Individual Case (CAS) - Discussion: 1998, Publication: 86th ILC session (1998)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Brazil (Ratification: 1952)

A Government representative of Brazil said that his country attached great importance to the work of the Committee, as illustrated by the support that it gave at the international level for the ILO, which it considered to be the appropriate forum for labour issues. Brazil had also provided one of the highest numbers of reports to the Committee of Experts and had not failed to reply to any of its observations. Even so, and perhaps for that reason, it had often been called upon to provide additional information to the Conference Committee on the observation made by the Committee of Experts. With regard to the communication from the Sindicato dos Arrumadores de Sao Sebastiao in June 1997, he stated that information had been provided to the Committee in the context of the application of Convention No. 137, in relation to which the Committee of Experts had stated that it would examine the information provided at its 1998 Session due to the large number of documents which it had received. Without the comments of the Committee of Experts on this question, discussion of this matter would be prejudiced. Nevertheless, he stated that the Ministry of Labour had established a mobile mediation unit for the maritime and port sectors which would help improve industrial relations in those sectors. With regard to Article 4 of the Convention, he stated that section 623 of the "Consolidation of Labour Laws" (CLT) was not an obstacle to free negotiation, since Interim Provision No. 1540 of June 1997 clearly covered collective bargaining until a constitutional reform was undertaken, which would require a long time, many consultations and a long legislative process. Meanwhile, the Government had started to promote a serious labour reform based on the expansion of areas of negotiation and the strengthening of trade union organizations, with the objective of making it possible to ratify Convention No. 87. The Government representative stated that the key points of this reform included the reaffirmation of the role of tripartism in the formulation of labour policy, even though trade unions and sectoral unions participated fully in the various councils and committees, and particularly in the council which administered the most important social fund in the country. Another key point in the reform was the expansion of the scope of negotiations, with the transfer to direct negotiations between employers and workers of a number of rights and duties which were regulated automatically by law, including wages, working time and participation in the profits and results of the enterprise, in accordance with the Convention. Further elements of the reform included the abolition of rules respecting trade union monopoly, territorial restrictions and compulsory contributions with a view to strengthening the legitimacy of trade unions, within the spirit of Convention No. 87, and a reduction in the power of labour tribunals to prevent their legal intervention before negotiation procedures had been exhausted, in accordance with a recommendation by the Committee of Experts and the Committee on Freedom of Association. Convention No. 98, as well as Convention No. 87 to a certain extent, were currently central to the Government's preoccupations with the objective of strengthening trade union organizations. In any event, the programme for the modernization of industrial relations subjected all decisions on new forms of contracts to the presence and authorization of trade unions.

With regard to Articles 4 and 6 of the Convention, he recalled the information provided to the Committee of Experts, which understood that the country was undergoing a far-reaching reform programme and that it would be necessary to wait a while for the results. The Government was committed to transforming the State to make it more efficient and responsive to the needs of its citizens. It was seeking greater flexibility in relation to public employees and opening up the opportunity to adopt different systems for the functions and careers which were not typical for the State, which could in turn facilitate the adoption of more modern practices of administration and co-administration.

He said that the Government had proposed a substantial series of reforms to consolidate the economic stabilization plan, to which reference was made in the observation, which had given positive results that had benefited workers. These measures had been adopted within the framework of respect for democratic principles, which required debate, negotiation and a full legislative process, as well as in a context of international financial instability, which had made it impossible to progress more rapidly and with fewer social costs.

The Workers' members thanked the Government representative for the explanations provided and recalled that the Committee of Experts had been commenting on the case for many years. It had last been examined by the Conference Committee in 1991. Despite the detailed report to which the Government representative referred, it had to be noted that the Committee of Experts had once again needed to return to several difficulties in the application of the Convention bearing on very important problems of principle which had a serious impact on the collective bargaining system. Intervention by the authorities in collective bargaining and the determination of wages and conditions of employment, whether in the para-public sector or the private sector, appeared to be a structural feature of the Brazilian system of industrial relations. In effect, the problem was not limited only to a few transitional or isolated provisions, but involved a series of processes and practices which had their origin in the labour codes of dictatorial regimes inspired by Mussolini's Labour Code. The Committee on Freedom of Association had also dealt with several cases which illustrated the inadequacy of the collective industrial relations system, including Cases Nos. 1866 and 1889. It was evident that, as the 21st century approached, such legislation was not compatible with the existence of a modern industrial relations system and social rules adapted to economic globalization. Despite the changes adopted to the legislation and machinery, the authorities retained their fundamental capacity to intervene in the broadest sense of the term in negotiations and the implementation of collective agreements.

