetero S.A. BANCAFE, in a manner contrary to the collective agreement in force; cuts in staffing; and the total liquidation of the company through the Decree of 26 October 2004

621. The complaint is contained in a communication presented by the National Union of Bank Employees (UNEB) and the Single Confederation of Workers of Colombia (CUT) which was received on 2 June 2005. The CUT sent new allegations in a communication dated 20 June 2005.

1. 622. The Government sent its observations in a communication dated 15 September 2005.
2. 623. 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), the Labour Relations (Public Service) Convention, 1978 (No. 151), and the Collective Bargaining Convention, 1981 (No. 154).

A. The complainants’ allegations

1. 624. In their communication of 2 June 2002, the Union of Bank Employees (UNEB) and the Single Confederation of Workers of Colombia (CUT) allege that on 17 July 2000, the national government, through Decree No. 1388, ordered that the workforce at BANCAFE be reduced to 4,800 workers, which led to the dismissal of 2,000 workers, all of whom belonged to the UNEB, between 17 July 2000 and 25 February 2001. The union appealed against the Decree, but the appeal was rejected on 19 October 2000. Two further proceedings were then initiated to suspend the Decree, one on grounds of unconstitutionality and the other on grounds of illegality, before the Council of State on 19 September 2002.
2. 625. The complainant organizations indicate that on 26 February 2001, the Council of State ordered the provisional suspension of the Decree in question owing to certain irregularities in its issuance. However, on 15 May 2003, the Council of State rejected the applications for suspension.
3. 626. There exists a collective agreement between the UNEB and BANCAFE according to which workers with ten or more years of service with the company cannot be dismissed. The workers lodged an official appeal for reinstatement before the labour courts, and reinstatement was ordered in some cases. The dismissals were, however, confirmed by the higher courts.
4. 627. The UNEB adds that on 26 October 2004, the national government, through Decree No. 3520, ordered the reduction of the workforce at BANCAFE to 3,400 workers, which led to the dismissal, between 28 October 2004 and 7 March 2005, of 300 workers, all members of the union. The union sought the annulment of the Decree, but this was rejected by the Ministry on 16 February 2005. The workers did not apply to the labour courts for reinstatement because the higher courts had on a previous occasion set aside reinstatement orders.
5. 628. On 7 March 2005, the national government enacted Decree No. 610 of 2005 ordering the liquidation of BANCAFE and the consequent termination of all the 3,250 employment contracts in force. This also entailed the termination of the collective agreement.
6. 629. On the same date, through Decree No. 611, a new workforce list was established for the new entity entitled GRANBANCO BANCAFE. The list comprised a president, seven vice-presidents, three general directors, an internal comptroller, a general secretary and 3,200 employees.
7. 630. The unilateral liquidation of the company is a serious infringement of the right of association, since the termination of the existing employment contracts means that the union loses its members and consequently ceases to exist. According to the unions concerned, the explanations they were given state that the liquidation was due to the considerable staff costs resulting from the collective labour agreement and to the company’s economic difficulties. However, the workers of UNEB decided at ordinary and extraordinary meetings not to present a list of claims from October 2001 until December 2005 in order to help the bank to avoid any increase in staff costs. Furthermore, according to the complainant organization, BANCAFE was financially sound. According to the UNEB, workers at the Banco Cafetero S.A. in liquidation are hired out on loan to the new bank without any clear agreement concerning work, which is clearly illegal and unconstitutional.
8. 631. According to the complainant organizations, liquidation of the company was the result of the unilateral decision by the Government, which did not take into account the collective agreement in force and was not preceded by any talks with the unions.
9. 632. The new entity GRANBANCO has concluded contracts with the same workers, but the contracts in question are civil contracts which prohibit union membership. The establishment of the new entity was not, according to the complainant organization, justified and its sole objective was to establish a new entity in which the workers would not be allowed to join a union.
10. B. The Government’s reply
11. 633. In its communication of 15 September 2005, the Government states that it has been undertaking far-reaching reforms of the national public administration in order to improve its services in terms of quantity and quality, at the same time reducing excessive operating costs. It was with that aim in mind that the reorganization and restructuring of certain national bodies was ordered.
