Individual Case (CAS) - Discussion: 2018, Publication: 107th ILC session (2018)

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



The Government has provided the following written information.

In its report to the 107th Session (May–June) of the International Labour Convention, issued last February, the Committee of Experts on the Application of Conventions and Recommendations (CEACR), commenting out of the regular reporting cycle, referred to articles 611-A (prevalence of collective bargaining over legislation), 442-B (self-employment) and 444, single paragraph (relationship between individual contracts and collective agreements) of the Labour Code as amended by Law 13467 (2017).

Labour reform in Brazil: Context and objectives

– The previous Brazilian labour legislation, which dated back to 1943, went through some changes over the years, but needed to be updated in order to address requirements of the economy of the twenty-first century.

– The intervention of labour courts cancelling clauses agreed in collective bargaining led to frequent complaints by trade unions. In this context, ABC metalworkers’ unions, which are the cradle of the Brazilian trade union movement, proposed in 2011 the adoption of the Collective Bargaining Agreement with Specific Purpose (ACE), aiming at the prevalence of the collective bargaining over the law, having as the only limitation the rights enshrined in article 7 of the Federal Constitution, precisely the aspect that the labour reform has implemented.

– Labour reform (Law 13467; entry into force in November 2017) stems from many years of discussions regarding challenges of the Brazilian labour market, shortcomings of the labour legislation and concerns about the functioning of the labour justice system.

– Such issues became particularly pressing in a context of deep economic recession: In 2016, unemployment rose to 11.3 per cent – the highest since modern records commenced in 1992 – an increase of 82 per cent since 2012. Other relevant factors impacting the labour market include: 44 per cent of participation of informal jobs in the total amount of jobs, while 60 per cent among unskilled workers; high degree of judicialization; lowest labour productivity since the seventies (near 1 per cent per year); high turnover of labour; underuse of collective bargaining and lack of legal certainty for its implementation.

– Inclusive, comprehensive and extensive consultation with social partners is a key feature of labour reform in Brazil. The proposal of modernizing labour legislation was elaborated after a series of debates organized by the Ministry of Labour and by the Chief of Staff of the Presidency in December 2016, with the participation of representatives of trade unions and employers.

– Subsequently, during the legislative process in 2017, 17 public hearings, seven regional seminars and over 40 meetings with interested stakeholders took place in Parliament and in different states, leading to the approval of the Bill by a significant majority at the Chamber of Representatives and at the Federal Senate.

– Labour reform seeks to provide more flexibility, increased labour productivity, legal certainty and rationality to both labour market and legal system, with enhanced safeguards against breaches of the law and full respect of fundamental principles and rights at work.

– A central aspect of labour reform in Brazil is the strengthening of Conventions and collective agreements between unions and employers, aiming at the possibility for each category to negotiate, collectively, the best terms to reconcile employment quality and increase of productivity, without affecting the rights of workers.

CEACR – Mandate and reporting cycles

– As consistently stated in CEACR reports, the mandate of the Committee refers to the application of Conventions “in law and practice” through an impartial analysis.

– The assessment of the Brazilian case by the CEACR fails to meet that mandate, and minimal fairness requirements, on many accounts.

– The CEACR offered no explanation for the exceptional measure of breaking the cycle and prematurely commenting on the reform before the Government’s due report on the application of Convention No. 98; moreover, the wider context of Brazil’s reform has not been taken into account at all.

– Clearly, there has not been sufficient time for an evaluation of all relevant aspects of the implementation of the new Brazilian legislation. At the time the Committee met in November 2017, Law 13467 had entered into force a few days earlier.

– Additional time would have been required to allow for an adequate and balanced understanding of the effective legal framework, including high court decisions, and its impact on the labour market.

– Respecting regular reporting cycles would have facilitated a comprehensive evaluation, in 2019–20, of the reform’s application of Convention No. 98 principles. Brazil presented its last report on Convention No. 98 in 2016 and its subsequent reporting obligation would normally fall on 1 September 2019. The CEACR would thus publish comments in February 2020 and any possible CAS discussion would only take place at the 109th Session of the ILC (2020).

Relationship between Labour Law and Collective Agreements (Article 611-A of Law 13467)

– According to the experts, article 611-A, despite safeguards contained in article 611-B of the Labour Code, breaches “the general objective of Conventions Nos 98 and 154 and the Labour Relations (Public Service) Convention, 1978 (No. 151)”, which “is to promote collective bargaining with a view to agreeing on terms and conditions of employment that are more favourable than those already established by law” [.].

– The analysis by the experts is seriously flawed by the complete absence of efforts to refer to the ordinary meaning of the text of the relevant Convention No. 98, as required in international law.

– In this respect, it should be stressed that nothing in the text of Article 4 of Convention No. 98 or any other agreed language by tripartite bodies indicates that collective bargaining is limited to more favourable conditions than “those already established by the law”: Article 4: “Measures appropriate to national conditions shall be taken, where necessary, to encourage and promote the full development and utilization of machinery for voluntary negotiation between employers or employers’ organizations and workers’ organizations, with a view to the regulation of terms and conditions of employment by means of collective agreements.”

– On the contrary, the spirit of Article 4 and the Convention as a whole, according to recommendations of the Committee on Freedom of Association, censors limitation of the scope of negotiations and invalidation of collective agreements’ by courts and executive authorities.

– In that same vein, the ILO Policy Guide on Collective Bargaining (2015) states: “The collective bargaining framework needs to give the negotiating parties full latitude to decide the subjects they wish to include on their bargaining agenda. Measures taken to restrict the scope of negotiable issues are generally considered by the ILO’s supervisory bodies to be incompatible with international labour standards and principles on the right to collective bargaining.”

– In addition, the first part of the text of Article 4 expressly relates measures to promote voluntary negotiations to “appropriate national conditions” – a term with both legal and practical connotations, requiring due considerations of the complexity of the situation on the ground before any conclusion is drawn (once again, the CEACR report is completely silent in an essential aspect for the correct interpretation of the relevant obligations under Convention No. 98).

– In this line of thought, it would be paramount to assess the context of the Brazilian reform and the wider framework of fundamental principles and rights at work enshrined in the Brazilian Constitution of 1988 (the breadth and detail of constitutional labour rights are unique features of our legal system). Relevant constitutional provisions, article 611-B of the new legislation (excluding about 30 fundamental workers’ rights from negotiation) and all legal remedies available in Brazil ensure thus a system of safeguards that ought to be considered in any thorough examination of the application of Convention No. 98 in law and practice (an examination that is completely absent in the CEACR report).

– In robust and well developed systems of labour rights, such as the Brazilian one, the Committee’s interpretation of Article 4 would amount to a severe, erroneous limitation of the scope of collective bargaining, against the text and the spirit of Convention No. 98.

– The reference to the “travaux préparatoires” of Convention No. 154 (of 1981) is another serious legal flaw in the analysis undertaken by CEACR. In no way would the “travaux” be an appropriate ground for restricting the outcome of collective bargaining:

(i) As a subsequent Convention, it cannot determine the meaning intended by the members who participated in the setting of Convention No. 98 (of 1949) nor those who later ratified it (Brazil ratified Convention No. 98 in 1952, 29 years before the adoption of Convention No. 154).

(ii) According to the Vienna Convention on the Law of Treaties recourse to the “travaux” consists in a supplementary form of interpretation, subordinate to the ordinary meaning, and to be used either to confirm the text of the very treaty under interpretation (i.e. Convention No. 154, and not another one, let alone a pre-existent one, such as Convention No. 98) or in cases of ambiguity and obscurity of that text.

(iii) If, for the sake of argument, one were to consider Convention No. 154, one should give precedence to the text of Article 9 of that instrument, rather than its “travaux préparatoires”: “This Convention does not revise any existing Convention or Recommendation.”

(iv) Even when considering such “travaux” one should read its full text (Report IV(1) of the 67th Session of the ILC – 1981), particularly paragraphs 58 and 65. One shall note that the discussion was more nuanced: a prohibition of outcomes that could derogate from provisions of the law was not even considered and, in any case, no party envisioned the specific legal clause contained in the Brazilian legislation.

Relationship between individual contracts and collective agreements (Article 444, single paragraph, Law 13467)

– The Committee also “recalls that legislative provisions which allow individual contracts of employment to contain clauses contrary to those contained in the applicable collective agreements (although it is always possible for individual contracts of employment to contain clauses that are more favourable to the workers) are contrary to the obligation to promote collective bargaining, as set out in Article 4 of the Convention”.

– It should be recalled that Article 4 of Convention No. 98 does not refer to individual contracts of employment.

– The possibility established in article 444 (not 442, as wrongly recorded at the report) of the amended labour legislation is only applicable to a small proportion of the Brazilian population (0.25 per cent) at the very top layer of income, and with a higher level degree, who are generally employed in positions of management.

Independent contractors (Article 442-B of Law 13467)

– The Committee also states that “the Convention applies to all workers, with the sole possible exception of the police and the armed forces (Article 5) and public servants engaged in the administration of the State (Article 6)”.

– The new text of article 442-B (not 444-B, as wrongly recorded at the report) simply clarifies the legal status of the independent contractor (“autônomo”, in Portuguese).