During its discussion of this case in 1991, the Conference Committee had indicated its grave concern at the continued application of section 623 of the "Consolidation of Labour Laws", which gave the authorities broad powers to annul collective agreements or arbitration rulings which were not in accordance with the Government's wage policy. The Committee of Experts had been obliged to return to the matter once again this year and to call for the formal repeal of a provision, which the Government stated had not been applied in recent years. The Workers' members agreed that this provision should be repealed formally. Section 623 had already been amended or supplemented, but the public authorities in the broad sense of the term had other means available to them to intervene in the collective bargaining process, particularly through specific labour tribunals. In 1991, the Government representative had stated that an employer could have recourse to the labour tribunals to seek to annul or amend collective agreements. The Workers' members considered that the tripartite composition of the tribunals did not provide sufficient guarantees against interventions in the negotiation process and its results. Everything depended on the functions and objectives assigned to these tribunals and their operation in practice. They sometimes appeared in various ways to be an instrument of state interference in collective bargaining. Furthermore, the succession of temporary economic stabilization plans which had been adopted in recent years also established possibilities for direct or indirect intervention in collective agreements.

In its conclusions in 1991, the Conference Committee had emphasized that it was aware of the seriousness of the economic and financial situation in the country, but had recalled that any economic stabilization policy had to be the product of dialogue, not constraint. The Committee of Experts had also rightly reminded the Government once again of the need to take measures to promote the development of a complete collective bargaining procedure for the determination of the conditions of employment of public officials not engaged in the administration of the State.

For many years, the Government's reports and statements had referred to various projects for the amendment of the legislation. In 1995, a labour legislation commission had been established under the Ministry of Labour to examine priority draft legislation. The Government representative had once again reported several draft texts on collective bargaining and had said that they had reached various procedural stages. It was necessary for the Government to provide information on the progress of these draft texts and to transmit a copy of the laws that were adopted, as requested by the Committee of Experts. A country that was as important as Brazil should have the required competence in the formulation of laws and the measures necessary to adapt and modernize its industrial relations system in accordance with the recommendations of the supervisory bodies. Evidently, it could call for ILO technical cooperation for this purpose, but only if it had the true political will to make real changes in the law as a whole. The Workers' members were bound to insist that the industrial relations system be brought into conformity with international labour standards and that the traces of an authoritarian conception of industrial relations inherited from dictatorial regimes be eliminated from the labour legislation.

The Employers' members also recalled that the Conference Committee had last examined the application of the Convention by Brazil at the beginning of the decade. Since then, the Committee had examined other problems related to the application of Conventions by Brazil. The promotion of voluntary collective bargaining processes was the central objective of the Convention under discussion. Such processes should be developed and applied as much as possible by the countries concerned. In general, the legislation in Brazil appeared to provide the necessary legal basis. However, the relevant provisions were contained in a very complex network of cross-references between various texts, with the added complexity of the requirement to observe wage indices agreed on by the social partners or, if they could not agree on such indices, those formulated by the State. In addition, section 623 of the "Consolidation of Labour Laws" entitled the authorities to nullify collective agreements which did not comply with government wage and economic policies. The basis of the criticism levelled against the Government was that this power ran counter to the objective of the Convention, namely the promotion of voluntary collective bargaining, by allowing considerable room for government interference. In the past, the Government had stated that this provision was only "virtual", whatever that might mean in legal terms, and had not been applied in recent years. The Employers' members agreed with the response of the Committee of Experts, which had been that if the provision were "virtual" it could be repealed so as to ensure that collective bargaining was not hampered. The Government representative had not added many new elements. It was clear that the country was undergoing a fundamental process of reform, although it was not evident which direction the reform would take or what its results might be. The Employers' members called for the reforms that were being adopted to proceed in the desired direction.