12. 634. With regard in particular to the Banco Cafetero S.A., the Government states that the crisis which the country experienced in 1998 and 1999 particularly affected the bank, causing a decline in its assets and liquidity and a serious administrative crisis. The declining value of assets brought the solvency level down to levels well below those required under Colombian law, and obliged the Superintending Authority for Banks to place the bank under special supervision.
13. 635. In August 1989, the Superintending Authority for Banks, who considered that the bank’s solvency continued to be poor, in accordance with the authority conferred on him under the terms of section 113(2) of the Organic Financial System Statutes, ordered the recapitalization of the bank as a means of preventing receivership by an amount not lower than US$260 million. Given that the shareholders of BANCAFE did not have the resources needed to capitalize the bank to the extent required by the Superintending Authority for Banks, the recapitalization order could not be implemented. As a result, the Financial Institutions Guarantee Fund (FOGAFIN), in accordance with its powers under section 320(4) of the Organic Financial System Statutes, in 1999, proceeded with capitalization by the amount required by the Superintending Authority for Banks. The decision was taken by FOGAFIN on the basis of an analysis of the risks entailed in liquidating an entity the size of Banco Cafetero undergoing a financial crisis, which would require about US$1.3 billion in liquid assets. FOGAFIN thus became the owner of 99.9 per cent of the bank’s shares. State intervention in the bank was intended as a temporary measure until such time as solvency could be restored.
14. 636. Three further capitalization initiatives followed the first, but it was not possible to achieve a definitive improvement in the bank’s condition.
15. 637. In parallel with the capitalization strategy, the bank launched an administrative restructuring and institutional adjustment plan, the aim of which was to restore its financial viability by reducing its branch network, rationalize its administrative costs, update its technology and optimize its organizational structure at all levels. These efforts were reflected in improved operational efficiency, adaptation of its technological platform, and reduced labour and operating costs.
16. 638. In accordance with state policies regarding public banks, the Board of Directors of FOGAFIN, in September 2000, gave authorization to the bank to engage the investment bank to undertake the process of evaluation and transfer of FOGAFIN shares in the Banco Cafetero.
17. 639. The recommendations concerning the strategy of obtaining private funding are contained in the document produced by the National Council for Economic and Social Policy (CONPES) No. 3239 of 25 August 2003, and state that:
18. … BANCAFE has been restructured, although its current situation cannot be sustained in the longer term for the following reasons:
19. – BANCAFE has the lowest net assets of the entire financial system. Owing to its lack of capital, the bank is unable to maintain its commercial operations and maintains an excessive concentration of assets in investments. As a result of this, it requires an injection of new capital of at least US$108 million, which would allow the removal of the capital guarantee provided by FOGAFIN. The current composition of the capital assets of BANCAFE exposes shareholders to the possibility of the new capitalization exercises in the event of losses arising from the market risks entailed by its activities.
20. – BANCAFE, by comparison with the other banks of similar size operating in Colombia, has still not achieved adequate levels of efficiency…
21. 640. The document also maintains that “elimination of pension liabilities is required in order to attract investors, and because in addition to improving the operating margin, it will reduce possible future risks”.
22. 641. The sell-off programme, together with the evaluation, was last submitted to the Council of Ministers on 22 December 2001, but no final decision was taken. In accordance with the recommendations of the Council of Ministers, FOGAFIN and the bank were required to seek options other than the sale of 100 per cent of FOGAFIN shares, which would make it possible to bring private capital into BANCAFE. For that purpose, an “information room” was opened in October 2003 where FOGAFIN launched a strategy for bringing private capital into BANCAFE; this involved two successive and independent processes.
23. 642. The first process was intended to bring about capitalization of the bank by an investor or group of investors, thereby enabling FOGAFIN to remove the capital guarantee granted to the bank without any risk to its assets. In the second process, FOGAFIN, following the adoption of the transfer programme by the national government, would be in a position to transfer the BANCAFE shares.
