Rapport définitif - Rapport No. 367, Mars 2013

Cas no 2904 (Chili) - Date de la plainte: 15-OCT. -11 - Clos

Allegations: The complainant organizations challenge the decision of the management of the Internal Revenue Bureau to deduct pay from workers for days when they participated in a work stoppage

1. 387. The complaint is contained in a communication from the National Association of Internal Revenue Officials of Chile (ANEIICH) and the Association of Internal Revenue Inspectors of Chile (AFIICH), dated October 2011. The complainant organizations sent additional information in a communication dated 17 May 2012.
2. 388. The Government sent its observations in a communication dated 16 October 2012.
3. 389. Chile 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 Labour Relations (Public Service) Convention, 1978 (No. 151).

A. The complainants’ allegations

1. 390. In their communication dated October 2011, the National Association of Internal Revenue Officials of Chile (ANEIICH) and the Association of Internal Revenue Inspectors of Chile (AFIICH) state that they are presenting a complaint for a violation of freedom of association on account of the application of regulations by the higher authority of the Internal Revenue Bureau (SII), which prohibit bargaining and strikes, with respect to the stoppage that occurred during the last negotiations in the “general public sector pay review” held in November and December 2010. According to the complainant organizations, the SII, through judicial actions by its national director and deputy legal director, has defended the application of regulations that infringe the rights of public servants recognized in the freedom of association Conventions, and particularly ILO Convention No. 151, and has supported the application of obsolete provisions of the Political Constitution and the Administrative Statute which prohibit strikes and bargaining in the public sector, particularly section 84(i) of the Administrative Statute, which prohibits the organization or promotion of strikes or participation therein and the total or partial interruption or stoppage of work.
2. 391. The complainants indicate that since the restoration of democratic institutions in 1990, Chilean governments have negotiated the “general public sector pay review” with the Public Sector Board coordinated by the Single Central Organization of Workers (CUT) which includes the presidents of the following workers’ organizations: ANEF, AJUNJI, ANTUE, ASEMUCH, the Teachers’ Association of Chile, CONFUSAM, CONFEMUCH, CONFENATS, the Nurses’ Association of Chile, FENAFUCH, FENAFUECH, FENTESS, FENATS Unitaria, FAUECH, FENPRUSS and FENFUSSAP. The negotiations are held in October and November each year and, on account of the statutory nature of the legal relationship between public servants and the State as their employer, once the meetings between the parties have been concluded, the Executive refers the respective draft legislation to the National Congress, with or without the agreement of the parties, as the case may be. These negotiations have not always resulted in the conclusion of agreements between the parties, and on many occasions public officials have had to use strike action to exert pressure to secure an improved proposal from the Government.
3. 392. The complainants add that the general membership of the representative organizations of public servants and workers involved in the negotiations is estimated at approximately 178,230 public servants, and the agreements negotiated cover more than 692,792 public servants. The practice of public sector collective bargaining in Chile goes beyond the content of constitutional and legal standards, which do not recognize or regulate public servants’ right to negotiate. The parties to the negotiations are constituted by the public sector organizations and the State, according to the levels concerned, represented by the respective public authorities, under the supervision of the Budget Directorate at the Ministry of Finance, particularly the Rationalization and Public Service Division. The benefits obtained in the negotiations are of general application, as a result of the legal system which regulates pay in the sector, so that the benefits negotiated apply to all officials in the departments affiliated to the negotiating organization.
4. 393. According to the complainants, through the National Association of Fiscal Employees (ANEF), three sectoral agreements have also been negotiated with the Government, on the basis of which the following laws were enacted: Act No. 19553 on the modernization of the State and public management, the “New Deal” Act No. 19882, and Act No. 20212 amending both of these Acts and establishing retirement incentives. The complainants indicate that they have participated in the modernization process of the Bureau in which they work, achieving an excellent level of service. They also indicate that the last report sent by Chile to the ILO in 2009, concerning the effect given to ILO Convention No. 151, indicated the following: “National practice relating to the Convention. (a) General agreements between the Government and public sector trade unions. Under the coalition governments from 1990 to the present, an annual practice has been established under which the Government and the representatives of the various associations of public servants negotiate a general review of pay. The participating bodies are public sector unions at the central, decentralized and municipal levels, transferred services, associations of municipal teachers and subsidized private educational establishments, including those under delegated administration, and state universities. The public sector is coordinated by the Single Central Organization of Workers (CUT). The Government in turn is represented by the Finance Minister and the Minister of Labour and Social Security.”