– Contrary to what the experts conclude, nothing in that provision contradicts Convention No. 98: if the contractor does not hold a subordinate position vis-à-vis his or her contracting party, he or she will not be deemed an employee. Moreover, article 511 has not been amended by the new legislation and thus independent contractors (“trabalhadores autônomos”, in Portuguese) can still be organized in trade unions.

Committee on the Application of Standards (CAS)

– According to the CEACR’s own comments, Brazil has until 1 September 2018, to submit its full report on the application of Convention No. 98, so as to respond to the social partners’ and the Committee’s observations.

– As we have advocated, the limited time and resources of CAS should be devoted to serious cases. Thus, Brazil’s inclusion on the “short list” of the CAS amounts to passing judgment on the Brazilian situation before hearing the Government, in breach of the most basic standards of due process.

– In comparative analysis of other cases and comparable situations, the CEACR has not used incisive language in relation to Brazil. While expressions such as “deep concern”, “deep regret”, “urges” and “firmly urges [various courses of action]”, “persistence and gravity of allegations” are relatively widespread in the report, none of them have been applied to the Brazilian case. These expressions indicate a clear sense of seriousness and/or urgency, which should be duly taken into consideration by the social partners in drafting the long and short lists.

Conclusions

– By failing to take into account the application of Conventions in practice and in the national context, the observations of the experts, at best, are premature, and contradict the Committee’s own mandate. In addition, they propose a legally flawed interpretation of Convention No. 98 that departs from the ordinary meaning of the text of the instrument.

– It also departs from consistent recommendations of the Committee on Freedom of Association and technical texts of the ILO itself.

– There is no reason whatsoever to assume, as suggested by the experts, that the new labour legislation in Brazil would discourage collective bargaining. Workers retain the ability and option, in a voluntary negotiation, to prefer legal provisions wherever they are deemed more favourable than the terms proposed by the other party.

– Conversely, revising relevant articles of the Labour Code with the modifications introduced by the labour reform (or law 13467/2017), as the Committee suggests, would discourage negotiations, as it would allow the judiciary to review and annul collective agreements, as has happened recently, and significantly reduce the scope of what can be negotiated, which would have negative effects on the labour market.

– In fact, labour reform has consecrated a formula that reconciles free and voluntary negotiations with the protection of workers’ rights (many of them enshrined in our Constitution). It is worth noting that the very same principle (prevalence of negotiation over legislation), as introduced in the Labour Code, had also been a claim by metalworkers’ unions in the state of São Paulo in 2011, in proposing the Collective Bargaining Agreement with Specific Purpose (ACE).

– By providing legal certainty and reliability to collective bargaining, without unprotecting workers, the labour reform effectively abides by and promotes Convention No. 98, in line with our international obligations.

– It is important to emphasize that in no way are workers unprotected under Brazilian new legislation. Labour unions can freely negotiate the issues that interest them and still remain covered by the provisions of the Labour Code in all other issues not negotiated or agreed to in collective bargaining. Brazil’s legal protection system and constitutional guarantees ensure a high level of protection in any scenario. Besides, the collective negotiation process itself ensures that the workers’ best interest is reflected on the final agreements: first, by the bargaining power of its union, which must be representative; by the legal requirement that the collective agreement be approved by a general assembly of the category and, finally, by the system of judicial control exercised by the Labour Prosecutor’s Office and the Labour Courts.

– Brazil has shown continuous willingness to foster social dialogue throughout and beyond the process leading to the adoption of the labour reform. In June 2017, the Ministry of Labour created the National Labour Council to discuss all pressing issues of the world of work, and from October onwards the standing orders of the Council were agreed to by tripartite constituency, rendering them fully operational.

– Finally, it is important to note that since the entry into force of the Brazilian labour reform, there have been a number of legal actions filed in the Supreme Court claiming the unconstitutionality of the new provisions, but none of them are related to the issues brought to the attention of the CEACR. Instead, most of them had to do with the end of trade union’s compulsory contribution.

– Brazil is ready to continue in conversation with social partners and civil society on all aspects of our legislation.

In addition, before the Committee, a Government representative, Minister of Labour, regretted that the case was being discussed for political considerations. That could have a negative impact on the quality of the system, and Brazil had always supported the strengthening of the ILO supervisory system. Brazil was a founding member of the ILO and had ratified 97 Conventions, 80 of which were in force. It was one of the States most exposed to the supervisory system. Its performance in the context of the ILO supervisory mechanisms was exemplary. Each year, the Government submitted all reports due, demonstrating the full implementation of the instruments ratified. In addition, the Tripartite Commission on International Relations, where ILO standards and their application were widely discussed, in full implementation of the social dialogue promoted by the Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144), met periodically. With all those credentials, and with no reason to justify the urgency of such an examination, it was difficult to understand why the Committee of Experts, not fulfilling its mandate to examine the application of ILO instruments in law and in practice, did not wait for the regular reporting cycle to examine Act No. 13.467/17. Concerning some important aspects, that law was examined prematurely a few days after its entry into force. The analysis was conducted with such excessive speed that the provisions of the legislation examined were swapped. Because the country had committed to the ILO and its system of standards supervision, the biased, partial and non-technical treatment of the case caused great discomfort. The ILO was captured in a political game that combined partisan motivations and corporatist interests. Workers were not impaired by Brazil’s modernization, but only those unions dependent on the State and lacking real commitment to workers. Out of the more than two dozen of “Direct Actions of Unconstitutionality” (judicial review proceedings) proposed in the Federal Supreme Court against several points of the reform, none dealt with the points analysed by the Committee of Experts. Two-thirds of them dealt with the end of the union tax, which was a very controversial measure not questioned by the Brazilian Unions in their submissions to the Committee of Experts. That measure brought Brazil closer to the practice of the vast majority of the countries in the world and promoted the autonomy and independence of trade unions, established in the Convention. He affirmed that questioning this measure would expose the fragility of the whole case raised by union confederations (centrais sindicais). The reform abolished a provision which was created in the 1940s by a government that wanted to keep trade unions under control. The Committee of Experts stated that the possibility, by means of collective bargaining, of derogations to the rights and protections afforded to workers by the labour legislation would discourage collective bargaining and would therefore be contrary to the objectives of the Convention. He regretted that the Committee of Experts seemed to have endorsed the political thesis that the reform would lead to precarious work. However, that could be possible only if trade unions would voluntarily agree to the terms of an agreement less favourable than the existing legal provisions; if labour inspection did not function; if labour judicial bodies did not exist; and if the Federal Constitution was torn apart. The Committee of Experts omitted to consider that trade unions were not obliged to agree to conditions less favourable than those defined by law. Negotiation without the possibility of reciprocal concessions, only conferring advantages to one party, would not offer the other party any incentive to negotiate. It was a basic principle of any negotiation to have concessions from each side. In a country like Brazil, with extremely broad and detailed labour legislation, restricting collective bargaining only to points not covered by legislation or above legal provisions would reduce their range and scope of application in an irrational way. That would be contrary to the Convention as it established that governments had to promote negotiations as comprehensively as possible, as recognized in the ILO Handbook on the subject and reaffirmed repeatedly in recurrent recommendations of the Committee on Freedom of Association. The Committee of Experts did not refer to a broad set of labour rights that had been granted constitutional protection in the Brazilian legal system and could not be revoked by any reform, not even by a constitutional reform. Those rights were included in Act No. 13.467/2017. Eighty ILO Conventions in force were part of the legal system in Brazil and were not affected by the reform. In the General Survey of 2018, the Committee of Experts recognized that constitutional protection guaranteed to those rights in Brazil was an example to emulate. Those rights were not subject to derogation and had been expressly excluded from the possibility of any negotiation. That proved that the aim of the reform was not to revoke any right but, by consolidating them, to guarantee as much space as possible for collective bargaining, thus implementing the Convention more effectively. The Committee neglected to mention that, in the past, it was common that the judiciary in Brazil would make void labour clauses of collective agreements or entire agreements, without any objective legal reasoning. That created legal uncertainty and discouraged collective bargaining. Collective bargaining could be effectively fostered, as advocated by the ILO, only by granting force of law to collective bargaining and protecting the autonomy of the parties, through the primacy of the negotiated over the legislated. It was surprising that union leaders questioned that point, since the law incorporated a proposal originally made in 2011 by one of the largest and strongest unions in the country, the ABC metalworkers union of São Paolo. It was alleged that the primacy of the negotiated over the legislated opened the possibility for unions to negotiate to the disadvantage of the workers. However, that was not the experience of collective bargaining in Brazil. Studies showed that in 2016, the year of a strong economic crisis, in more than half of the collective agreements, unions negotiated wage increases above inflation, while the vast majority succeeded in securing job preservation at a time when layoffs were high. Trade unions in Brazil had already integrated the provisions contained in the new legislation into their collective agreements. Collective bargaining had not been discouraged with the new legislation. He stated that when practical analysis belied the theories that best served political interests, some deemed best to ignore practice and cling to theories. In addition to the constitutional guarantees, workers were protected by the system of registration of collective agreements by the Ministry of Labour, which required proof that the agreement was approved by a representative assembly of the category; by the labour inspection system, composed of professionals able to identify and administratively combat fraud and violations; by the labour prosecutor’s office, a unique institution that could bring a lawsuit when it perceived non-compliance with legal precepts, as it had done; and by the labour judicial system, with specialized professionals who, in 2017, before the new law entered into force, received more than 4 million new lawsuits. The Committee of Experts did not mention that in Brazil there were 17,509 registered union entities and many had done very little for their constituency. It was not difficult to understand why there were so many, differently from the rest of the world. Since it benefited from a mandatory tax, in order to exist a union did not have to be representative or defend the workers’ interests. The income guaranteed by the State, which in 2017 reached more than 4 billion reais (or US$1.25 billion), provided a sufficient reason for its existence, in a clear distortion of the values that should guide and justify workers’ organizations. Labour reform ended the state of affairs while unions would have to work much more and workers and employers as a whole would benefit. For that reason, the same reform that favoured collective bargaining, also promoted union independence, which was at the heart of the Convention.

