Interim Report - Report No 279, November 1991

Case No 1560 (Argentina) - Complaint date: 07-NOV-90 - Closed

680. The allegations presented in this case against the Government of Argentina are contained in communications from the Association of Management Staff of Argentine Railways and the General Ports' Administration (APDFA) of 7 November 1990 and January 1991; in communications from the Confederation of Education Workers of the Argentine Republic (CTERA) of 19 November 1990 and 22 January 1991; in a letter from the Association of State Workers (ATE) of 5 December 1990; in communications from the World Confederation of Labour (WCL) of 15 January and 15 February 1991 and in communications from the Argentine Association of Airline Crew (AAA) of 14 December 1990 and 19 February 1991. The Government replied in a communication dated 20 August 1991.

1. 680. The allegations presented in this case against the Government of Argentina are contained in communications from the Association of Management Staff of Argentine Railways and the General Ports' Administration (APDFA) of 7 November 1990 and January 1991; in communications from the Confederation of Education Workers of the Argentine Republic (CTERA) of 19 November 1990 and 22 January 1991; in a letter from the Association of State Workers (ATE) of 5 December 1990; in communications from the World Confederation of Labour (WCL) of 15 January and 15 February 1991 and in communications from the Argentine Association of Airline Crew (AAA) of 14 December 1990 and 19 February 1991. The Government replied in a communication dated 20 August 1991.
2. 681. Argentina has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainants' allegations