5. 394. The complainants assert that the Government cannot disregard the right of public servants to engage in collective bargaining since it is under the obligation to adopt appropriate measures to ensure compliance with ILO Convention No. 151 and, in this context, it has maintained a practice of incorporating negotiation as a mechanism for defining common conditions of work and pay for public servants, agreeing upon pay benefits and incentive systems which are applicable throughout the public administration.
6. 395. The complainants indicate that the bargaining practices developed over the past 20 years between the public authorities and various workers’ organizations representing public servants are part of a policy which, until 2010, recognized the right of public servants to participate in the determination of their common terms and conditions of employment. In accordance with this practice, SII officials participated in good faith, protected by national practice in accordance with the obligations of the State relating to freedom of association, in the negotiations for the public sector review in 2010 and also exercised in good faith the right to strike, as has occurred on many occasions over the last 20 years.
7. 396. The complainants allege that, following the negotiations for the last public sector pay review and the work stoppage undertaken by public servants at the end of 2010, various public services docked the pay of workers who had participated in the work stoppage, claiming that they were obliged to do so under the terms of section 72 of the Administrative Statute, which provides that no remuneration can be paid for time not actually worked. In order to make the specific deductions, the respective authorities asked the middle management for reports, thus gathering information of variable quality and accuracy which resulted in the application of arbitrary and illegal deductions.
8. 397. In the case of the SII, on 17 January 2011 the amounts of pay corresponding to the period for which pay was due on 19 January 2011 were not published in the usual way. The officials of the organizations concerned therefore contacted the person responsible in order to make inquiries, whereupon it was indicated that pay deductions would be made. In this context, on 19 January 2011, the Director of the SII and its Deputy Director of Human Resources confirmed that deductions ordered by the Finance Minister, according to indications in the meeting, had been made from the pay of officials who had reportedly participated in the stoppage and protests convened by the Public Sector Board, on the basis of lists drawn up informally by regional managers, without informing those affected or their associations.
9. 398. The complainants state that, in accordance with the powers granted to them by Act No. 19296, they asked the authorities for information on the names of the officials who were members and whose pay had been subject to deductions in January and the respective amounts for each of them in relation to the ANEF protest days, and also asked for the supporting documents relating to the deductions to be sent to them, which was refused. The associations of public servants then brought an action for the protection of constitutional rights provided for under Chilean law, claiming that the deductions were illegal and arbitrary. It was obvious that the arbitrary and disproportionate nature of the deductions masked the intention to weaken the exercise of the right to strike and the organizations concerned, since it affected a substantial number of members, under circumstances when the work stoppage was absolutely legitimate and was undertaken in good faith, in a process of regular negotiation with the political authority, within the framework of the practical application of ILO Convention No. 151, and in the same way as over the past 20 years.