It was clear that there were no technical reasons why the case of Brazil should be examined by the Committee at this time and it was regrettable that the ILO had been politically manipulated. This was possible through political bargaining kept in secret rather than on technical merits. Hasty and technically flawed analyses could be sufficient to expose a country, if political interests so required, and force it to provide clarification to the Committee. In an election year, the process was described as inquisitorial in the Brazilian press, regardless of the country’s commitment to fulfilling its obligations. Such a system did not meet the demands and challenges of the world of work, nor the expectations placed in the ILO. With the ILO approaching its first centenary, the time had come to reform the system so as to make it more consistent with the world of work and with democratic and inclusive principles, such as the due process of law, which was required of all agencies of the UN system. For many years, GRULAC had denounced this state of affairs and had been solemnly ignored. The time had come to start listening, because otherwise the system of standards supervision would run the grave risk of losing credibility, and thereby become irrelevant. In a tripartite organization, it was astonishing that there was nothing tripartite in the regular system of standards supervision. Unlike other agencies, governments had no role in the selection of the Committee of Experts’ members or in the definition of working methods. Unlike other agencies, there was no real universal method of supervision. It was always the same group of countries that allegedly failed to respect commitments. That situation privileged selectivity against transparency and universality. He reiterated the lack of consensus in the current working methods of the Committee. If the level of compliance and support for ILO instruments was to be increased, the perspectives of governments had to be included in selecting the lists of cases, to meet technical criteria; in the drafting of conclusions, to be effectively implemented; and in working methods in general, to be honoured. The composition of the Committee of Experts had to be revised to reflect the diversity and technical quality expected. The criteria for selecting the lists of cases to examine had to be re-examined in order to ensure that decisions were exclusively of a technical nature. Brazil had a keen interest in continuing the debate with the social actors in order to improve its labour legislation and it was prepared to do so. He expressed its continuous commitment to the obligations undertaken with the ILO and reiterated that the modernization of the legislation did not violate any Convention. On the contrary, Act No. 13.467/2017 promoted and strengthened collective bargaining, giving full effect to the Convention. He urged a profound change in the supervisory system before it was too late and expressed the readiness of his Government to participate in good faith in a collective effort to improve the supervisory system for all.

The Worker members noted that it was the first time in 20 years that the Committee was discussing the application of the Convention in Brazil. Noting that the country had been on a steady path towards social progress and a global leader in this regard, they were therefore deeply disappointed by the regressive legislative steps undertaken, which would have the effect of dismantling collective bargaining rights and the strong industrial relations tradition built over the past two decades. In 2016, Brazilian trade unions had already transmitted information to the Committee of Experts to report the severe shortcomings and flaws of the bills which were before Congress at that time. Considering that the introduction of a general possibility of lowering through collective bargaining the protection established for workers in the legislation would have a strong dissuasive effect on the exercise of the right to collective bargaining and could contribute to undermining its legitimacy in the long term, the Committee of Experts had requested the Government to take these comments into account during the examination of the bills. Even if it had not discussed by the Conference Committee in 2017, Brazil had been listed on the preliminary list of cases. Despite these warning signals, the Government had adopted the problematic amendments on 13 July 2017, without taking into account the comments of the Committee of Experts. Both social partners had provided their views on the legislative reform, which was passed before the 2017 session of the Committee of Experts. The Worker members therefore did not agree that this case, which had a history within the supervisory system, had been dealt with prematurely by the Committee of Experts. They also strongly disagreed with the criticism related to the treatment of the case outside of the regular reporting cycle. Recalling that the criteria for breaking the reporting cycle were reproduced every year in the General Report of the Committee of Experts, they considered that the case of Brazil met the criteria that observations referring to legislative proposals or draft laws may be examined by that Committee even in the absence of a reply from the Government. The development of a mechanism to break the reporting cycle enjoyed tripartite support. It had been introduced as a safeguard when the Governing Body had extended the reporting cycle for certain types of Conventions to ensure that effective supervision of the application of ratified Conventions was maintained. They would never accept that an individual case would be used to attack the well-recognized and supported impartiality and independence of the Committee of Experts. The Worker members were deeply concerned that the far-reaching legislative amendments, which were introduced hastily and without prior genuine and meaningful consultation, would effectively result in the dismantling of the collective bargaining framework in Brazil and undermine the rights of workers. With reference to the Government’s statement that the legislation had been elaborated after a series of debates organized by the Government in December 2016, with the participation of representatives of trade unions and employers, they wished to remind the Government that “debates” could not be a substitute for genuine and effective consultations and that the most representative trade unions were not part of these debates. Moreover, the draft Bill had only seven articles at that time, whereas the law, as enacted, was very extensive, with more than 100 articles. In addition, the Labour Relations Council, which was the official tripartite body where ILO matters were discussed, had not been convened after April 2016. When the new National Labour Council was created on 1 June 2017, the Bill had already been approved in the lower house.

They considered that the amendments ran counter to the objective and spirit of the Convention. New section 611A of the Consolidation of Labour Laws (CLT), which established as a general principle that collective agreements prevailed over the legislation and that collective agreements, negotiated by workplace delegations at the enterprise level, prevailed over collective agreements, made it possible through collective bargaining not to give effect to the protective provisions of the legislation. While Act No. 13.467/2017 contained a list of subjects in respect of which collective bargaining prevailed over the law, that list included many aspects of the employment relationship, such as working-time arrangements. Since that list was merely illustrative, it could be broadly extended by the parties. The sole limit to these deviations was a closed list of rights referred to in section 611B, which contained 30 rights, enshrined in article 7 of the Federal Constitution of Brazil. Moreover, section 611A specified that the absence of compensatory measures was not a reason for the clauses of collective agreements to be found void, even where they derogated from the rights set out in the law. The Worker members wished to recall that the overall aim of Article 4 of the Convention was the promotion of good faith collective bargaining with a view to reaching an agreement on terms and conditions of employment that were more favourable than those envisaged in law. By allowing for less favourable derogations in collective agreements on virtually all subjects of the employment relationship, the Government deprived workers of their fundamental right to collective bargaining and failed to ensure the effective realization of a minimum set of rights which would apply equally to all workers in Brazil. Moreover, new section 444 of the CLT, which stated that workers who had a higher education diploma and received a wage that was at least two times higher than the ceiling for benefits from the general social security scheme may agree to derogate from the provisions of the legislation and collective agreements in their individual contracts of employment, was not in conformity with Article 4 of the Convention and with the Collective Agreements Recommendation, 1951 (No. 91), which laid down the principle of the binding effects of collective agreements and their primacy over individual contracts of employment where the latter were less favourable. In addition, by expanding the definition of autonomous workers who did not enjoy the right to organize and bargain collectively to include workers who were engaged exclusively and permanently for an enterprise, new section 442B of the CLT diluted the collective representation of workers through misclassification. The Worker members were deeply concerned by the profound and broad-reaching changes implemented by the legislative reform which eroded collective bargaining rights previously guaranteed to workers. With reference to the Government’s argument that the reform had been necessary due to the overall context of economic recession, they noted that even though the number of collective agreements had decreased by 29 per cent since the adoption of the reform, the economic situation in the country had not improved. Unemployment and the informality rate had even risen. No country had ever achieved sustainable economic progress by depriving workers of their fundamental rights. Reiterating their deep concern with the retrograde practices in a country which used to be championing fundamental rights at work, they called on the Government to urgently take the necessary steps in order to reform the legislation and to bring it into line with the Convention before any further harm was inflicted on the workers of Brazil.

The Employer members expressed concern with the observation adopted by the Committee of Experts on the application of the Convention by Brazil. While recognizing the authority of the Committee of Experts to examine a situation outside of the regular reporting cycle, in exceptional cases, they were concerned with the exercise of this discretion in the present case. While one national trade union had criticized the labour reform, the national employers’ organization had sent information to express satisfaction at the modernization of the outdated labour relations system. Moreover, despite the fact that it had not received a response from the Government to the diverging opinions of the social partners, the Committee of Experts had adopted an observation, only a few days after the labour law reform had come into effect. In addition, 2017 had not been a reporting year on the Convention for Brazil, which was up to date with its reporting obligations. In view of the lack of information on the position of the Government, a direct request might have been the more appropriate first step in the examination of the situation. In view of the sensitivity of the case, they regretted that its discussion by the Conference Committee was based on incomplete information. The Committee was therefore not in a position to examine the case in a proper and balanced manner. Examining the case in the regular cycle would have allowed a comprehensive evaluation of the impact of the reforms on the application of the Convention, both in law and in practice. The Employer members had taken careful note of the Government’s statement. Additional information was necessary to fully understand the labour law reform.