1. 682. In its communication dated 7 November 1990, the APDFA alleges that Decree No. 1757/90 of 5 July 1990 (sections 56, 57, 59, 60, 65, 67, 68, 69 and 70) is undermining its right to undertake free negotiations with regard to the pay and working conditions of its members, thus violating the terms of Conventions Nos. 98 and 154.
2. 683. The APDFA points out that in September 1989, Act No. 23697 was promulgated, known as the Act respecting the Economic Emergency, and that section 1 thereof mentions a situation of collective danger arising out of the serious economic and social circumstances facing the nation. Section 44 of the Act authorises the Executive to review work regulations for staff in the public service or elsewhere, with a view to eliminating factors which could jeopardise efficiency and productivity. The same provision lays down that among other measures, summoning and/or creating collective bargaining machinery ... made it possible for joint agreements to be reached to carry out the provisions in this article. Thus, the possibility of unilateral decisions on the part of the Executive is reduced, since it is expressly stated that any possible "review" of the collective agreements must be done through a joint agreement. This is also laid down in section 45 of the Act.
3. 684. The complainant emphasises that Decree No. 1757/90 continues the theme of the need to eliminate factors which may jeopardise efficiency and labour productivity in public enterprises, although the Decree emphasises that these very objectives must be met within the existing legal framework, keeping collective bargaining as a suitable instrument for governing the activity of workers. However, in spite of this affirmation, the Decree maintains that with a view to making the negotiating process easier, it has been deemed necessary to waive those clauses which conflict with the objectives of efficiency and productivity, until new agreements are reached.
4. 685. Furthermore, in Chapter III of the Decree (wages policy) employers' representatives on negotiating committees are deprived of any degree of flexibility with regard to wage agreements with trade union organisations. Wages have to fall in line with pay increases unilaterally decreed by the Executive for the public administration. So, indirectly, it is the Executive which determines remuneration for the sector of workers covered by collective agreements, thus precluding any negotiation except when an agreement is reached on granting wages below the "ceiling" (sections 56 to 59 of the Decree).
5. 686. The complainants go on to state that in Chapter IV (collective labour agreements) negotiations to renew the agreements may begin without delay (section 64), which is quite acceptable. On the other hand, there are grounds for complaint in that there is an attempt to impose a fixed time-limit in which the collective agreement must be concluded. Otherwise, if an agreement is not reached, the national Executive will take steps to ensure that the terms laid down in section 44 of Act No. 23697 are met.
6. 687. According to the APDFA, section 67 of Decree No. 1757/90 contains the most blatant violation of the right of trade unions to engage in collective bargaining since, under the pretext of a "short-term necessity", clauses of the collective agreement are being openly waived when they supposedly "disrupt productivity", hinder or interfere with "an enterprise's managerial and administrative capacity".
7. 688. The complainant's communication concludes that the State is acting as both judge and jury in the following way: (a) the Government draws up its economic plan and determines adjustment policy; (b) government-appointed managers of public enterprises determine which clauses of the collective agreement conflict with "efficiency and productivity"; (c) the trade union involved has five days in which to draw up pertinent "comments". A failure to do this is seen as "consent"; (d) the Ministry of Labour and Social Security - an administrative department of the State itself - makes the final decision on waiving the terms of the collective agreement in question. In conclusion, the State determines economic policy; the State, as employer, puts forward amendments to collective agreements; and the State as administrative authority makes a decision on the possible "comments" drawn up by the trade union concerned.
8. 689. In a further communication of January 1991, the APDFA refers to the practical application of Decree No. 1757/90 with regard to certain collective agreements and in particular to collective agreement No. 433/75, clause 3 of which, listing the occupational categories represented within the Argentine Railways company, has been suspended. The suspension was requested by the Acting President of the Technical Advisory Committee on Public Sector Wage Policy. The APDFA contested the request within the statutory five-day limit, but lost its case; it was ruled that clause 3 of the collective agreement should be suspended until new collective labour agreements had been approved.
9. 690. The APDFA's members are divided up according to categories. It represents the management and professional staff of Argentine Railways, of the General Port Administration and of the Institute of Social Services for Railway Staff. The application of Decree No. 1757/90 to collective agreement No. 433/75 violates the principle of freedom of association, because in view of the APDFA being a trade union representing staff in different categories, and clause 3 specifying in the collective agreement which occupational categories the trade union represents at the level of collective bargaining, a suspension of this clause means that the representative function of the trade union is eroded.