24. 643. During the development of the capitalization process, three potential investors visited the information room, having met the requirements established in the regulations concerning the use of private capital. On 18 February 2004, the adjudication hearing took place but no offer was received.
25. 644. Although it is not possible to determine with certainty the reasons for which no proposals were received regarding capitalization of the bank, there are a number of possible causes. These included the bank’s high labour and pension costs (inefficiency), its large size in relation to its portfolio, the low level and profitability of its branch network, the difficulty of implementing new commercial policies in an environment which makes proper accounting impossible, and the need to improve operational efficiency (related costs). Despite all the efforts that were made, it was not possible to determine the bank’s position precisely.
26. 645. In conclusion, the strategy of bringing in private capital, which does not in itself contravene the provisions of the Conventions on freedom of association and collective bargaining, failed owing among other things to the inflexibility of the relevant collective agreement and a number of other crucial aspects mentioned above.
27. 646. As explained above, one of the main causes of the critical situation of the Banco Cafetero, which necessitated further commitment of state resources, was related to the high labour costs, which made it impossible to manage the institution in an effective way. For this reason, the Government, in accordance with its constitutional and legal prerogatives, in particular the authority conferred on it under article 189(14) of the Political Constitution, enacted Decree No. 1388 of 2000 to restructure staff at the Banco Cafetero S.A., now in liquidation. As a result of this, it was necessary to cut posts through the unilateral termination of contracts of employment, a process which was implemented without regard to the union status of the workers concerned, that is, whether or not they were union members.
28. 647. As regards Decree No. 3520 of 26 October 2004, this was based on the same basic principles as Decree No. 1388 of 2000, in the sense that the bank, in view of its critical economic situation, decided to reduce administrative and staff costs.
29. 648. The bank’s senior management held 12 meetings with the officers of the union UNEB during 2004 and 2005. The bank undertook a broad process of dialogue aimed at making the union aware of the economic situation and of the need to adopt appropriate measures to tackle the inflexibility of existing contractual arrangements. Unfortunately, the union did not respond positively to these proposals.
30. 649. As regards the refusal to rescind Decrees Nos. 1388 of 2000 and 3520 of 2004, it should be noted that in accordance with section 69 of the Administrative Disputes Code:
31. Administrative decisions shall be revoked by the officials responsible for enacting them or by their immediate superiors, either acting on their own initiative or following an application to that effect, in any of the following cases:
32. – where it is clear that the decisions in question are not consistent with the Political Constitution or the laws in force;
33. – where they are not consistent with the interests of the public or society as a whole;
34. – where they result in unjustified injury to any person.
35. 650. In conclusion, direct annulment is conceived as a juridical mechanism which is intended to correct an error, injury, illegality or inconvenience arising from a decision taken by the public administration. In the present case, the application was not successful because the Decrees in question were entirely legal, given that they did not infringe any constitutional or legal provisions, and because they caused no injury to the workers of BANCAFE, as is shown by the content of the Decrees in question, which stipulated that appropriate entitlements and benefits must be guaranteed in the case of termination of employment, in accordance with the many legal provisions applicable in such cases.
36. 651. As regards the application for annulment on grounds of illegality, this also did not succeed and for this reason the Council of State, on 15 May 2003, ruled that the Decree was legally and constitutionally well founded.
37. 652. As regards the failure to comply with the collective agreement during the liquidation process, the Government states that, in accordance with Ruling No. 07094 of 21 July 2004 by the First Section of the Council of State:
38. Labour agreements or collective agreements do not constitute a valid impediment to the exercise by the authorities at different regional levels of their constitutional and legal prerogatives in the area of administrative restructuring and labour force reductions, given the undoubted overriding benefit of rationalizing costs and modernizing the public administration by eliminating unnecessary posts in the administrative service.