The Employer members noted that the labour law reform established as a general principle that collective agreements prevailed over national legislation, except for the constitutional rights referred to in section 611B of the CLT. In that respect, the Committee of Experts had observed that the general objective of the Convention was to promote collective bargaining with a view to agreeing on terms and conditions of employment that were more favourable than those already established by law. The Employer members recalled the requirements of Article 4 of the Convention which provided that member States must take measures to encourage and promote the full development and utilization of machinery for voluntary negotiation between employers or employers’ organizations and workers’ organizations, with a view to the regulation of terms and conditions of employment by means of collective agreements. In their view, there was no absolute requirement that the outcome of collective bargaining must be on terms and conditions that would be more favourable than those established by law. A mechanism that allowed for the prevailing effect of collective agreements promoted in law the principle of collective bargaining. It might create an incentive for additional voluntary collective bargaining. It was not yet possible to analyse the effect of the system in practice and therefore not possible to know at this stage whether this mechanism would undermine the principle of collective bargaining. In order to allow a complete examination of the conformity of the reform with the Convention, the Employer members encouraged the Government to provide information in its next report on the operation of sections 611A and 611B of the CLT, in law and in practice. The analysis must take into account the extensive rights of workers enshrined in the Constitution and referred to in section 611B which concerned 30 areas of protection, including the right to unemployment insurance, minimum wage, paid weekly rest and vacation, maternity and paternity leave, occupational safety and health and freedom of association. It was of concern that the full list of protected rights was not included in the observation adopted by the Committee of Experts. With respect to the issue of the relationship between individual contracts of employment and collective agreements, the Committee of Experts had noted that workers who had a higher education diploma and received a wage that was at least two times higher than the ceiling for benefits from the general social security would be able to derogate from the provisions of the legislation and collective agreements and accords in their individual contracts of employment. In that respect, the Employer members noted that it was not possible to have a full and informed discussion on the impact of such a provision in law and practice and to assess compliance with the Convention without further information from the Government and the social partners. In their view, the issue of the prevalence of individual contracts over the national legislation was not within the scope of application of the Convention. Finally, regarding the extension of the definition of autonomous workers and its effect on the exclusion of workers from trade union rights, they noted that it was not possible to have a full and informed discussion without appropriate information and requested the Government to send its comments on the observations from the trade unions for examination by the Committee of Experts.

The Worker member of Brazil, speaking on behalf of the Brazilian trade union associations, congratulated the Committee of Experts on the quality of its work, which had made it an unmistakable point of reference in discussions on labour relations. He maintained that the technical knowledge and impartiality of the Committee of Experts should not be called into question merely because their comments were unfavourable to a particular side. The function of the Committee of Experts was vital in guiding debates and creating the necessary balance within the Organization; as such, attacks on the Committee of Experts were tantamount to an attack on the Organization itself. The seriousness of the violations engendered by Act No. 13.467 was reflected in the stern comments of the Committee of Experts. The new legislation constituted the most serious attack on workers’ trade union rights in the entire history of Brazil. The discussion in the Conference Committee was not new, as in 2001 the Government had attempted to pass an act that would enable the rights provided in law to be restricted through collective bargaining. In 2002, in reply to a query from the CUT of Brazil, the International Labour Standards Department of the ILO had confirmed that making it possible to disregard the rights laid down in law through collective bargaining breached Conventions Nos 98 and 154. The process that had culminated in the adoption of the Labour Reform of July 2017 had been notable for the utter failure to consult either workers’ representatives or representatives of other sectors involved in the world of work, such as the National Association of Labour Judges, the Office of the Public Prosecutor for Labour Law or the Association of Labour Lawyers. The new Act furthered the general weakening of the whole system of worker protection, undermining freedom of association and the right of workers to use legal channels to present their claims and imposing a heavy financial burden on those who did so. In that regard, he condemned any practice intended to persecute labour magistrates who, in applying the new Act, had followed a different legal approach. On the pretext of modernizing labour relations, the new Act represented a return to a judicial position that had been superseded many years previously. That position was based on entirely free bargaining and assumed that the parties in labour relations enjoyed the same bargaining power. The backward step became obvious if one bore in mind that the Act allowed individual bargaining to derogate from the application of collective agreements, in violation of Article 4 of the Convention. Furthermore, on the grounds of tackling informal work, the new Act legalized various forms of precarious work and allowed pregnant women and breastfeeding mothers to work in unhealthy workplaces. The reform had not only failed to create the promised jobs, it had actually resulted in higher rates of unemployment. When the Act had come into force, the unemployment rate had stood at 12.2 per cent; by April 2018, however, according to data from the Official Institute of the Brazilian State (IBGE), it was 13.1 per cent, equivalent to 13.7 million people out of work. If that figure was combined with the number of potential workers who had stopped looking for work (7.8 million) and the number of people underemployed (6.2 million), it gave a total of 27.7 million Brazilians outside the labour market (24.7 per cent of the economically active population). The Government’s stance – that the new Act helped to promote collective bargaining – was far removed from reality. A study by the Economic Research Institute of the University of São Paulo had observed a fall of 34 per cent in the number of collective agreements signed in the first few months of 2018. Under the new Act, collective bargaining took precedence over legislation, including when better conditions were provided in law; an enterprise agreement took precedence over collective agreements, and individual agreements could exclude workers from the protection offered by existing agreements, in clear breach of the Convention. The reform had hit trade unions hard, in that it had put an end to the existing funding model without offering any alternative. Union assemblies were also prevented from approving rates for dues and contributions to maintain their activities, again in breach of the Convention. It was impossible to strengthen collective bargaining by weakening trade unions. He concluded by requesting the repeal of the new Act, given that it took away rights, attacked trade unions, promoted individual bargaining at the expense of collective bargaining, and distanced the country from the Decent Work Agenda.

The Employer member of Brazil said that there was no legal basis to justify calling Brazil to appear before the Committee to provide clarifications regarding collective bargaining. In failing to observe the regular reporting cycle established for examining the Convention, the Committee of Experts had prejudged the application of it, on the basis of a superficial, abstract analysis of the new Act which took no account of the results of its specific application without being based on any data, or facts, in the quick manner from the text of a recent legislation (applied since only six months). Here the discussion was not technical but political and ideological. Brazil was one of the countries which had ratified the most ILO Conventions and where labour rights had constitutional status. Labour reform did not abolish or modify those labour rights. The new Act simply allowed workers and employers, if they so desired, to establish standards relating to work routines, which were valid for a set time. There were no grounds for claiming that, as a result of the reform, collective bargaining nullified the applicable legislation, particularly since the existing legislation had to be applied when no agreement was reached in collective bargaining. It was clear that Act No. 13.647, contrary to what had been claimed, did not undermine the Convention but strengthened its objectives in the framework of Brazilian labour legislation, ensuring that collective instruments could be adopted taking account of current working and production procedures, without interference from the State. In 2015, the Constitutional Court of Brazil recognized the key role of collective bargaining as a mechanism for adapting labour standards to different sectors of the economy and economic situations. In that regard, the labour reform simply confirmed the central objective of the Convention to promote voluntary negotiation, expressly providing that workers’ rights, as established in the Federal Constitution, could not be suppressed or reduced by means of negotiation. Such rights included those detailed by the Employer spokesperson. The new Act sought to establish an environment conducive to collective bargaining by providing the social partners with legal certainty so that they could renew dialogue on issues where negotiation was fraught with uncertainty since it often resulted in cancellation by the labour justice system, even though it was indeed the will of the parties. The workers had not suffered harm as a result of the reform, contrary to what was being claimed by certain unions who were calling for the restoration of the mandatory union tax without providing their members with the services due in return. Existing national remedies had not been used before turning to the ILO. Indeed, the trade union confederations had only gone to the Constitutional Court to demand the trade union tax and not to allege supposed violations of the Constitution or Convention. The labour reform was necessary to boost collective bargaining and modernize a law that dated back to the early 1940s. The new Act, which was the result of a democratic process involving numerous public hearings and the adoption in the National Congress by a large majority, did not undermine the Convention but protected collective bargaining from external interference; it consolidated an effective mechanism for tackling economic problems; it harmonized the legislation with that of other ILO member States and sought to achieve a balance between freedom of negotiation and the principle of worker protection. It was a matter for concern that the ILO could consider that negotiation was only valid if it contained terms and conditions of employment more favourable than those established by the law, in particular because such a notion resulted from a broad interpretation of the Convention, which, if adopted, would end up being binding on all 165 countries that had ratified the instrument. Any changes to the rules of the game established by the Convention should not be permitted. Recalling that only a few years ago his country was regarded as a benchmark for the Committee, he trusted that impartiality and the institutional role of the ILO would prevail in the discussion of the case, on the basis of tripartism and the absence of any political or ideological interests, and requested that in its Conclusions, the Committee took into consideration that collective bargaining should be free and spontaneous, as proposed in the text of the Convention.