10. 691. In its communication dated 19 November 1990, the CTERA states that, on 25 August 1989, its organisation requested the Ministry of Labour and Social Security to join it in elaborating a collective agreement for the sector, to provide a framework for arriving at agreements on wages, conditions and terms of work, how to reduce risks, and social and occupational benefits.
11. 692. The CTERA, when it formed part of a national preparatory committee along with provincial educational authorities, requested the Ministry of Labour and Social Security to develop the legal instruments for the formal constitution and functioning of a National Agreement for Education Workers. The Ministry of Labour's reply, through a legal ruling against the request, argued that a special Act would need to be passed in Congress in order to set up a collective agreement for the education sector.
12. 693. The complainant adds that despite this ruling made by the Ministry of Labour itself, it has put obstacles in the way of the Bill on Collective Agreements for the Education Workers of the Argentine Republic and neglected to bring it before the Congress, thus barring its implementation, against the advice of the Ministry of Labour itself, in accordance with the judgements made by the General Directorate of Labour Relations.
13. 694. The complainant adds, moreover, that the Bill on Collective Agreements for Education Workers was drawn up by a committee, the composition of which was based on resolution No. 55 of 24 January 1990 of the Ministry of Education, including representatives of the Ministry, representatives of all the educational authorities of the Republic, public officials from the Ministry of Economy, representatives of the public services and of the CTERA under the presidency of an official from the Ministry of Labour, who reported that the committee in question had been dissolved, without a resolution having been passed to this effect. Thus, argues the complainant, it can be concluded that the fundamental principles, including the ideal of concertation, which led to the creation of the committee, have been put to one side, thus leaving education workers deeply dissatisfied.
14. 695. The CTERA sent another communication dated 22 January 1991 in which it fully endorses the complaint presented in the preceding communication.
15. 696. The ATE, in a communication dated 5 December 1990, also criticises Decree No. 1757/90 (sections 56, 57, 59, 60, 65, 67, 68, 69 and 70) which unashamedly violates the right of the organisation to negotiate freely the wages and employment conditions of its members. The complainant points out that the Government, far from attempting to "encourage and promote the full development and utilisation of machinery for voluntary negotiation ... of collective agreements" as stipulated in Article 4 of Convention No. 98, is ignoring the will of the social actors and is illegally and arbitrarily disregarding the workers' hard-earned social victories. There is a return to the old ways of authoritarian governments, although the Government is using more subtle methods, autocractically setting wage levels, thus depriving parties of any opportunity to undertake free negotiations.
16. 697. The WCL, in a communication dated 15 January 1991, supports the complaint presented by the ATE and maintains that Decree No. 1757/90 violates Conventions Nos. 98 and 154. Although it admits that the state reform aimed at increased rationality and efficiency is a common goal, there are ways, methods and safeguards which cannot and should not disregard the basic rights of workers and their organisations. If they are indeed disregarded, arbitrary acts run the risk of leading to inequality and aggravating social problems, including mass dismissals (even of trade union delegates), and of making the socio-economic situation even more difficult, possibly leading to instability and further acts of an arbitrary nature.
17. 698. In a further communication dated 15 February 1991, the WCL provides information on the dismissal of trade union delegates who worked in the state sector. They are: Mr. Juan Carlos Piccini, Trustee (delegado normalizador, Institute of Social Works) whose mandate has expired, Mr. José Alverto Ibáñez, trade union secretary, Carlos Alberto Leonardi, press secretary and José Alberto Duarte, first secretary (National Register of Persons), Mr. Roberto Angel Pardo, press secretary (Public Work, Social Section), Mr. Héctor Ricardo Piñeiro, Trustee (delegado normalizador), and Enrique Muzzio, Trustee (delegado normalizador, National Institute of Cinematography), Mr. Patricio Prassolo, general secretary, Eduardo Silva, trade union secretary and Favio Bruno, organisation secretary (Secretariat of Culture - Cervantes Theatre) and Mrs. Sandra Solari, organisation secretary (Under-Secretariat of Industry and Commerce). In its conclusion, the WCL describes these dismissals as attacks on trade union rights and requests the reinstatement of the delegates.
18. 699. The AAA in communications dated 14 December 1990 and 19 February 1991 reiterates and fully supports the comments made with regard to the terms of Decree No. 1757/90 and its practical application in collective bargaining in the public sector.