39. 653. As regards the decision by the union at different meetings not to present a list of claims, no evidence of this is provided, and it should be noted that December 2005 lies in the future and cannot be spoken of in terms of established fact. From 2002 onwards, the bank stopped making losses and registered profits of US$2.5 million and US$19.5 million during 2003. Nevertheless, profits remained significantly lower than the average for the banking system as a whole. The unsuccessful attempt to use private capital forced the management to focus its efforts on certain aspects of banking operations that were not affected by inflexible contractual arrangements and to take advantage of conditions in the Colombian market. Along the same lines, two main areas of activity were emphasized: generation of revenues through the treasury and austerity measures to reduce costs. The results of that strategy were reflected in profits in 2004 of US$69 million, representing an increase of 252 per cent over the previous year’s figure of US$20 million. Nevertheless, the greater part of the bank’s profits were the result of extraordinary, rather than recurrent, factors, and not necessarily related to banking business.
40. 654. In 2004, and especially during the second half of the year, the treasury’s new investment portfolio underwent significant changes with regard to volume and composition, the intention being to boost revenues. The average volume of the investment portfolio between January and June 2004 was of the order of US$1.2 billion, compared to an average of US$1.4 billion for the period July-December 2004.
41. 655. At the same time, the Government emphasizes that the other major source of positive results during 2004 was the reduction in administrative costs, and warns that this was the result of the realignment of policies to control costs and hiring which entailed the renegotiation of the main agreements in force; this led to significant savings. Nevertheless, the pace of such reductions cannot continue, at least over the next few years.
42. 656. Although the bank reduced its costs compared to the previous year, it is important to note that staff and administrative costs account for some 95 per cent of the revenues generated directly by the bank’s commercial operations. Liabilities in the form of staff costs account for 58 per cent of total operating costs, much of this total being taken up by pension costs, which amounted to US$37 million.
43. 657. It is clear from this assessment that these results are not explained by the structure of intermediation business. The greater part of the bank’s revenues are thus derived from non-recurrent factors and treasury transactions, which further increases the gulf between the bank and comparable institutions.
44. 658. The inefficiency went hand in hand with an inflexible staff costs structure, which increased the operating costs of the commercial network, as well as failing to provide incentives to improve commercial management, let alone responding to a market as competitive as the present one. This is shown by the poor results in terms of related revenues over recent years.
45. 659. In December 2004, BANCAFE was one of the most inefficient banks in the Colombian banking system. Administrative and labour costs rose to 81.5 per cent of BANCAFE’s gross financial margin, whereas the average for the comparison group (Bancolombia, Banco de Bogotá and BBVA) was 50.5 per cent, and the figure for the banking system as a whole was 56 per cent. Some 60 per cent of all costs were accounted for by staff costs, while the figure for comparable banks was 49 per cent, and 42 per cent for the system overall.
46. 660. The critical element of the bank’s staff costs was the pension liabilities, which amounted to US$194 million, or more than the total pension liabilities of the rest of the Colombian financial sector. Secondly, there were the disproportionate pay and benefits under the collective labour agreement, which meant that an employee received 21.5 monthly salaries per year, that is, almost two years of pay for one year of service. Thirdly, the terms of the agreement in question resulted in virtual immunity of bank staff to lay-offs.
47. 661. In conclusion, it should be noted that the efforts made by the management over recent years were not enough to achieve figures equivalent to the average for comparable banks. This was clear from its overall indicators.
48. 662. Despite the progress made in recent years in improving the financial structure, the bank still had serious deficiencies.
49. 663. The overall level of net assets of BANCAFE was low by comparison to its total assets, with regard to the prevailing levels in the financial system, and without the capital guarantee would be below the legal minimum. For this reason, the level of risk concentrated in the enterprise was well above that of its competitors at a time when its revenues were highly volatile owing to the dependence on investment, all of which limited the bank’s capacity to achieve its full commercial potential.
50. 664. The fact that the capital guarantee made up a large part of BANCAFE’s net assets exposed its shareholders to further capitalization initiatives in the event of losses arising from market risks entailed by its operations.
51. 665. BANCAFE was inefficient by comparison with other banks of similar size in Colombia, owing to the high operating costs comprising mainly staff-related overheads.