The Government member of Paraguay, speaking on behalf of a significant majority of the group of Latin American and Caribbean countries (GRULAC), reiterated her deep concern regarding the working methods adopted by the Conference Committee, which did not involve tripartite consensus. Furthermore, several aspects of the Committee of Experts’ comments raised questions. With regard to the interruption of the regular cycle, in which no report had been produced by the Government, she considered that the existence of criteria in that regard illustrated the need to justify the decision to break the cycle. Referring to the mandate of the Committee of Experts reflected in its General Survey, which indicated that the opinions of the Committee of Experts were not binding and which took into account the application of the Conventions “in law and practice …, while cognizant of different national realities and legal systems”, she expressed regret that, in the case of Brazil, sufficient time had not been granted to evaluate the complexity of the labour reform, which should be examined in its entirety and in terms of its practical repercussions and its interpretation by the courts. In that regard, no consideration had been given to the extensive role of the labour rights contained in the Brazilian Federal Constitution. In the case of Brazil, it was necessary to take into account not only the Constitution but also the specialized system of labour justice, including the labour inspectorate, which was independent of the Government, the fact that labour inspection personnel had the status of employees with state careers, and the maintenance of the framework of the CLT. She reiterated her commitment to promoting collective bargaining and to upholding the principle contained in Article 4 of the Convention. The ordinary meaning of the Article was clear, including the reference to “national conditions”.

The Government member of Panama drew attention to the model for tripartite social dialogue roundtables set up in the country to harmonize the legal system with the ILO Conventions and Recommendations. He also emphasized the crucial nature of the technical assistance provided by the ILO International Labour Standards Department. However, he noted with concern the regulatory methods used to determine the inclusion of Brazil in the list of cases to be examined by the Conference Committee, such as the fact that the Committee of Experts had broken the normal cycle and made comments without receiving a report from the Government. Reaffirming the Government’s commitment to the supervisory bodies, he highlighted the need to adopt working methods that had been duly agreed by all constituents.

The Worker member of Portugal considered that the labour legislation reform adopted by the Brazilian Government followed the matrix of reforms that had occurred in Spain, Portugal and Greece which, since 2009, had led to social regression for workers in southern Europe to levels of several decades earlier. Under the pretext of making labour relations more flexible, increasing employment, ending labour market fragmentation and enhancing collective bargaining, the “troika”, consisting of the International Monetary Fund (IMF), the European Commission (EC), the European Central Bank (ECB), and the Governments had imposed labour law reforms on workers, allowing for collective bargaining to be carried out by informal organizations, eliminating the principle of favourability, increasing hours of work and lowering overtime pay. Such changes had had dire consequences for workers, with labour incomes dropping, unemployment rates reaching figures never seen before, rising from under 10 per cent to over 20 per cent in less than two years, forcing hundreds of thousands of workers, mainly young people, to look for work in other countries. He thus considered that the central objective of these labour legislation reforms had been to cut workers’ and pensioners’ incomes. The reform that was being imposed on the Brazilian workers followed the same matrix, grounds and aims. By mandating that an individual contract of employment could stipulate lower terms and conditions than those set by law or by collective agreements; by permitting that collective bargaining could be engaged in without the participation of trade unions; and by allowing the development of precarious employment relations, the labour reform would lead to an increase in precarious work and to labour market segmentation, instead of combating them. The Government’s labour reform undermined workers’ fundamental rights enshrined in the ILO core Conventions and was in violation of the Convention, since it allowed for collective bargaining without the participation of trade unions and to set aside collective labour agreements by individual contracts. He therefore urged the Government to accept ILO technical assistance to align labour legislation with the international instruments to which they were bound and to respect the indispensable role of the Committee of Experts in ensuring that ILO Conventions were effective.

The Government member of India appreciated the efforts and the positive steps taken by the Government to reform its labour laws with a view to providing legal certainty and reliability to collective bargaining, in consultation with the social partners and in accordance with the Constitution of the country and its international obligations. Countries should not be included in the preliminary or final list of cases before the end of the reporting cycle and without following due process and for other reasons than the technical merits of a case. A genuine and constructive tripartism was sine qua non for an effective and credible ILO supervisory mechanism. In fulfilling its labour-related obligations, the Committee should fully support the Government.

The Worker member of Italy stated that the Government had been implementing a series of reforms in Act No. 13.467/2017 in breach of fundamental principles of the ILO. No consultation with the social partners had been held, no public debate had accompanied the discussion and the Act, which took away the set of existing guarantee, had been approved in record time. Neoliberal policies enacted in a unilateral way had the effect of job insecurity and precariousness. The so-called “innovation” had only entailed the worsening of working conditions and the denial of trade union rights, undermining collective bargaining mechanisms. Act No. 13.467/2017 allowed for collective agreements to worsen the conditions provided for in the law. For millions of Brazilian workers the reforms meant an increase in inequality in one of the most unequal industrialized countries. The criteria and procedure for breaking the reporting cycle of the examination of cases by the Committee of Experts provided for safeguards to ensure the effective supervision of the application of ratified Conventions. That possibility not only strengthened the supervisory system of the ILO, but also ensured that time-sensitive issues, including matters of life and death or fundamental human rights were appropriately addressed. She urged the Government to amend the legislation so as to bring it into line with the Convention.

The Government member of the Russian Federation welcomed the information provided by the Government representative on the merits of the issue, as well as on its procedural aspects. The speaker shared many of the concerns expressed, in particular in relation to the decision to examine this case outside of the regular reporting cycle. Additional explanations regarding the reasons for that decision were needed. When considering the implementation of ILO Conventions, it was important to take into account both law enforcement practice and the general context conditioned by the peculiarities of the legal system of the country concerned. Since the reform had just been adopted, it was necessary to give the Government time to work before making unambiguous conclusions. The speaker believed that there was room for improvement in the working methods of the Committee. The concrete proposals made in this respect deserved a comprehensive study. Given that the Committee was central to ensuring consistent and strict compliance with international labour standards, it must rely on the full trust of governments, workers and employers.

The Worker member of Pakistan recalled that the mandate of the Committee of Experts was clearly spelt out in its General Report. It was vital for the Conference Committee to recall that the legitimacy and rationality of the Committee of Experts’ work was based on its impartiality, experience and expertise. It was on that basis that over the years, exceptional cases had been identified and the reporting cycle broken, when allegations had been sufficiently substantiated and there was an urgent need to address the situation. In addition, observations referring to legislative proposals or draft laws could be examined by the Committee of Experts in the absence of a reply from the Government when it could be of assistance to the country. Therefore, the speaker considered that the Committee of Experts had acted within its mandate and in line with the criteria for breaking the reporting cycle, as the right to organize and to bargain collectively was a fundamental human right that risked being eroded by the enactment of Act No. 13.467/2017.

The Employer member of Colombia noted that the labour reform in Brazil was a product of extensive discussions carried out with the social partners over more than 20 years. It was a question of regulations adopted to improve labour relations in Brazil, as the legislation was aligned with new realities, always on the basis of collective bargaining. The labour reform aimed to establish more favourable conditions for competitiveness, productivity and socio-economic development, while ensuring respect for fundamental labour rights and decent work. He considered that the impact of the reform had been assessed prematurely; a reasonable timeframe for implementation was necessary to reach accurate and substantive conclusions. The Brazilian labour reform did not authorize the repeal of labour legislation through collective bargaining, as had been reported. The changes focused on securing both the outcome of agreements between workers and employers and the scope of collective bargaining. The new labour regulations did not deprive workers of their labour rights and guarantees and did not breach Convention No. 98 or Convention No. 154. The existing labour legislation protected collective bargaining, consolidated an effective and much-needed mechanism to tackle economic problems and provided employers and workers with better opportunities to negotiate, without violating the labour rights enshrined in the Constitution. With regard to the regulation of autonomous employment, the speaker noted that the new legislation clearly defined who were considered autonomous workers as well as the criteria for identifying them. Self-employed or autonomous workers were governed by different standards to those of employees but in both categories decent work was a requirement. The fact that autonomous workers were not in an employment relationship and were therefore not covered by labour legislation did not mean that trade union rights were restricted.

The Worker member of Argentina noted that, according to a recent study submitted to the United Nations Human Rights Council, over 130 countries had introduced pro-austerity policy reforms and labour standards in recent years, and the deregulation of the labour market did not favour growth or employment. Conversely, a growing number of studies confirmed that labour standards had a positive economic impact on both productivity and innovation. The labour reform in Brazil made outsourcing and subcontracting more widespread. It therefore reduced wages, weakened trade unions and collective bargaining, and favoured major multinational corporations. Increased informality and precariousness led to greater inequality. The new legislation abolished the concept of the working day by creating intermittent work; eliminated remedies available to workers to file complaints before the labour courts; allowed for pregnant women to be employed in insalubrious working conditions; and eliminated funding for trade unions, which had a serious impact on the existence of unions and of collective bargaining. By prescribing “negotiations” between employers and workers, without the presence of a trade union, it allowed for the imposition of inferior conditions to those of a collective agreement. Furthermore, the new Act represented an attack on the core standards of the ILO and was a regressive measure that could not be considered as an acceptable response to the economic and financial crises. It was necessary to create sustainable economies, with social protection, secure jobs and decent salaries both in Brazil and throughout the entire American continent.

The Government member of Honduras expressed his concern at the interruption of the regular reporting cycle. He trusted that the Government would make progress in fostering collective bargaining through the adoption of the appropriate measures to allow for the use of free and voluntary bargaining processes and collective agreements that regulated conditions of work.