B. The Government's reply

1. 700. In a communication dated 20 August 1991, the Government refers to Decree No. 1757 and ruling No. 9/90 suspending the application of certain clauses of the collective agreements covering airline crew and points out that the grounds for the complaints presented by this sector no longer exist, since both the AAA and the Association of Airline Pilots (APLA - which is not a complainant in these cases) have concluded new collective agreements with their employer, Argentine Airlines SA (the former state-owned airline, Aerolineas) which have already been approved by the Ministry of Labour.
2. 701. The Government explains the factual and legal reasons which led to Decree No. 1757/90 and points out that the Argentine Republic has, for some time, been experiencing a major economic crisis due to the enormous fiscal deficit which has been caused in part by the enormity of the public sector and by subsidies to state public enterprises. Against this background, Decree No. 1757/90 was passed on 5 July 1990 according to which, for a short-term period, and until new collective agreements are elaborated, the clauses of the collective agreements in force affecting productivity and efficiency will not be implemented. The state economic emergency was declared by means of Act No. 23696, considering the emergency as a force majeure which could be applied to existing contracts concluded in the public sector.
3. 702. It was up to the Ministry of Labour to make a decision on the temporary period during which the clauses of the collective agreement suggested by the enterprise - in this particular case Argentine Airlines - were to be suspended. Consequently, ruling No. 9/90 was passed according to which some clauses of the collective agreement were suspended "for a temporary period". In this way, the suspension of the clauses of the collective agreement in question resulting from the decision is no more than the application of justifiable measures aimed at surviving the economic emergency.
4. 703. With this in mind, continues the Government, it is important to highlight that the procedure provided for in Act No. 14250 on collective bargaining is not being waived at all and is in fact being fully exercised, in accordance with section 64 of Decree No. 1757/90. The suspension is merely for a short period, until a new agreement is concluded, and is fully justified in the light of anti-inflationary and stabilisation policies.
5. 704. On the other hand, the Government points out that the Supreme Court of Justice in the judgement "SOENGAS, Hector Ricardo and others v. Argentine Railways" of 7 August 1990, has once again shown that, in situations of social or economic emergency, authority to regulate an individual's rights can be more forcefully wielded than in periods of calm and normality. It adds that the case could not have been resolved without a prior examination of the different clauses making up a collective agreement, such as those laying down employment conditions, responsibilities and the fixing of wage scales, which could have been rendered worthless as a consequence of high inflation or in the face of widespread crisis, and which, for this reason, have a bearing on economic order.
6. 705. The Government repeats that new collective agreements have now been signed between the airlines company and the complainant trade union organisation, and so the ruling and the application of Decree No. 1757/90, a product of the aforementioned economic crisis, were not enforced for very long in practice.
7. 706. Finally, the Government points out that, in the Argentine Republic, the division of powers existing in democratic systems is in force; judicial review of governmental actions or of the constitutionality of Acts and decrees is fully exercised when natural or juridical persons believe that their rights have been violated, thus leaving the final decision in the hands of the courts