10. 399. The complainants state that the claims for protection gave rise to protection appeals Nos 544-2011 and 545-2011, challenging the legality of the pay deductions affecting 2,074 officials, with amounts disproportionate to the scale of the stoppage, and through arbitrary procedures that did not comply with basic guarantees of administrative procedure. According to the complainants, on 16 September 2011 the Seventh Chamber of the Court of Appeal of Santiago upheld the appeals for the protection of their rights filed by the organizations concerned, declaring that the practices were in violation of the constitutional guarantees of the persons affected, as mass deductions had been made without following appropriate procedures. The Court ordered the repayment of the amounts deducted and declared that no deductions should be made as the result of a work stoppage unless the periods not worked were determined beyond doubt, at least by means of a proper summary investigation. The rulings recognize the authority of the department to take decisions within its sphere of competence, but take issue with the legality of the deductions made by the SII owing to flaws of control and procedure, and the failure to observe the principles of transparency and impartiality established in Act No. 19880 on the basic administrative procedures for state bodies.
11. 400. According to the complainants, during the examination of the appeal, the SII expressed its intention of penalizing the exercise of trade union rights by reiterating that the work stoppage infringed the prohibition on the organization or promotion of strikes or participation therein and on the total or partial interruption or stoppage of work, as laid down by section 84(i) of the Administrative Statute. Even more seriously, as a logical consequence of deeming the exercise of strike action to be an infringement of the prohibitions laid down in the Administrative Statute, this exposes workers to the application of the regulations governing administrative liability, involving a summary investigation or administrative proceedings, as referred to by sections 119 and 121 of the Administrative Statute. Section 119 provides that any employee who infringes his or her official obligations or duties may be liable to censure in his or her staff file or to disciplinary measures. The same section adds that officials shall incur administrative liability if the infringement of their duties and obligations is such as to incur disciplinary measures, which shall be certified by means of a summary investigation or administrative proceedings. Section 121 provides that officials may be subject to the following disciplinary measures: (a) reprimand; (b) a fine; (c) suspension from duty ranging from 30 days to three months; and (d) dismissal. The disciplinary measures shall be applied taking into account the seriousness of the misconduct and any mitigating or aggravating circumstances derived from the past record of the person concerned.
12. 401. The complainants consider that, in this context, if the decision of the SII were to be maintained, and if it were to be upheld by the ruling of the Supreme Court, which will finally settle the appeals for protection filed by the complainant organizations, the application of the regulations prohibiting the exercise of the right to strike will result in the dismissal of any officials who have participated or will participate in future in stoppages, which represents a violation of freedom of association that is unprecedented in the democratic history of Chile, and can only be compared to the persecution of the Chilean trade union movement that occurred in the 1970s.
13. 402. In short, the complainants state that: (1) the measures and definitions adopted by the Director of the Internal Revenue Bureau not only undermine the most important negotiations engaged in by Chilean public sector workers, but also threaten the employment of all the staff that have been arbitrarily identified and penalized by the authority for going on strike, since if the authority perseveres in its intention of calling for strikes in the public sector to be declared illegal, public servants could even face dismissal; (2) the lack of an appropriate mechanism for determining any deductions applicable in the event of stoppages cannot affect the right of public sector workers, particularly union members, to take industrial action, given the insistence of the higher authorities of the SII on applying the legal provisions that prohibit strikes in circumstances in which work stoppages are a legitimate means of exerting pressure that has been used by the organizations of Chilean public servants in their negotiations with complete legitimacy, even before the ratification of Convention No. 151, as was recognized by the Santiago Court of Appeal in the rulings issued on the complainants’ appeals; and (3) the SII has not given any guarantees that it will respect the right to strike, which it considers illegal, stating that it will seek to establish administrative liability if the arbitrary pay deductions imposed on the union members are not accepted. This is an unacceptable condition since it means accepting the lack of an objective, transparent and fair mechanism or procedure for their determination, which would weaken the law itself. The complainants call for the Government to be asked to adopt measures as soon as possible to prevent the application of the prohibition of strikes in the public sector. Finally, in their communication of 18 May 2011, the complainants report that they made a presentation to the Ethics Commission of the Supreme Court of Justice in relation with a member of the Court, which issued two rulings stating that the pay deductions were made in strict conformity with the law.