The Worker member of the United States, speaking also on behalf of the Worker member of Canada, stated that stable labour market institutions, social dialogue and collective bargaining were being dismantled in Brazil. In November 2017, the amendments to the CLT had come into force reducing workers’ capacity to defend their rights and to negotiate improved wages and conditions. The changes permitted unions and individuals to negotiate agreements that lowered wages and conditions while increasing precarious work. Contrary to the concept of collective bargaining, employers and workers could negotiate agreements that lowered standards below what was provided for in legislation. As indicated in the report of the Committee of Experts, Act No. 13.467/2017 was not based on negotiation, but on the abdication of rights on a wide range of issues. The changes to the CLT had created a new category of exclusive autonomous workers and denied an employment relationship even when a worker had been engaged exclusively and permanently by one firm. Such workers were denied freedom of association and collective bargaining rights, and this had resulted in atomized labour relations. The first three months of the new regime had seen a nearly 3,000 per cent increase in the number of stable employment relationships dissolved, mostly concerning low-wage positions held by workers without the higher education supposed to afford them greater individual bargaining power. The changes opened more workers to precarious work and unions would no longer receive a stable contribution from those they represented. In March 2018, unions had received approximately 20 per cent of what they had in March 2017. In the first quarter of 2018, the total number of collective agreements had fallen by 29 per cent over the same period in 2017. In 2018, there had been 1,000 fewer collective agreements than there had been over the six previous years. Unemployment, informality and precarious work had increased in the same period. Brazil was experiencing extreme polarization exacerbated by the deliberate dismantling of social dialogue and mature industrial relations. Labour law reform should not mean abandoning ILO standards. A different path could lead to broadly shared income growth and progress.

The Government member of Bangladesh commended the Government of Brazil for holding a series of discussions with the representatives of trade unions and employers in reforming the CLT that had entered into force in November 2017. Inclusive, comprehensive and extensive consultation with the social partners was key in reforming any legislation concerning labour rights. One of the main aspects of labour reform in Brazil was the strengthening of collective agreements between unions and employers aimed at the possibility for each to negotiate collectively without affecting the rights of workers. Additional time was needed for understanding the impact of the law on the labour market, as it was still in its initial stage of implementation. He supported the view that the reporting cycle should not be broken and comments issued before a report was due and submitted, and agreed with the Government representative’s statement with regard to the reform of the ILO supervisory mechanism. He concluded by underlining the importance of objectivity, transparency, neutrality and impartiality in the work of the Committee through the use of tripartism in all decision-making processes, including for the establishment of the final list of cases and the consideration of conclusions.

The Worker member of the United Kingdom stated that the labour law reforms adopted in Brazil in July 2017 were in contravention of the Convention. The reform had deregulated more than 120 labour standards, including safeguards protecting pregnant women from working with toxic substances, rules on dismissal and equal pay laws. It had also dismantled the collective bargaining system, including by permitting collective agreements to displace statutory standards. The stated goal of the reforms had been to increase flexibility, reduce unemployment and regularize the informal economy. However, unemployment levels in Brazil had remained high with a growing informal economy and a rise in precarious forms of work. Workers in insecure work were deterred from joining trade unions for fear of victimization or job loss. The reforms had also permitted educated workers to enter into individualized contracts which opted out of collectively agreed pay and conditions. As the Committee of Experts had noted, that was a clear violation of the Convention. The speaker called on the Government of Brazil to reform its national legislation and to restore trade union rights, in line with the Convention.

The Government member of Mexico noted with interest the extensive consultation process that had led to the adoption of a legislative reform seeking to provide more flexibility, higher labour productivity, legal certainty and rationality in both the labour market and the legal system. Highlighting his concern regarding the unwarranted break in the regular reporting cycle, he considered that the reform processes needed to be evaluated holistically, taking into account the context in which they were developed and other practical measures that contributed to the development of an effective legal framework aligned with fundamental principles and rights.

The Worker member of Colombia stated that the reform delegitimized the objective of collective bargaining, which was to improve working conditions, by allowing collective agreements or accords to undermine the minimum standards established by law. The restriction on the duration of collective agreements or accords to a maximum of two years, in accordance with section 614 of the new provisions, and the prohibition of the continued legal effect of agreements and accords, curtailed the parties’ scope of action and contravened the Convention. He strongly rejected the possibility for workers to negotiate working conditions outside of collective bargaining or agree to being excluded from the application of agreements or conventions, either individually or collectively, without the participation of trade unions.

Another Worker member of Colombia expressed deep regret at the Government’s non-observance of the Convention and voiced his solidarity with the Brazilian trade union confederations.

The Government member of China shared the concerns expressed regarding the working methods of the Committee. The Committee was at the heart of the ILO supervisory system and its working methods could be improved. There was a lack of transparency in the selection of individual cases, which should be based on objective, fair and transparent criteria, and not on political considerations, in compliance with the established ILO procedures. Governments that were required to appear before the Committee should be informed of the final list in advance, in order to have ample time to prepare. The recommendations made by the Committee should reflect tripartite consensus. Governments should fully enjoy the right to information and the right to participate in the process of examining individual cases. Further, capacity building and technical assistance should be provided by the ILO to the Government concerned.

The Worker member of Paraguay drew attention to the fact that the labour reform in Brazil made work more precarious, weakened collective bargaining and social dialogue and attacked the trade union movement. The reform had been approved during one of the worst moments of political and institutional crisis in Brazil’s history, without dialogue with the workers and trade unions. It would result in the business community being able to carry out mass dismissals, without needing to hold discussions with the trade union. As well as limiting trade union representation, the reform deprived the Brazilian trade union movement of its principal sources of funding. Recalling that in recent years the Brazilian trade union confederations had been denouncing anti-union practices and the proposed reforms that had recently been implemented, he expressed his support for the discussion on this case of violation of the Convention.

The Worker member of Uruguay expressed his solidarity with the Brazilian trade union confederations regarding the effects of the new Act, which had increased unemployment and poverty and had led to a decline in living conditions in the country. Regarding the need to wait for the Government to send its report, he maintained that the need to comply with the provisions of the Convention was more important than the reporting obligation. In the Southern Cone region, the MERCOSUR Social and Labour Declaration, a tripartite tool that protected workers’ rights, had been concluded following extensive debates between the social partners but the labour reform in Brazil sought to impose formulas from the 1990s to deregulate labour relations.

An observer representing the World Organization of Workers (WOW) indicated that the Brazilian labour reform violated the right to organize, as established in the Brazilian Constitution and in Articles 3 and 4 of the Convention. The labour reform regulated employment contracts between workers and employers on an individual and private basis, without the participation of trade unions, which made workers vulnerable and put them in an extremely dangerous situation. Such disregard for trade unions and for collective bargaining allowed employers to carry out collective dismissals. In recent years, Brazilian worker organizations had been speaking out against anti-union practices. It could be a step backwards for trade unions as an institution worldwide if different countries were allowed to attack freedom of association and collective bargaining.

The Worker member of the Bolivarian Republic of Venezuela considered that the Brazilian labour reform, which permitted negotiations that undermined workers’ rights, was a step backwards because it left workers without protection and violated the Convention. It also allowed trade union membership to be terminated if the worker earned a wage that was at least two times higher than the ceiling for benefits from the general social security scheme. That could weaken the strength and unity of trade unions. In addition, the reform established the concept of an exclusively autonomous worker, which violated the right to organize and to collective bargaining.

The Employer member of Mexico emphasized that the ILO recognized collective bargaining as one of the main means of freely and voluntarily establishing labour conditions and other regulations through representatives appointed for the purpose. Collective bargaining was a binding instrument that placed an obligation on parties and ensured legal certainty. Unfortunately, before the labour reform in Brazil, collective agreements were continually subject to interference by the authorities which annulled them on a recurring basis. The labour reform recognized and gave priority to collective bargaining within the framework of the Constitution, which established several fundamental rights that were inalienable.

The Employer member of Guatemala thought that the new legislation responded to the need to strengthen collective bargaining, under the terms set out in Article 4 of the Convention. The fact that the workers’ rights enshrined in the Constitution were the basis for negotiation was a strong guarantee of protection. Before the new legislation had come into force, a Constitutional Court judgment had expressly acknowledged the important role of collective bargaining as a mechanism to adapt labour standards to different sectors of the economy and different economic conditions. He underlined the fact that, before the reform, government interference in the form of annulling terms agreed between the parties had been fiercely criticized and subject to complaints from Brazilian workers and employers. In 2011, a major trade union in Brazil had proposed the adoption of a collective agreement with the specific objective of ensuring that collective bargaining took precedence over the legislation. The reform allowed those who did not want to engage in collective bargaining to enjoy the protection of the legal system; those who did would have the opportunity to adapt legislation to better suit their circumstances, without prejudice to the considerable guarantees enshrined in the Constitution.

The Worker member of Chile pointed out that, in many aspects, Brazilian legislation on freedom of association had been exemplary before the adoption of Act No. 13.467. He noted with concern the recent Act reforming the CLT, which was affecting compliance with the Convention. He observed with great concern that, in the name of allegedly defending employment, investment and economic growth, the country had resorted to the classic formula of denying workers their rights, thus violating the provisions of the Convention. He recalled that inequality was the most significant challenge of the century and possibly in the history of humanity, and that collective bargaining, with strong trade union protagonists, could contribute to establishing a path towards equitable and comprehensive growth that would also allow for such inequality to be reduced. To that end, the Committee should urge the Government to comply with the Convention, by revising the aspects of Act No. 13.467 that were not in line with it, with the aim of promoting free and voluntary collective bargaining and sustainable development goals.