52. 666. In order to assess the possible effect of its structure on future performance, two scenarios were projected: the first assumed continuity based on current labour conditions; the second was based on the Banco Puente model, a bank with labour costs similar to those of comparable banks without any pension liabilities or capital guarantee.
53. 667. The “continuity” scenario suggested that the bank was losing its potential to generate profits because of its labour costs and pension liabilities; this meant lower profitability versus assets and poorer dividends for shareholders.
54. 668. The bank’s net assets as at 28 February 2005 stood at US$217 million, of which almost 60 per cent (US$128 million) was intended to cover high labour costs and benefits. Another US$49 million was earmarked for contingencies arising from pension and labour liabilities. Under such circumstances, a bank could not provide the public service for which it was established, or honour its commitments to workers and retired staff.
55. 669. The Government adds that legal mechanisms exist to defend workers who feel that their individual or collective rights have been infringed. To that end, they can petition the labour tribunals; in the present case, the bank acknowledged the entitlements of the dismissed workers to certain benefits and payments under the terms of the relevant agreements and laws. The relevant documents in support of this will be forwarded later.
56. 670. The Government concludes that the workers did not initiate any legal proceedings against the Government because they know that the bank was obliged to undergo restructuring and liquidation, and respected their rights by paying the various benefits to which they were entitled in line with statutory requirements.
57. 671. In the light of the above, it is clear that the bank had lost the purpose for which it was established, and the continued use of public funds in the bank was costly in social terms and not in keeping with the supposedly temporary nature of assistance from the Financial Institutions Guarantee Fund (FOGAFIN), especially given the failure of procedures intended to reduce that funding by bringing in private sector capital.
58. 672. The national government, in accordance with its constitutional and legal powers, passed Decree No. 610 of 2005 ordering the dissolution and liquidation of the Banco Cafetero S.A. Consequently, that now governs labour relations as long as workers are employed by the bank now undergoing liquidation. The Banco Cafetero thus assumed the total labour liabilities, including pension-related ones, supported by a portfolio of investments to guarantee funds needed to meet established obligations with regard to the company’s employees and pensioners. In addition, the bank was left with assets of US$42 million, which is to be used to fund the process of liquidating the labour force and meet other related costs. If that sum is insufficient, the bank will be provided with a back-up guarantee from FOGAFIN.
59. 673. One may conclude that the Government, through FOGAFIN, has earmarked a considerable sum for the purpose of ensuring that workers’ acquired rights are duly protected, with total compensation of US$68.5 million being paid to 2,337 employees. Compensation for individual workers varies between 108 and 1,442 times the legal minimum wage.
60. 674. As explained before, Decree No. 610 of 7 March 2005 ordered the dissolution and liquidation of the bank and consequently, as indicated in similar provisions relating to the closure of such entities, refers among other things to protection of statutory benefits for workers, whether unionized or not, in such a way that the Decree does not in itself “terminate the collective labour agreement”, as the complainant has claimed. On the contrary, according to section 9:
61. Termination of employment: as a consequence of the dissolution and liquidation provided for in this Decree, the liquidator shall terminate existing contracts of employment in accordance with the provisions of the relevant agreements, laws and regulations, and with the procedures for eliminating public service posts.
62. 675. The Government also states that the Decree in question did not terminate the collective agreement in force at the bank. The provisions that have been applied protect every bank worker over the period in which he or she has been employed there. Neither the UNEB nor any other union organization can claim that an institution which is failing to make the sort of profits required in banking and is not competitive in the banking and credit sector must continue to operate in order to protect a trade union.
63. 676. The national government, in accordance with its constitutional and legal powers, enacted Decree No. 611 of 2005 which did not order the establishment of GRANBANCO-BANCAFE, as the union erroneously claims, but approved the staff list of a body established under Official Public Act 0681 of 7 March 2005, registered with the Public Notary’s Office No. 38 of Bogotá Capital District.