B. The Government’s reply

1. 403. In its communication dated 25 October 2012, the Government recalls that the complaint by the ANEIICH and the AFIICH essentially alleges practices which affect freedom of association and collective bargaining in the public sector, the alleged non-observance of ILO Convention No. 151 in that regard, and the application of regulations by the higher authority of the SII prohibiting strikes. The actions of the SII authorities which, according to the complainants, were in violation of freedom of association and bargaining in the public sector, and affected public servants belonging to the ANEIICH and the AFIICH, are reported to be related to pay deductions in January 2011 imposed on officials who took part in strikes and did not perform their normal duties.
2. 404. The Government subsequently asked the SII authorities for their observations on this matter, and the latter indicated that the deductions of pay from the officials concerned were in accordance with Chilean law, citing articles 1 and 19(16), final paragraph, of the Political Constitution of the Republic; sections 3 and 62(8) of Act No. 18575; sections 61 and 72 of the Administrative Statute; and also the statements issued on this subject by the Office of the Comptroller-General of the Republic (CGR). The SII also indicated that, through the application of these legal provisions, and also the criteria laid down in the instructions and directives of the CGR, the pay unit of the Bureau, at the written request of the direct superiors, deducted pay for the time not worked from officials who took part in the work stoppage.
3. 405. As regards the procedure used by the SII to make the deductions, it indicated that the deduction procedure and the related documentation were submitted for legal review, as a result of the two appeals for protection filed by the SU Association of Officials. Both appeals were rejected by rulings of 19 January 2012 handed down by the Supreme Court of Justice (Court register Nos 10788-2011 and 10790-2011), which upheld the validity of the deductions and the procedure used. Furthermore, the SII indicated that the decisions of the Supreme Court concluded that the deduction procedure used by the SU was in strict accordance with the law and based on technical criteria, which led the Supreme Court of Justice to conclude that any alleged lack of reasonableness had to be dismissed and to find that the procedure followed was not by nature arbitrary.
4. 406. Lastly, as regards the denunciation of practices affecting the observance of ILO Convention No. 151 and the application by the SII higher authorities of legal provisions prohibiting strikes, the latter authority indicated that although Convention No. 151 protects the union rights of public servants, and that a broad interpretation could even be taken as protecting the right to collective bargaining, they consider that there can be no grounds for interpreting Convention No. 151 as protecting stoppages and strikes in the public sector, since the text of the Convention would be opposed to them. They add that Article 8 of Convention No. 151 (Part V, Settlement of Disputes) reads as follows: “The settlement of disputes arising in connection with the determination of terms and conditions of employment shall be sought, as may be appropriate to national conditions, through negotiation between the parties or through independent and impartial machinery, such as mediation, conciliation and arbitration, established in such a manner as to ensure the confidence of the parties involved”, and not through strikes, stoppages or protests, as occurred in the present case.
5. 407. The Government refers to the final paragraph of article 19(16) of the Political Constitution, which provides that: “Neither state nor municipal officials may go on strike; nor may people working for corporations or enterprises, regardless of the nature, objectives or functions thereof, that provide services of public utility, the interruption of which might seriously harm health, the economy of the country, public supplies or national security.” It is evident that the Chilean Constitution does not allow public servants – including those employed by the SII – to go on strike, as some officials in that institution did at the end of 2010.
6. 408. In line with the above, the Government refers to the principle of legality established in article 6 (“the action of the bodies of the State must be subject to the Constitution and to the norms enacted in conformity therewith ...”) and article 7 of the Constitution (“The bodies of the State shall operate validly within their field of competence, and in the manner prescribed by law, after their members have been properly invested. The said bodies may not assume any other authority or rights than those expressly conferred upon them by the Constitution or the law”); section 62(8) of Constitutional Organic Act No. 18575 establishing the basic structure of the public administration, which provides that the “principle of administrative probity is violated” in particular by “failing to meet the obligations of efficiency, effectiveness and legality which govern the performance of public duties, with serious obstruction of the service or of the exercise of civic rights in relation to the Administration”; section 61(a) of the Administrative Statute, which indicates that one of the obligations of officials is to “personally discharge the duties of the post in a regular and constant manner ...”; and the final paragraph of section 65 of the Statute, which states that “officials shall perform their duties constantly during the ordinary working day”. All of the above lead to the conclusion that any failure to perform the duties of the post concerned in a constant and regular manner during the working day – without the corresponding leave or authorization from the management – could contravene the duties of efficiency, effectiveness and legality, and even the legal principle of administrative integrity.