The Employer member of Spain said that the reform of Brazil’s labour legislation had highlighted the fact that collective negotiation took precedence over ordinary law, which, because it was so rigid, had left workers and employers very little room for manoeuvre prior to the reform, leading to many disputes. Modernizing labour law had strengthened collective bargaining, in line with the Convention. Enterprises and workers, represented by the unions, could negotiate and agree working conditions suited to the specific reality of different sectors, regions and enterprises. He emphasized that the law did not make collective bargaining compulsory; it was based on the independence and free will of the parties.

An observer representing the Latin American Association of Labour Lawyers highlighted the seriousness of the case and its importance for the effective enforcement of the ILO supervisory system. She emphasized the role of collective negotiation as a mechanism for redressing the inequalities present in the relationship between an employer and a worker. The need for international minimum standards was based on that premise. International standards were also a result of negotiation processes and took precedence over national law when it was less favourable to workers. The Brazilian labour reform that provided that individual agreements prevailed over collective agreements represented a serious and unacceptable regression in terms of social rights, which had an impact in many countries, including in Latin America.

The Employer member of Uruguay drew attention to the practice of initiating labour court proceedings in the region, which impaired collective bargaining and business management. The practice was bolstered by an inadequate legal framework. The Brazilian labour reform sought to find solutions in cases of abuse, giving assurance to all social partners on the implications of agreements.

The Government member of Egypt noted the information provided by the Government representative on measures taken to comply with the Convention. She welcomed the efforts made to strengthen its labour legislation and bolster collective bargaining. She called on the Government to pursue its efforts to fully respect the Convention, and to avail itself of ILO technical assistance in that respect.

The Employer member of Chile considered that the Committee of Experts had interrupted the reporting cycle without any explanation, in order to carry out a hurried evaluation of Act No. 13.467. It was clear that insufficient time had been allocated to evaluate the impact of the legislation in a serious and responsible manner. The comments of the Committee of Experts gave the Convention an interpretation that was not reflected in its Articles, as they considered that the general objective of promoting collective bargaining implied reaching an agreement on labour terms and conditions that were more favourable than those established in the legislation. Furthermore, such comments did not highlight the scope and detail of the labour rights provided for in the Brazilian Constitution, or all of the legal remedies available for workers to safeguard their rights. Article 4 of the Convention did not envisage any restriction on collective bargaining in the sense that it could only establish conditions that were more favourable than those laid down by the legislation. Quite to the contrary, it expressly provided for the possibility of adopting measures that were appropriate to national conditions. In a changing world, and in the face of new forms of employment, it was important for laws to safeguard the freedom of the parties to adapt to change and modernization.

The Government member of Angola, highlighting the ties of friendship between the two countries, supported Brazil’s statement and considered that the Brazilian delegation’s oral statement indicated that the Government had fulfilled its obligations.

The Employer member of Greece indicated that there had been a methodological error in the data on unemployment and informality in Brazil which had been referred to during the discussion. This was misleading the Committee. The relevant indicators released in May 2018 by the Brazilian Institute of Geography and Statistics made it clear that when the seasonality of economic activity was accounted for, the unemployment rate in Brazil had been reduced in 2018 as compared to the same period of 2017, since the unemployment rate was reduced by 0.7 per cent repeating the trend recorded in the mobile quarter from January to March 2018. Furthermore, it was too early for an assessment of the new legislation as it had still not been fully implemented. The speaker considered that the labour reform had potential for growth in formal and quality jobs.

An observer representing Public Services International (PSI) stated that she was also speaking on behalf of Education International (EI), IndustriALL Global Union and the International Transport Federation (ITF). The possibility, by means of collective bargaining, to derogate from statutory minimum rights breached the fundamental objective of the Convention, as well as Conventions Nos 151 and 154. The speaker rejected the Government’s assertion that the Committee of Experts had erred in its interpretation, and expressed support for that Committee’s interpretation of Article 4 of the Convention and its technical comments. The new section 611A of the CLT that allowed collective bargaining agreements to reduce the rights and protections afforded by labour legislation could have catastrophic consequences for workers and trade unions. In the aviation and maritime sectors, such derogations could interfere and reduce sector-specific safety standards, including protections derived from technical ILO Conventions. The safeguards contained in section 611B of the CLT were not sufficient. It was also possible that collective bargaining would derogate from the application of ILO Conventions. A recent decision by the Superior Labour Court had contradicted the claim that the reform was a modernization of the labour legislation aimed at strengthening negotiations and unions. The Court had recently ruled on the illegality of a strike of oil workers and established a substantial daily fine for unions that had failed to suspend the strike. That created a hostile environment that was not conducive to mature social dialogue. In December 2017, the President had vetoed Law No. 3831, regulating collective bargaining in the public administration, which was an affront to Brazilian civil servants, particularly as Brazil had ratified Convention No. 151. Law No. 3831 had been built by consensus in the bipartite Chamber of Government and Public Servants of the Ministry of Labour and Employment and had been approved unanimously in the Federal Senate and the Chamber of Deputies of Brazil. The labour reform also had direct consequences for the education sector relating to the privatization of secondary education and the minimum salary of teachers. Contrary to what had been indicated by the Employer member of Brazil, Act No. 13.467/2017 had not been preceded by a broad process of discussion. Brazilian trade unions had merely been informed of the proposed amendments. The ILO supervisory bodies had said that it was imperative that full and frank consultations take place on any question or proposed legislation affecting trade union and collective bargaining rights. Comprehensive labour law reform, in consultation with all social partners, was therefore necessary to bring the Brazil’s legislation into conformity with the Convention.

The Government representative appreciated the leadership, firmness and serenity of the Chairperson in conducting the work of the Committee and expressed his gratitude to the countries and speakers who had expressed their support to Brazil and to the importance of improving the supervisory system for greater predictability, transparency and real tripartism. The Government had come prepared to dialogue and had presented technical arguments to prove the full consistency of the labour reform with ILO standards. The discussion had reinforced the belief that the debate on the reform was premature and he reaffirmed his concern about the improper use of the mechanism to serve other purposes than the mandate and objectives of the Organization, which should remain technical, impartial and objective in order to keep its effectiveness and legitimacy. He then reacted to some of the points brought forward in the discussion, reiterating that the labour reform was the result of many years of discussions on labour market challenges in Brazil due to the shortcomings of the labour legislation and to the malfunction of the labour courts. Such discussions had become even more urgent, in a context of hard economic crisis in recent years. The year 2016 had witnessed the highest unemployment rate ever recorded since the beginning of the series, in 1992, and an 82 per cent increase in the unemployment rate since 2012. The crisis had not been generated by the Government, which could not be held responsible for it, but the reform was part of the solution and was already producing results. Between January and April 2018, more than 310,000 formal jobs had been created, the largest volume in the previous five years. Although statistics had been presented to criticize the modernization of labour in Brazil, when comparing the quarter from February to April 2018 with the same period from 2017, the unemployment rate had fallen 0.7 percentage points, repeating the trend recorded in the mobile quarter of January to March 2018, compared to the same quarter of 2017, when the reduction had been of 0.6 percentage points. He rejected claims that the reform made rights precarious. He affirmed that the reform was fighting informality, the worst form of precariousness, and allowed for new forms of employment with all the legal guarantees and constitutional rights, namely as it had increased by almost eight times the amount of the fine applied to companies failing to register their workers. With regard to article 444 of the CLT, the Committee of Experts’ observation had no grounds as the Convention did not refer to individual contracts; moreover, Act No. 13.467/2017 only foresaw the application of such provision in exceptional cases, for workers with a higher education degree and with incomes at least two times higher than the ceiling for benefits of social security. The legal provision aimed at stimulating negotiations to best address the particular situation of such workers, usually not foreseen in collective agreements. While the previous legislation had already allowed for the differential treatment of those workers, the labour reform had set objective criteria for ensuring the provision would only apply to those with negotiation capacity, without prejudice to their rights. The reform had not weakened the unions, as the union contribution had not been eliminated and could still be deducted with the agreement of the worker or company. To promote the independence of trade unions from state funding, in line with the Convention, the obligation of every worker to contribute to a trade union had been abolished, but Brazilian unions could still rely on other sources of financing permitted by law. He also rejected that the reform had taken place without consulting workers, as a series of debates had been organized by the previous Minister of Labour, who had met in December 2016 the six main trade union confederations (centrais sindicais) and representatives of the major employers’ confederations, to discuss the proposal prepared by the Ministry of Labour, which had subsequently been forwarded to the National Congress. During the legislative process in 2017, 17 public hearings, seven regional seminars and more than 40 meetings with interested stakeholders had been held in Parliament and in different States, leading to the approval of the Bill by a significant majority in Congress and later in the Senate. The labour reform Bill had received 1,340 amendments, one of the largest numbers in the entire history of the Brazilian Parliament. Of the 452 amendments accepted, 62 had been authored by opposition parliamentarians. Amendment number 150, which had been accepted, proposed the possibility to bargain collectively on daily hours of work, within the constitutional limits, the protection against unjustified dismissal in the event of reduction of hours of work and/or salary among other measures related to the strengthening of collective bargaining. The author of the amendment had underlined that it “resulted from the valuable contribution of the combative National Confederation of Commerce Workers (CNTC)”, demonstrating the effective participation and acceptance of suggestions from workers. With regard to representation in the workplace, it had been a historical demand of the Brazilian trade union movement, foreseen for nearly 30 years in article 11 of the Constitution and regulated by the labour reform, in line with the provisions of ILO Convention No. 135. Workers’ representatives in the company did not compete with the mandate of the unions. The number of collective agreements had been dropping since 2016, which suggested that it was more related to the effects of the economic crisis than to the labour reform. In addition, the same study quoted by the workers’ representative indicated that there had been a qualitative change in the agreements signed, which evidenced the expansion of the scope of bargaining and the concern to improve the representation at the workplace. Concerning pregnant women, the new rule had been designed to prevent discrimination in hiring women; it had been formulated by health workers’ unions and defended by the female Congressional Caucus, and guaranteed the protection of maternal and infant health. Regulatory Standard No. 15 had a broad definition of an unhealthy workplace which included, for example, hospitals and airports, and the rule remained the protection of pregnant women. A 12-hour working day was only permitted if followed by 36 hours of compulsory rest, which, at the end of the week and month, represented less hours worked with no reduction in wages. The Committee of Experts had also made a serious mistake by considering that the law excluded the possibility of independent contractors to form unions and engage in collective bargaining. That was provided for in article 511, which dealt with trade union organizations and had not been altered by the new law. The purpose of article 442B was simply greater conceptual clarity and certainty about the elements that characterized the employment relationship, in line with ILO Recommendation No. 198, and as defined by article 3 of the CLT, unchanged by the reform. The Government representative rejected the Committee of Experts’ comment that the Convention should apply to autonomous workers, since it did not provide a definition of “worker” for the purposes of application of the Convention, and the new legislation did not change the characterization of employment already present in the CLT. The Government had worked constructively and in respect for the common interest of all members of the Committee despite the shortcomings of the current process. He reiterated the call for all members to engage in an urgent, collective and effectively tripartite effort to reform the standards supervisory system.

