Report in which the committee requests to be kept informed of development - Report No 374, March 2015

Case No 2937 (Paraguay) - Complaint date: 26-SEP-11 - Closed

Allegations: Non-compliance by Itaipú Binacional – Lado Paraguayo with numerous provisions of the collective agreement, its subsequent negotiation of a collective agreement with minority unions and its opposition to the establishment of the bi-national joint conciliation committee even though an agreement between Brazil and Paraguay provides for its establishment

1. 599. The Committee last examined this case at its March 2014 meeting when it presented an interim report to the Governing Body [see 371st Report, paras 640–654, approved by the Governing Body at its 320th Session (March 2014)].
2. 600. On 28 May 2014, CUT, supported by ten Itaipú Binacional – Lado Paraguayo sector trade unions, presented additional information and new allegations.
3. 601. The Government transmitted its observations in communications sent during the month of March, and on 22 May and 1 October 2014.
4. 602. Paraguay 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. Previous examination of the case

1. 603. At its March 2014 meeting, the Committee made the following recommendation on the pending issues [see 371st Report, para. 654]:
   • The Committee urges the Government to send its observations on all the allegations made in this case without delay and in particular on those reporting that the enterprise Itaipú Binacional-Lado Paraguayo: (1) failed to comply with the CCCT for the period 2010–11 which, according to the complainants, had been the subject of several complaints submitted to the enterprise and before the administrative authority; (2) in a clear demonstration of anti-union practice, signed the CCCT for the period 2011–12 with several minority trade unions, sidelining the complainant organizations, which together represent 90 per cent of the workers, and (3) failed to comply with an agreement that it had signed with the complainant organizations with a view to ending the strike and took reprisals (according to the allegations, it terminated its contracts with transport companies that employed SICONAP/S members and made the recruitment of workers in the new transport companies contingent on them giving up their SICONAP/S membership; it also intends to introduce changes to an employment sector (tourism coordination), which would have the immediate effect of making STEIBI members redundant; and has established a new trade union which has been registered by the administrative authority).

B. New allegations from the complainants

1. 604. In its communication of 28 May 2014, CUT, endorsed by six Itaipú Binacional – Lado Paraguayo sector trade unions, alleges that the enterprise has yet to comply fully with the provisions of the most recent collective agreement on working conditions (2013–14) signed with three of its trade unions, STEIBI, SICONAP/S and SITRAIBI, despite their repeated demands. In particular, it has failed to comply with articles 1, 7, 8 and 11; article 16, paragraphs 1 and 2; articles 28, 34, 35, 41, 43, 44, 49, 50, 52 and 55; article 77, paragraph 4; article 78(A); articles 86, 88 and 92 to 94; and article 95, paragraphs 5, 6, 10, 12 to 14, 16 and 26; these complaints are mentioned in the records of eight bipartite meetings held in 2013 and 2014. A wide variety of issues are in question, including, among other things, freedom of association, housing policy, filling of vacant positions, abolition of posts, equal wages, banking hours, and the like. CUT adds that, although the management of Itaipú Binacional – Lado Paraguayo is aware of the present complaint, it has taken no decisions with a view to rectifying its conduct.
2. 605. CUT also maintains that Itaipú Binacional – Lado Paraguayo has systematically opposed the establishment of the bi-national joint conciliation committee even though article 8 of the Protocol on Labour and Social Security Relations to the Treaty of Itaipú, which Brazil and Paraguay have signed, provides for its establishment. In support of the complaint, the representatives of four trade unions of the Brazilian branch of the enterprise also signed the CUT complaint.