64. 677. The Government adds that it had adopted measures aimed at optimizing the resources of the public treasury. One strategy for achieving this has been an effort to reunify the functions of the state through various bodies at different levels – national, departmental and municipal. This process has been under way for a number of years, and had preserved the constitutional autonomy delegated to the executive in taking decisions with a view to rationalizing and optimizing national resources.
65. 678. Thus, as part of the process of splitting up the assets of the Banco GRANAHORRAR Banco Comercial S.A., the bank GRANBANCO S.A. was established; this is a banking establishment with aims similar to those of the Banco Cafetero S.A. now undergoing liquidation, and in the interests of ensuring continuity in banking services as GRANBANCO S.A. had undertaken to do when it was set up, an agreement was concluded regarding the provision of services between the two institutions in question with a view to facilitating the human resource service for the liquidation process on a temporary basis while the liquidation process proceeded, for which GRANBANCO would acknowledge the labour costs incurred by the body undergoing liquidation during the process.
66. 679. The Government states that UNEB initiated two actions for protection (tutela) before the Second Court of Bogotá Circuit and through the Higher Court of Bogotá, but these were rejected.
67. 680. The Government states that the Bank Superintending Authority has kept a close watch on the bank’s activities throughout this period, and it was for this reason that it adopted the liquidation decisions. Restructuring and liquidation of institutions are the result of financial crises which can lead to the elimination of posts regardless of the status of the workers concerned, that is, whether or not they are union members, and this would therefore not be contrary to the terms of Conventions Nos. 87 and 98. It is clear that the liquidation of BANCAFE was not motivated by anti-union discrimination, and had nothing to do with the union membership or otherwise of the employees concerned.
68. 681. The bank’s senior management tried on numerous occasions to negotiate with the union but the latter had no proposals as to how to modify the situation.
69. 682. It is also clear that the Colombian State committed considerable resources in an attempt to prevent, even up to the last minute, the liquidation of the institution. This proves that there was genuinely no intention of carrying out acts of anti-union discrimination. It should also be noted that the bank complied with all legal requirements regarding the payment of severance pay. Similarly, workers who enjoyed trade union immunity were not dismissed pending judicial decisions to suspend that immunity. They continued to work in BANCAFE, now being liquidated. This is further proof of the total absence of anti-union motives in this case.

C. The Committee’s conclusions

1. 683. The Committee notes that this complaint concerns allegations of collective dismissal during restructuring at the Banco Cafetero S.A. which meant the resignation of these workers from the National Union of Bank Employees (UNEB). The Committee notes that according to these allegations, the restructuring process was implemented without consultations with the trade unions, in contravention of the collective agreement in force, which provided for tenure for workers with ten or more years of service. The Committee also notes that according to the allegations, the workers had decided not to present a list of claims from October 2001 to December 2005 in order to allow the bank to avoid increases in staff costs.
2. 684. The Committee notes that according to the complainant organizations, the dismissed workers were hired under contract by the new bank GRANBANCO S.A., but that under the terms of their contracts of employment they cannot form or join a union.
3. 685. The Committee notes that according to the Government, the restructuring and subsequent liquidation of BANCAFE were due to the need to re-size and restructure public bodies. The Committee notes that the Government refers to the serious economic crisis which affected the bank, prevented it from functioning and made it impossible to save it, despite the considerable efforts made to that end. The Committee indeed notes the failure of various efforts to inject capital and restore the bank to a sound condition, in particular the failed attempt to bring in private capital which did not lead to the expected results, partly, according to the Government, because of the excessive staff costs. The latter comprised, according to the Government, excessive pension liabilities, disproportionate pay and benefits under the terms of the collective agreement, and an inflexible staff costs structure.
4. 686. The Committee notes that according to the Government, labour costs accounted for 58 per cent of total operating costs, and a large proportion of that total resulted from pension costs. For this reason, following failed attempts to restore the bank’s financial health through restructuring and capitalization, it was decided to liquidate the bank by Presidential Decree. The Committee also notes that according to the Government, some 12 meetings were arranged between the union and the Government to discuss this issue, but it was not possible to reach agreement.