The Employer members expressed appreciation for the detailed information provided by the Government representative, including with regard to the consultations that had taken place in connection with the labour law reform, and on the nature of the reform. Certain aspects of the discussion in the Committee had fallen outside the appropriate scope of the discussion on the application of the Convention. The Employer members were not able to conclude that Brazil was in violation of its obligations under the Convention as a result of the labour law reform. Modernizing labour law could be a difficult process leading to change and uncertainty. The discussion of the case had been premature. Article 4 of the Convention required the Government to encourage and promote voluntary negotiation between employers and workers’ organizations, with a view to the regulation of terms and conditions of employment by means of collective agreements. That obligation should guide the consideration given to the information provided by the Government. With respect to the labour law reform, a mechanism that allowed collective agreements to prevail over provisions of law could be seen as promoting collective bargaining in law, by extending the scope of collective bargaining while also ensuring that the floor of rights in the Constitution remained respected. It could not constitute a violation of the obligation to promote voluntary bargaining in law. There was also no information available to support the assertion that the reform constituted a violation of the Convention in practice. There had been no objective assessment of the impact of the reform on the labour market and on collective bargaining. Evidence was therefore required in order to assess the impact it had had on the social partners’ ability to engage in collective bargaining. The issue of the relationship between individual contracts and collective agreements could be further examined by taking into account the Employer members’ view that workers also had contractual freedom and could not be bound by a collective agreement against their will. The issue of an individual contract prevailing over national legislation was not within the scope of the application of the Convention. Certain other issues that had been raised during the discussion, such as maternity protection, were also not within the appropriate scope of the discussion. The Employer members encouraged the Government to provide information on the content and application of the labour law reform, in particular with respect to the extent to which the collective bargaining partners had made use of the possibility of negotiating collective agree which workers had made use of the possibility to adopt individual contracts prevailing over collective agreements. The Employer members noted the Government’s indication that the views of the Committee of Experts on autonomous or self-employed workers had been inaccurate. Accordingly, more information on the effect of the extension of the definition of an autonomous worker should be provided by the Government, as well as information on the impact it had had on the ability of those workers to represent their interests. The Employer members concluded by encouraging the Government’s continued commitment to international labour standards, in cooperation and consultation with the national workers’ and employers’ organizations.

The Worker members expressed their deep disappointment at the remarks of the Government representative describing trade unions as political instruments, which would had done little to advance the rights of workers. The right to freedom of association was a prerequisite for the right to organize and bargain collectively. Regarding remarks on the ability of the Committee of Experts to assess Brazilian legislation taking into account the context of the country, they recalled that members of the Committee of Experts were appointed by the ILO Governing Body and that they were eminent legal experts from all regions of the world. They reiterated their deep respect for the work of that Committee. They also recalled that document D.1 on the working methods of the Conference Committee had been adopted by unanimous tripartite consensus. Governments had ample opportunity to participate in the Conference Committee and to complement the information included in the report of the Committee of Experts. They stressed that, as recalled in the preparatory work to Convention No. 154, collective bargaining was a process intended to improve the protection of workers provided for by law. As recognized in the ILO Constitution, in the Declaration of Philadelphia, in the 1998 Declaration on Fundamental Principles and Rights at Work and in the 2008 Social Justice Declaration, collective bargaining contributed to the establishment of just and equitable working conditions and other benefits, and thereby to social peace. That could not mean going below statutory minimum protections. That principle was well supported throughout many jurisdictions. For example, the Court of Justice of the European Union had established that collective bargaining agreements fell outside the scope of competition law provided that those agreements seek to adopt measures to improve conditions of work and employment. The European Court had even extended this principle in order to protect the right of workers who were falsely classified as self-employed to bargain collectively. The Worker members were deeply worried about the extensive and structural reform of the collective bargaining system adopted in 2017 and its grave consequences on the enjoyment and realization of the fundamental right to collective bargaining for workers in the country. In undertaking that reform, the Government had failed to duly take into account prior comments of the Committee of Experts in this regard. The social partners had merely been informed of those permanent and far-reaching changes, which would effectively lead to the breakdown of industrial relations. A comprehensive legislative reform process had to be undertaken in order to reverse the devastating changes made. The Government should ensure that the legislation was in full conformity with Article 4 of the Convention. The legislative provisions with respect to the general possibility, by means of collective bargaining, to reduce the rights and protections afforded by the labour legislation for workers, had to be revoked. Moreover, the provisions permitting individual derogations from the law and from collective agreements for workers with a higher education diploma and earnings above a certain limit had to be repealed. The definition of an autonomous worker had to be revised to ensure that misclassified workers were not excluded from their right to organize and to bargain collectively. Given the absence of effective tripartite consultations during the legislative reform process, the Worker members urged the Government to engage the social partners in genuine negotiations within the framework of the national tripartite body. In this regard, they called on the Government to avail itself of ILO technical assistance in order to develop a time-bound roadmap for legislative reform. The Government should also accept a direct contacts mission before the next International Labour Conference in order to assess progress made. Finally, they believed that it was crucial that the case be included in a special paragraph of the report.

Conclusions

The Committee took note of the written and oral information provided by the Government representative and the discussion that followed.

Taking into account the fact that the Committee of Experts examined this case outside of the regular reporting cycle, considering the Government’s oral submissions to the Committee regarding the labour law reform and its compliance with its obligations under Convention No. 98, and the discussion that followed, the Committee recommends the Government to:

- provide information and analysis on the application of the principles of free and voluntary collective bargaining in the new labour law reform; and

- provide information on the tripartite consultations with the social partners regarding the labour law reform.

The Committee requests the Government to provide this information to the Committee of Experts before its November 2018 session.

The Government representative noted that a clear majority of Committee members had undeniably expressed criticism for the working methods of the Committee of Experts on the Brazilian case. He urged the Committee of Experts and the Conference Committee to give full consideration to this important fact. The examination of the Brazilian case was in breach of the most basic principles of due process. A system allowing for this to happen, with no effective checks and balances, failed the purposes and objectives of the ILO. It also impaired the necessary strong and shared perception by member states and social partners that the system should function in a fair and equitable way, based on the technical merits of the cases. The system had failed on all those accounts. Its reform was a matter of urgency and necessity for the good of the Organization. His Government had presented robust arguments on the relevance and timeliness of the labour law modernization, which was creating more jobs, formalizing important sectors of the economy, preserving labour rights and promoting collective bargaining in full compliance with the country’s international obligations and in particular Convention No. 98. While thanking the majority of the Committee for their parliamentary behaviour, the speaker regretted that some members had passed judgement on issues that had no bearing on the work of the Committee. This was yet another example of the politicization of the Committee which should not be accepted. His country rejected any attacks on its institutions. Over the last two years, Brazil had faced a political crisis and an economic recession. It had implemented important economic and labour reforms, enacted key legislation and promoted positive change. Democracy was alive, civil society was vibrant, political debate was in full force, the rule of law was in place and strong and the judiciary remained fully independent. As to the conclusions agreed solely by the social partners, of which he had just been informed, they were yet another example of the flawed working methods of the Committee which lacked tripartite consensus. If information on the case was incomplete, this was not due to a lack of political engagement on behalf of his Government. It was rather a matter of reality imposing itself as the reform was only six months old and facts could not and, above all, should not be fabricated. Concerning the reference to consultations, the focus of the discussion should be the application of Convention No. 98 and any issue pertaining to other conventions should evidently be dealt with according to the relevant reporting cycles. The speaker concluded by indicating that his Government would examine the text of the conclusions that had just been submitted to him and, if appropriate, provide a response in due course.