C. The Government’s reply

1. 606. The Government attached to its communications, sent in March, as well as 22 May and 1 October 2014, various Ministry of Labour decisions on the issues raised in the complaint, as well as communications from Itaipú Binacional – Lado Paraguayo noting that collective agreements on working conditions are concluded annually and that every trade union recognized by the competent authority is entitled to participate in negotiations and to conclude the respective collective agreements. Itaipú Binacional – Lado Paraguayo indicates that it holds meetings with the trade unions and denies the unions’ claims that it failed to comply with the provisions of collective agreements, provides an explanation and sets out its position as reflected in the records of the meetings held with the trade unions; demands proof of each case in which it allegedly failed to comply with provisions of the collective agreement; in the event of a dispute, the labour administration authority attempts to bring the parties to an agreement. The current legislation permits, and even requires, the negotiation of collective agreements with recognized trade unions, including minority unions; there are, in fact, various collective agreements. According to the enterprise, instances of non-compliance with such agreements are not only monitored by the authorities but referred to a committee comprising representatives of Itaipú Binacional – Lado Paraguayo and the trade unions, which meets on a monthly basis to monitor the implementation of the collective agreement; instances of non-compliance with a provision of the agreement are examined, negotiated and even “priced” by the parties, who establish a monetary amount known as the “conciliation of interests” at the end of each annual bargaining session; this amount was approved by the complainant unions when the collective agreement was concluded on 23 May 2011 and, in the case of article 93, it was agreed that Itaipú Binacional – Lado Paraguayo would pay its employees the equivalent of 1.3 times their wage for April 2011 as a conciliation of interests.
2. 607. The enterprise indicates that any legal disputes which could arise with workers are reported, verified and resolved by the competent judicial authority, whose judgments are binding on the enterprise.
3. 608. The Government notes that the complainant organizations also signed collective agreements for the periods 2012–13 and 2013–14.
4. 609. The enterprise maintains that the collective negotiations with minority trade unions in 2011 were conducted in accordance with the law. The complainant union, STEIBI, requested the Ministry of Labour not to approve an addendum to the collective agreement signed with four trade unions. Following the negotiation of the collective agreement for the period 2010–11 with trade unions other than the complainants, the complainant unions declared a 30-day strike, during which the enterprise received reports of acts of violence against non-striking workers. Because such violence is illegal, the enterprise requested the judicial authority to confirm the illegality of the acts in question.
5. 610. The enterprise adds that the strike was lifted after the parties signed a new collective agreement for the period 2011–12. The enterprise agreed not to file any administrative or legal actions against the workers involved in the strike and the trade unions agreed not to file any legal and/or administrative actions for non-compliance with the collective agreement for the period 2010–11; however, the trade unions, nevertheless, presented a complaint to the Committee. The measures mentioned by the complainants, such as the unilateral termination of contracts for the provision of services by contractors, are envisaged at the contractual level and should not necessarily be considered as violating the compromise agreement that ended the strike. Furthermore, the complainant trade unions could have sought legal remedies. The enterprise denies that it violated the right to freedom of association and Conventions Nos 87 and 98, as alleged by the complainant trade unions.
6. 611. As for the substance of the complaint, the enterprise explains that in 1991, the complainant trade unions, STEIBI and STICCAP, successfully concluded the first collective agreement between the representatives of Itaipú Binacional – Lado Paraguayo and its unions. The agreement established a new benefit for workers, the so-called “housing policy”, which simply meant having a home that belonged to the enterprise. Thus, the collective agreement enshrines a benefit that had already been granted by Itaipú Binacional – Lado Paraguayo since 1978. From that time, 1991, and each successive year thereafter until 2010, Itaipú Binacional – Lado Paraguayo and the trade unions included this “housing policy” benefit in their agreements.
7. 612. The enterprise states that in 2000, in light of the social and community developments, Itaipú Binacional – Lado Paraguayo adopted the position to sell its homes because continuing to own them was no longer appropriate; moreover, the employees in receipt of that benefit were constantly expressing their intention to directly purchase the homes in which they had been living for decades, thus becoming homeowners. In 2010, Itaipú Binacional – Lado Paraguayo concluded a new collective agreement on working conditions with the trade unions, STEIBI, STICCAP, SICHAP, SICAE and SISE, which would govern labour relations between the enterprise and its employees for the period 1 May 2010 to 31 April 2011. The various labour benefits that the enterprise granted to its workers included a housing policy whereby it would provide its workers with housing that they would own. In that connection, Itaipú Binacional – Lado Paraguayo decided to invite the unions, of which its workers were members, to discuss and negotiate the transfer of homes to the employees who were living in them. Thus, it was agreed with various trade unions that the homes would be sold to the employees who were living in them at below the national market price and that, as compensation (for loss of the housing benefit), they would receive 30 per cent of the value of the home (Addendum No. 1 to the collective agreement for the period 2010–11).
8. 613. The enterprise indicates that it is reasonable to state that this new act on the part of the employer would benefit the workers. This view was shared by all the trade unions and confirmed by their assemblies, with one exception: at the last minute, while its representatives were negotiating the addendum, STEIBI objected to the sale of the homes to the workers. Two other trade unions, SICONAP/S and SITRAIBI, gave in and adopted the position taken by STEIBI.
9. 614. According to the enterprise, negotiation of the housing policy led to disagreement between the trade unions; their workers were divided into two camps with STEIBI, SICONAP/S and SITRAIBI (a newly established union at that time), which opposed the sale of the homes on one side, and STICCAP, SICAE, SICHAP and SISE, which agreed to the conditions of sale, on the other. This lack of agreement between the unions led to false allegations of persecution and discrimination. Paraguay’s judiciary has confirmed that there had been no persecution.
10. 615. According to the enterprise, since December 2010, the complainant trade unions have been making a systematic effort to prevent the workers from exercising their right to acquire decent housing. They opposed the Ministry’s approval of Addendum No. 1 to the collective agreement for the period 2010–11, appealed against the administrative decision once it had been taken and presented the present complaint, to the detriment of truth and reality.
11. 616. The enterprise states that the Government of Paraguay has empowered all its bodies (executive, judicial and legislative) to receive complaints from trade unions. All of these complaints have been considered analytically and objectively and, in every case, it has been decided that the sale of the homes represented social progress for the affected zone and for State policy since, through this mechanism, some 1,000 people would become homeowners under optimal conditions. In every case, the aforementioned bodies have concluded that the arguments adduced by the complainant trade unions were totally unfounded, illogical, unreasonable and contrary to the interests of society and, in particular, of the workers. To date, over 823 homes have been sold and 823 Paraguayan families have benefited as a result of Addendum No. 1 to the collective agreement for the period 2010–11 and its administrative approval (over the objections of the complainant trade unions).
12. 617. Lastly, the enterprise maintains that the fact that 95 per cent of its workers are union members and that various collective agreements have been concluded constitutes proof of freedom of association and non-discrimination.