5. 687. The Committee notes that according to the Government, the restructuring and liquidation entailed the dismissal of many workers but this was not related to union membership. Furthermore, the workers concerned received appropriate compensation.
6. 688. As regards the failure to comply with the collective agreement during the liquidation process, the Committee notes that the Government, citing the Council of State, states that the labour agreements or collective agreements do not constitute a valid impediment to the exercise by the various regional authorities of their constitutional and legal prerogatives with regard to administrative restructuring and changes in the labour force, given that there is an undoubted overriding public benefit in rationalizing costs and modernizing public administrations by eliminating unnecessary posts, including in the administrative service. The Committee also notes that according to the Government, the liquidation Decree did not terminate the collective agreement in force at the bank, as the provisions that have been applied protect every bank employee during their employment.
7. 689. As regards the allegations concerning the process of restructuring and liquidating BANCAFE S.A., which entailed the collective dismissal of bank workers, all of them members of UNEB, the Committee recalls that the Committee “can examine allegations concerning economic rationalization programmes and restructuring processes, whether or not they imply redundancies or the transfer of enterprises or services from the public to the private sector, only in so far as they might have given rise to acts of discrimination or interference against trade unions. In any case, the Committee can only regret that in the rationalization and staff-reduction process, the Government did not consult or try to reach an agreement with the trade union organizations” [see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 935]. In this regard, the Committee notes that there is a discrepancy between the allegations and the Government’s observations as regards consultations. While the complainant organizations maintain that the process went ahead without any union involvement, the Government states that it met 12 times with UNEB in an unsuccessful attempt to agree on the restructuring. The Committee notes, however, that the documents from the National Council for Economic and Social Policy (CONPES), a copy of which is provided by the Government, do not indicate that there were any consultations with the trade unions on the restructuring process. Indeed, the restructuring initiatives of 2003 and 2005 were implemented through Presidential Decrees (Nos. 1388 of 2000 and 3520 of 2004, which ordered restructuring, and Nos. 610 and 611, which ordered the dissolution and liquidation of the Banco Cafetero S.A. and approved the staff list of GRANBANCO S.A.).
8. 690. As regards the allegations that the process of restructuring and liquidation unilaterally terminated the collective agreement in force, the Committee notes that the Government denies that this is the case, and maintains that workers still employed by BANCAFE in liquidation are still covered by the collective agreement. In this regard, the Committee recalls that “the closing of an enterprise should not in itself result in the extinction of the obligations resulting from the collective agreement, in particular as regards compensation in the case of dismissal” [see Digest, op. cit., para. 914]. The Committee requests the Government to ensure that the collective agreement continues to be applied to workers at BANCAFE while it is liquidated, in accordance with this principle.
9. 691. While the Committee is not in a position to determine whether the dismissals, which occurred during the process of liquidation of BANCAFE, were motivated by anti-union considerations, it notes with great concern the allegations according to which former BANCAFE workers who were collectively dismissed and are now working at GRANBANCO cannot, under the terms of their contracts of employment, form or join unions of their own choosing. The Committee regrets that the Government did not send its observations on this aspect. The Committee recalls that according to Article 2 of Convention No. 87, “Workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organisation concerned, to join organisations of their own choosing without previous authorisation.” The Committee accordingly urges the Government to take the necessary steps to guarantee that workers dismissed from BANCAFE and now working for GRANBANCO enjoy the right to form a union and bargain collectively. The Committee requests the Government to keep it informed in this regard.

The Committee's recommendations

1. 692. 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 ensure that the collective agreement continues to be applied to workers of BANCAFE while it undergoes liquidation, in accordance with the principle that the closing of an enterprise should not in itself result in the extinction of the obligations resulting from the collective agreement, in particular as regards compensation in the case of dismissal.
   • (b) While the Committee is not in a position to determine whether the dismissals which occurred during the process of liquidation of BANCAFE were motivated by anti-union considerations, it urges the Government to take the necessary steps to guarantee that workers dismissed from BANCAFE and now working for GRANBANCO enjoy the right to form a union and bargain collectively. The Committee requests the Government to keep it informed in this regard.