The second point raised by the Committee of Experts concerned the need for the Government to take measures to promote voluntary negotiation by public servants not engaged in the administration of the State. The Committee of Experts had noted the Government's indication that the Supreme Federal Court had declared unconstitutional the section of Act No. 8112 of 1990 which granted public servants this right. In its reports, the Government had referred to the administrative reform that was being carried out and the measures that were now before Congress.

On both of the above issues, the Government should be requested to report on the progress achieved. The Employers' members pointed out that the issues, particularly with regard to wage negotiation, were not isolated and could not be resolved independently of other economic questions. Total freedom of collective bargaining did not exist anywhere. The State could always intervene in various ways, for example indirectly through financial and fiscal policy, which could not be construed as being interference in the collective bargaining process. However, it was important for the basic trend to be towards greater opportunities for free collective bargaining, rather than greater limitations on it. The Government should therefore review the obstacles to collective bargaining and examine whether state interference was necessary, or whether the objectives of the Government could be achieved in other ways. The Government should be requested to provide a detailed report on the measures that were being taken so that the Conference Committee could examine the matter once again in the near future in the light of the new information provided.

The Worker member of Brazil congratulated the Committee of Experts for its treatment of this case, which reflected the most important aspects. Brazil, according to the speaker, had not applied the Convention since the time of its ratification 46 years ago. Several facts had to be understood in order to understand the case fully. First, the country had undergone five economic structural adjustment programmes within the past 12 years. Most of them had resulted in interference with collective agreements, changed negotiated working conditions, and upset negotiated wage increases. Under these programmes, an economic agenda had taken precedence over the obligation to observe Convention No. 98. Second, while it was true that section 623 of the "Consolidation of Labour Laws" had not been applied by the Government in recent years, labour courts continued to apply it. There were also no guarantees that the Government itself would not resume applying it. It was therefore incorrect to say that section 623 was only a "virtual" law. Third, it was important to recall that public servants continued to be excluded from the right to collective bargaining. The Supreme Federal Court had found that such a right was unconstitutional and it was clear that the purely administrative reforms suggested by the Government would provide no solution to the problem. Fourth, labour courts were given special powers by the Constitution. They were engaged in the compulsory settlement of collective disputes and sometimes used legal procedures which did not follow legal due process. Stressing the Government's failure to apply the fundamental standards of the ILO and the recommendations formulated by its supervisory bodies in respect of the Convention, he asked the Committee to recommend once again that the Government make the necessary changes so as to apply fully freedom of association and voluntary collective bargaining.

The Worker member of the United States commended Brazil for having ratified, along with 136 other member States the Convention and for its intention, at least at the date of ratification in 1952, to bring its labour law into conformity with the principles of freedom of association and genuine collective bargaining. He supported the Committee of Experts' recommendations concerning this case, in particular that public servants not engaged in the administration of the State should be given full collective bargaining rights. The Supreme Federal Courts' 1994 decision denying these rights was in direct contravention of the Convention and the National Congress should be pressed by the Government to pass the necessary laws to ensure compliance with the Convention. It appeared that there had been no collective bargaining between public servants and the Government for the last three years. The speaker observed that the Committee of Experts' comments dealt with the issue of whether section 10 of Interim Provision No. 1079, which provided for free collective bargaining over wages and other conditions of employment, would not be pre-empted by the provisions of the "Real Plan", the Economic Stabilization Plan adopted in 1994, and whether section 623 of the "Consolidation of Labour Laws" had been suspended. According to section 623, the authorities had extensive powers to cancel collective agreements or arbitration awards which were not consistent with the rules set by the Government's wages policy. In fact, the text referred to any provision which "directly or indirectly" conflicted with the entire economic/financial policy of the Government. This was so broad that it could be invoked to invalidate a collective bargaining agreement which included new and improved conditions for workers. Section 623 effectively invalidated free collective bargaining. Reference by the Government to section 623 as merely "virtual" was interesting in so far as it would make common sense to repeal the law if it did not, in fact, exist in the first place. The Government should, therefore, take steps rapidly to repeal section 623.