7. 409. Moreover, as regards the regulations and the deductions made, it should be recalled that the right to remuneration is established in section 93 of the Administrative Statute, as follows: “officials shall be entitled to receive for their services the pay and any additional allowances established by law in a full and regular manner”, which presupposes the actual provision by officials of the services for which they were appointed. In addition, section 72 of the Statute provides as follows: “No pay shall be due for any time not actually worked, except in cases of paid public holidays, leave of authorized absence as provided for in the present Statute, cases of preventive suspension envisaged in section 136, or cases of unforeseen occurrences or force majeure. Reductions shall be made on a monthly basis, at the written request of the immediate superior, for any time not worked by employees, taking account of the fact that the pay corresponding to one day or one hour of work shall be the quotient obtained by dividing monthly pay by 30, 60 or 190, respectively ...”. In the light of the above, it is clear that the law authorizes deductions from pay when the prescribed conditions are met.
8. 410. According to the Government, all the above, in conjunction with numerous opinions of the CGR regarding pay deductions (No. 22064 of 1999, No. 4981 of 2004, No. 58845 of 2004, No. 7207 of 2007 and No. 62446 of 2009, inter alia), lead to the conclusion that the SII authorities acted in accordance with the Constitution and national law, these actions being upheld on two occasions by the Supreme Court of Justice, the highest court in Chile.
9. 411. The Government states that the SII officials, in conformity with Organic Act DFL No. 7 of 1980 of the Ministry of Finance and as members of a public supervisory body, exercise authority in the name of the State, their duties being the application and inspection of all internal taxes established by law or which may be established in the future.
10. 412. The Government insists that there has been no violation of Convention No. 151, which does not explicitly provide for the right to strike of public servants. Moreover, the interpretation of the Committee on Freedom of Association has been very clear in stating that the freedom of association of public servants does not necessarily imply the right to strike; that the latter can be restricted and prohibited in cases involving the exercise of authority in the name of the State (as in the case of the SII officials); and that pay deductions for strike days give rise to no objections with regard to freedom of association.
11. 413. Furthermore, according to the Government, based on a reading of Article 7 (“measures appropriate to national conditions shall be taken, where necessary, to encourage and promote the full development and utilisation of machinery for negotiation of terms and conditions of employment between the public authorities concerned and public employees’ organisations, or of such other methods as will allow representatives of public employees to participate in the determination of these matters”) and Article 8 (“the settlement of disputes arising in connection with the determination of terms and conditions of employment shall be sought, as may be appropriate to national conditions, through negotiation between the parties or through independent and impartial machinery, such as mediation, conciliation and arbitration, established in such a manner as to ensure the confidence of the parties involved”) of ILO Convention No. 151, it may be deduced that the means of settling disputes are not strikes, stoppages or protests, as occurred in the present case, but encouraging and promoting the use of independent and impartial procedures for negotiation between the authorities and the organizations of public employees, in accordance with national conditions and law, as is entirely the case in Chile.
12. 414. Lastly, the Government concludes that there is no evidence of any anti-union action or violation of ILO Conventions Nos 87, 98 or 151 since the SII authorities acted in accordance with the law, having recourse to the judicial authorities established under the national legislation (as reviewed on two occasions by the highest court in the country), which found that the procedure used for the deduction of pay was in conformity with the law. Moreover, these deductions cannot be considered per se as an anti-union practice or a violation of ILO Convention No. 151, since there is no indication of how this Convention authorizes strikes in the public sector, an interpretation which is in line not only with national law, but also with the views of the Committee on Freedom of Association on this matter.