C. The Committee's conclusions

1. 707. The Committee observes that the allegations presented in this case relate to the promulgation of Decree No. 1757/90 which was based on the need to eliminate factors which may have a negative effect on efficiency and labour productivity in the public sector, in the framework of Act No. 23696 on the economic emergency. Similarly, the allegations relate to restrictions or "ceilings" imposed by the Executive, on awarding pay increases by means of collective agreements. They also refer to the imposition of a fixed time period in which agreement must be reached once negotiations have begun and the measures the Executive may take to ensure efficiency and productivity in the event of an agreement not being reached. Reference is also made to section 67 of Decree No. 1757/90 under which clauses of the agreements may be waived if they disrupt productivity, hinder or interfere with the administration of the enterprise, as in the case of clause 3 of collective agreement No. 433/75 which listed certain occupational categories represented by the APDFA before the Argentine Railways company, eroding the trade union's representative function.
2. 708. Other allegations presented in this case refer to certain administrative and legislative obstacles preventing the conclusion of a national collective agreement for the education sector for which a multipartite committee had been created to draw up legislation to uphold the national agreement. The committee was allegedly dissolved unilaterally by the representative of the Ministry of Labour, without a resolution having been passed to this end, thus precluding a collective agreement for the sector. Furthermore, the Committee observes that other allegations relate to the dismissal of trade union delegates from among state employees, by virtue of the policy of rationalisation and efficiency. Their names are: Juan Carlos Piccini, José Alberto Ibáñez, Carlos Alberto Leonardi, José Alberto Duarte, Roberto Angel Pardo, Héctor Ricardo Piñeiro, Enrique Muzzio, Patricio Prassolo, Eduardo Silva, Favio Bruno and Sandra Solari.
3. 709. The Committee takes note of the information provided by the Government, particularly with regard to the economic crisis facing the country due, in part, to the size of the public sector and also to subsidies to state enterprises, which led to the promulgation of Decree No. 1757. The Decree was aimed at reaching a level of efficiency and productivity which would allow the State to rationalise its operations and overcome the economic crisis facing it. It was purely a short-term measure to enable new collective agreements to be concluded in the public sector.
4. 710. The Committee notes furthermore that, by virtue of section 67 of Decree No. 1757/90, the State may waive certain clauses of collective agreements in force which affect productivity and efficiency, considering the state of emergency in the economy as a force majeure which may be applied to contracts in force in the public sector and which should remain in force until the conclusion of new collective agreements. It also notes that the Government states that Decree No. 1757/90, due to its short-term nature and its specific goals, does not override the machinery provided for in legislation normally governing collective bargaining but, on the contrary, allows it to function, in accordance with section 64 of the same Decree.
5. 711. On the other hand, the Committee notes that the Government emphasises that the final decision on the application of this Decree rests with the judiciary and that any person thus affected has recourse to legal processes.
6. 712. With regard to the measures taken by the Government with a view to rationalising the public sector in the framework of the state of economic emergency decreed by Act No. 23696, the Committee draws the Government's attention to the principle that the exercise of prerogatives belonging to the public authority, with regard to financial matters, in such a way as to obstruct or amend the implementation or content of collective agreements previously negotiated by public bodies is incompatible with the principles of the freedom of collective bargaining. (See for example 234th Report, Case No. 1173 (Canada/British Columbia), para. 87.) However, the Committee notes that Decree No. 1757/90 states that the objectives of efficiency and labour productivity in public enterprises should be met within the legal framework in force, maintaining collective bargaining as the ideal means to govern labour activity, and that the suspension of certain clauses of collective agreements which have already been agreed, and which conflict with the aforementioned objectives, are of a temporary nature, that is to say, they last until the negotiation of a new collective agreement, but that negotiations must bring them into line with the Government's wage policy for the public administration (sections 56-59 of the Decree).
7. 713. In these circumstances, the Committee wishes to stress that even though voluntary collective bargaining is a key aspect of trade union rights, it has accepted that in certain circumstances for compelling reasons governments might decide that the economic situation in the country called for stabilising measures and that during the application of such measures it would not be possible for wage rates to be fixed freely through the process of collective bargaining. (See 106th Report, Case No. 541 (Argentina), para. 16 and 110th Report, Case No. 561 (Uruguay), para. 225.)
8. 714. In this respect, the Committee, as well as the Committee of Experts and the Application of Conventions and Recommendations, have insisted that if within the context of a stabilisation policy a government may consider for compelling reasons that wage rates cannot be fixed freely by collective bargaining (in this case without exceeding certain "ceilings"), such a restriction should be imposed as an exceptional measure and only to the extent necessary, without exceeding a reasonable period and that it should be accompanied by adequate safeguards to protect workers' living standard. This principle is all the more important because successive restrictions may lead to a prolonged suspension of wage negotiations, which goes against the principle of encouraging voluntary collective negotiation. (Freedom of Association and Collective Bargaining, General Survey of the Committee of Experts, 69th Session of the International Labour Conference, 1983, para. 315 and 233rd Report, Cases Nos. 1183 and 1205 (Chile), para. 482.)
9. 715. With regard to the specific allegations on the suspension of clause 3 of collective agreement No. 433/75 which listed categories represented by the APDFA within the Argentine Railways company, and to the alleged administrative and legislative obstacles preventing the conclusion of a national collective agreement for the education sector, the dissolution of the multipartite committee set up to draft legislation to this end, and also with regard to the dismissals of representatives of public sector staff mentioned in the preceding paragraph, the Committee observes that the Government has not made any reply and requests that its comments be sent as soon as possible so that the Committee may be in a position to take a decision.

The Committee's recommendations

1. 716. In the light of its foregoing interim conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee, having observed the particular circumstances of the economic emergency facing the country and which have led to the restrictions on collective bargaining contained in Decree No. 1757/90, draws the Government's attention to the principle that has always been upheld according to which in cases of economic emergencies, such restrictions should only be applied for compelling reasons as an exceptional measure, only to the extent necessary, without exceeding a reasonable period and should be accompanied by adequate safeguards to protect workers' living standard.
   • (b) The Committee requests the Government to send its comments on the allegations relating to the suspension of clause 3 of collective agreement No. 433/75; on the administrative and legislative obstacles preventing the conclusion of a national collective agreement for the education sector and on the dismissal of representatives of public sector staff.