The Worker member of Argentina noted that, despite the information provided by the Government, the real situation was different. In practice, public servants had not been able to negotiate collectively since 1994, by decision of the Supreme Federal Court. This had resulted in the freezing of wages, which had not been adjusted since January. It was a cause of concern that collective bargaining could not be used as a means to freely determine conditions of work, since section 623 of the "Consolidation of Labour Laws" severely restricted free negotiation by binding it to the Government's economic and financial policy. The compulsive intervention of the courts in collective disputes prevented the free negotiation of wages and subjected them to government policy. The reforms proposed by the Government did not limit the power of the labour courts to intervene in disputes and therefore seriously weakened the freedom of negotiation guaranteed by the Convention. The Conference Committee needed to insist on the continuation of the reforms that were under examination in order to achieve the objective of unconditional and unlimited collective bargaining. The democratization of industrial relations in the countries of the Southern Cone of Latin America was essential for the integration of their markets. He therefore urged the Government to facilitate the implementation of the social dimension of MERCOSUR, which would benefit all workers in the region.

The Worker member of Uruguay said that the situation of the legislation on collective bargaining, and in particularly section 623 of the "Consolidation of Labour Laws", was a cause of concern for all the workers in the countries of the region, since it was not in accordance with the agreement to coordinate labour legislation and respect core ILO Conventions. The ILO had provided technical assistance with the objective of achieving this coordination in labour matters. Economies could not be modernized if workers' basic rights, such as collective bargaining, were sacrificed. Collective bargaining was the most efficient method of regulating markets and it was unacceptable for economic restructuring to be achieved at the cost of the social dimension, as envisaged by section 623 of the CLT. Although the Government stated that it did not apply section 623, the provision was in fact given effect by the labour courts, which used it to restrict and undermine collective agreements. The situation was even worse for public employees, who did not enjoy the right to collective bargaining, as if they were second-class citizens.

The Government representative thanked the speakers for their contributions to the debate. He recognized the "profound knowledge" demonstrated by the Workers' members concerning the labour situation in Brazil, but deplored that they were out of date regarding the most recent changes in the world of work. The labour court, for example, was applying an internal instruction according to which unilateral measures in labour disputes would not be receivable until all necessary steps had been taken to achieve collective negotiation and conciliation. He had noted the comments and said that they would be examined carefully. When new measures were taken, the Committee would be duly informed. He recalled the information provided, including the progress made by the Government in modernizing the labour laws and denied the existence of any intervention in industrial relations, contrary to what some Worker members had stated.

The Government representative stated that it was exaggerated for the conclusions to state that tangible progress had not been made when there had been numerous examples of progress and significant measures adopted by the Government, such as the training of 1,700 mediators from the public and private sectors with the support of the ILO's International Training Centre in Turin.

He had noted the conclusions and would not take up more of the Committee's time.

The Committee noted the oral information communicated by the Government representative as well as the discussion which took place thereafter. The Committee observed with concern that despite the repeated and long-standing comments made by the Committee of Experts on the need to amend the legislation in order to promote free collective bargaining, no tangible progress had yet been made. It noted the Government's assurances that draft legislation was now in preparation in order to applyArticle 4 of the Convention. It recalled the importance it attached to the implementation of this fundamental Convention and urged the Government to provide a detailed report to be examined by the Committee of Experts in order to allow an evaluation of the extent to which real and substantial progress has been made in law and in practice. The Committee recalled that the International Labour Office was at the Government's disposal to provide the technical assistance which might be necessary in order to ensure that legislative obstacles to free collective bargaining in both private and public sectors covered by the Convention are removed.

The Government representative stated that it was exaggerated for the conclusions to state that tangible progress had not been made when there had been numerous examples of progress and significant measures adopted by the Government, such as the training of 1,700 mediators from the public and private sectors with the support of the ILO's International Training Centre in Turin.

He had noted the conclusions and would not take up more of the Committee's time.