D. The Committee’s conclusions

1. 618. The Committee observes that, in their early communications, the complainant organizations allege that Itaipú Binacional-Lado Paraguayo: (1) failed to comply with the collective agreement on working conditions for the period 2010–11, which, according to those organizations, was the subject of various complaints presented to the enterprise and to the administrative authority, particularly with regard to an addendum to the collective agreement concluded with minority trade unions; (2) in an open demonstration of anti union practice, signed the collective agreement for the period 2011–12 with several minority trade unions, sidelining the complainant organizations, which, together, represent 90 per cent of the workers; and (3) failed to observe an agreement, signed with the complainant organizations that had ended a strike and took reprisals (according to the allegations, the enterprise terminated its contracts with transport companies whose workers were members of SICONAP/S and made the hiring of workers by the new transport companies contingent on them giving up their SICONAP/S membership); it also intends to introduce changes in an employment sector (tourism coordination) that would have the immediate effect of making STEIBI members redundant.
2. 619. With regard to the allegations that the enterprise failed to comply with the collective agreement with the complainant trade unions for the period 2010–11; signed a collective agreement for the period 2011–12 with minority unions and following a strike by the complainant trade unions failed to comply with the agreement not to take reprisals (it is alleged that contracts with transport subcontractors were terminated); and, made the recruitment of workers in new transport companies contingent on them giving up their SICONAP/S membership, the Committee takes note of the enterprise’s statement that: (1) it did not violate the right to freedom of association or Conventions Nos 87 and 98, that 95 per cent of its workers are union members and that collective agreements had been concluded with the existing trade unions; (2) the main problem has been that the complainant trade unions (unlike other unions) have persistently opposed a collective agreement allowing the sale of homes to the people who had been allowed to live in them; this objective of the enterprise was initially endorsed by all the trade unions (including SICONAP/S and SITRAIBI) with the exception of STEIBI, which, at the last minute, opposed the sale (which would benefit some 1,000 workers); SICONAP/S and SITRAIBI then joined STEIBI in opposing the initiative; the other unions ultimately signed an addendum to the collective agreement for the period 2010–11; the complainant trade unions nevertheless opposed – unsuccessfully, as is clear from the appeals presented to various authorities – approval of the aforementioned addendum by the Ministry of Labour; (3) this situation led to a strike by the complainant trade unions with illegal acts of violence against non-striking workers; the strike was ended through an agreement between the parties with a reciprocal commitment not to take reprisals (including not filing any legal and/or administrative actions); however, a complaint on this matter was presented to the Committee; (4) the unilateral termination of contracts for the provision of services by contractors, mentioned by the complainant trade unions, is a measure envisaged at the contractual level and should not necessarily be viewed as violating the commitment not to take reprisals that was signed at the end of the strike; furthermore, the complainant trade unions had the right to seek legal remedies; and (5) after the strike had ended, a collective agreement with the complainant trade unions for the period 2011–12 was signed.
3. 620. The Committee would like to point out that the complainant trade unions are (as stated in the complaint and not contested by the enterprise) the majority unions. In that connection, without undertaking to evaluate the merits of its objective or to consider whether it benefits the workers, the addendum to the collective agreement for the period 2010–11 that the enterprise concluded with the minority unions so that workers could purchase the homes in which they were already living may raise questions in relation to the principles of freedom of association in so far as, in principle, any provision that altered the content of the collective agreement in question should have been adopted with the consent of all the signatory trade unions.