C. The Committee’s conclusions

1. 415. The Committee observes that in the present case the complainant organizations allege that, following negotiations between the public authorities and various representative organizations of public servants regarding the general pay review at the end of 2010, and after exercising the right to strike in good faith, a number of public services (in particular the SII) made deductions from the pay of workers who took part in the work stoppage in question, claiming that they were obliged to do so under the terms of section 72 of the Administrative Statute (which provides that no pay is due for time not actually worked). The complainant organizations also allege that in order to make the pay deductions the respective authorities requested reports from middle management, thus gathering information that was variable in terms of quality and accuracy, finally resulting in the application of arbitrary and illegal deductions, and that the measures taken by the SII did not respect the right to strike.
2. 416. The Committee notes that the Government has sent the observations of the SII, which indicates as follows: (1) the deductions of pay from officials were made in accordance with Chilean law (articles 1 and 19(16), final paragraph, of the Political Constitution of the Republic; sections 3 and 62(8) of Act No. 18575; and sections 61 and 72 of the Administrative Statute) and in accordance with the statements issued on the matter by the Office of the CGR; (2) pursuant to these legal provisions and the criteria set out in the instructions and opinions of the CGR, the pay unit of the SII, at the written request of the direct superiors, applied the deductions resulting from the time not worked to the officials who had taken part in the work stoppage concerned; (3) the deduction procedure and the related records were submitted for judicial review, as a result of the two appeals for protection of their rights filed by the complainant organizations, both of which were set aside by rulings handed down by the Supreme Court of Justice on 19 January 2012 (Court register Nos 10788-2011 and 10790-2011), which upheld the validity of the deductions and the procedure used; and (4) the Supreme Court concluded that the deduction procedure used was in strict accordance with the law and based on technical criteria, which led it to find that any alleged lack of reasonableness had to be dismissed and that the procedure followed was not by nature arbitrary.
3. 417. The Committee also notes the Government’s statement that: (1) the Political Constitution does not allow public servants – including those working at the SII – to go on strike, as a number of officials at that institution did at the end of 2010; (2) the principle of legality established in the Constitution, the Constitutional Organic Act establishing the basic structure of the public administration, and the Administrative Statute lead to the conclusion that any failure to perform the duties of the post concerned in a constant and regular manner during the working day – without the corresponding leave of absence or authorization from the management – could contravene the obligations of efficiency, effectiveness and legality, even affecting the legal principle of administrative integrity; (3) as regards the regulations applied and the deductions made, it should be recalled that the right to remuneration is established in section 93 of the Administrative Statute and the legislation authorizes deductions from pay when specific conditions are fulfilled; (4) all of the above, in conjunction with numerous opinions of the CGR regarding pay deductions, lead to the conclusion that the SII authorities acted in accordance with the Constitution and national law, as upheld on two occasions by the Supreme Court of Justice, the highest court in Chile; (5) the SII officials, in conformity with Organic Act DFL No. 7 of 1980 of the Ministry of Finance and as members of a public supervisory body, exercise authority in the name of the State, their duties being the application and inspection of all internal taxes established by law or which will be established in the future; (6) the interpretation of the Committee on Freedom of Association has been very clear in stating that the freedom of association of public servants does not necessarily imply the right to strike, and that the latter can be restricted and prohibited in cases which involve the exercise of authority in the name of the State (as in the case of the SII officials) and that pay deductions for strike days give rise to no objection from the point of view of freedom of association; and (7) there is no evidence of any anti-union action or violation of ILO Conventions Nos 87, 98 and 151, since the SII authorities acted in accordance with the law, having recourse to the judicial authorities established under the national legislation (with a review on two occasions by the highest court in the country), which found in their respective decisions that the actions taken in the procedure for the deduction of pay were in conformity with the law.
4. 418. The Committee recalls that, according to its principles, the right to strike can be restricted in the case of public servants who exercise authority in the name of the State, but observes that in the present case the exercise of this right is permitted in practice. Under these circumstances, taking account of all the information provided in this case, and that the Supreme Court found that “the pay deductions imposed on the workers were made after establishing the identity of those who had actually stopped work and after the respondent party at its own initiative had rectified initial errors which had allegedly been made”, which means that the administrative procedure was conducted by the respondent party on the basis of technical criteria and with the correction at its own initiative of existing errors and that any alleged lack of reasonableness can be set aside, and that the Committee has indicated on numerous occasions that “salary deductions for days of strike give rise to no objection from the point of view of freedom of association principles” [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 654], the Committee will not pursue its examination of these allegations.

The Committee’s recommendation

1. 419. In the light of its foregoing conclusions, the Committee invites the Governing Body to consider that the present case does not require further examination.