4. 621. The Committee regrets that, although the complaint was presented in 2011, the Government did not send its reply until 2014. Nevertheless, the Committee considers that since, according to the enterprise, over 823 workers have purchased their homes since the strike was lifted in 2011 with the signing of an agreement, and since the collective agreement with the complainant trade unions for the period 2011–12 has been signed, the issue has been overtaken by events in so far as it would be difficult to reverse the situation with regard to ownership of the homes and the complainant trade unions have signed a new collective agreement for the period 2013–14. The Committee also notes that the enterprise challenges the present complaint by the complainant trade unions on the grounds that the agreement that ended the strike in 2011 included a provision stipulating that no complaints would be presented.
5. 622. The Committee observes that, in its most recent communications, CUT alleges: (1) that Itaipú Binacional – Lado Paraguayo has failed to comply with numerous provisions of the collective agreement for the period 2013–14, to the detriment of the signatory trade unions (STEIBI, SICONAP/S and SITRAIBI); and (2) that, despite an agreement signed by Brazil and Paraguay, the enterprise has opposed the establishment of the bi-national joint conciliation committee.
6. 623. The Committee takes note of the following statements by Itaipú Binacional – Lado Paraguayo transmitted by the Government: (1) workers bring legal disputes regarding the application of provisions before the judicial authority, whose judgments are binding on the employer; (2) cases of non-compliance with collective agreements are examined by a committee comprising representatives of the enterprise and the trade unions, which meets on a monthly basis; cases of failure to comply with a provision of such an agreement are examined, negotiated and even “priced” by the parties, who set an amount established annually at the end of the collective bargaining; (3) non-compliance with a provision of a collective agreement must, however, be proved; (4) the enterprise provided an explanation and set out its position in the hope that the trade unions’ complaints regarding non compliance with such provisions would be rejected; and (5) in the event of a dispute, the labour administration authority attempts to bring the parties to an agreement. The Committee takes note of the enterprise’s statement that current legislation permits, and even requires, the negotiation of collective agreements with trade unions, including minority unions, and that there are, in fact, various collective agreements.
7. 624. The Committee observes that the collective agreements currently in force at Itaipú Binacional-Lado Paraguayo, including the collective agreement with the trade unions represented by the complainant organization for the period 2013–14, call for the establishment of a bipartite committee to consider the cases of non-compliance mentioned by the trade unions. The Committee further observes that, according to the enterprise, instances of non-compliance may, in some cases, be “priced” with an amount of compensation set during the annual collective bargaining session; in other cases, the parties’ positions regarding compliance with provisions affecting the workers, including members of the three trade unions represented by the claimant organizations, are radically divergent. The Committee observes that the complainant organization refers in its complaint to numerous provisions that, in its view, have not been implemented (concerning, among other things, freedom of association, the abolition of posts and the filling of vacant positions). Because the parties’ opinions on those matters are sharply divided (for example, on the question of the bipartite committee envisaged in the collective agreement), it invites the Government to institute an investigation through the labour inspectorate and to keep it informed of the outcome without delay.
8. 625. With respect to the alleged opposition of the enterprise to the establishment of the bi national joint conciliation committee even though an agreement signed by Brazil and Paraguay provides for its establishment, the Committee observes that the Government has not replied to this allegation and requests to be kept informed in that regard.

The Committee’s recommendations

1. 626. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee invites the Government to institute an investigation, through the labour inspectorate, into the alleged failure to comply with the provisions of the collective agreement for the period 2013–14 to which the complainant organizations refer and to keep it informed of the outcome without delay.
   • (b) With regard to the allegation that the enterprise has opposed the establishment of the bi-national joint conciliation committee even though an agreement signed by Brazil and Paraguay provides for its establishment, the Committee observes that the Government has not replied to this allegation and requests to be kept informed in that regard.