Interim Report - Report No 376, October 2015

Case No 3027 (Colombia) - Complaint date: 28-FEB-13 - Follow-up

Allegations: The complainant organizations allege that the liquidation of the company Pricol Alimentos SA had the effect of destroying the trade union SINTRAPRICOL and eradicating trade union presence in the Facatativá production plant, owned by the Polar corporate group

1. 276. The complaint is contained in communications dated October 2012, February 2013, 22 October 2013, 30 May 2014, 22 October 2014 and 11 March 2015.
2. 277. The Government sent its observations in communications dated 28 April 2014, 13 June 2014 and 21 July 2015.
3. 278. Colombia has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Labour Relations (Public Service) Convention, 1978 (No. 151), and the Collective Bargaining Convention, 1981 (No. 154).

A. The complainants’ allegations

1. 279. In their various communications, the complainant organizations allege that the process of liquidating the company Pricol Alimentos SA (hereinafter “the company”) aimed at destroying the trade union SINTRAPRICOL and eradicating trade union presence in the Facatativá production plant, owned by the Polar corporate group. The complainant organizations particularly emphasize that the liquidation process did not at any point involve consultations with the trade union, that the company dismissed SINTRAPRICOL’s leaders without obtaining legal annulment of their trade union immunity and that it applied to nullify the union’s legal personality after dismissing the majority of its members. The complainant organizations add that the company and Alimentos Polar Colombia SAS formed a single business entity, and jointly operated the Facatativá production plant, and therefore the process of liquidating the company effectively dissolved the trade union and eradicated union presence in the aforementioned production plant.
2. 280. The complainant organizations go on to detail the sequence of events connected to their allegations. The complainant organizations indicate that: (i) in 2002 the company, part of the Polar corporate group, acquired the assets of Productos Quaker SA, which had begun to operate in the late 1950s in Santiago de Cali; (ii) as a result of this change of ownership, the trade union SINTRAQUAKER, established in 1958, became SINTRAPRICOL; (iii) in 2006, the company’s Cali plant had 103 workers, of whom 52 were SINTRAPRICOL members, the company and the union having signed, in 2005, a collective agreement which was valid until 2008; (iv) in November 2006, the company announced that all the workers at the plant would have to relocate, starting from January 2007, to the city of Facatativá (in the department of Cundinamarca); (v) at the same time the company began to put pressure on the workers to accept the termination of their contracts for derisory sums, rather than relocate to Facatativá; (vi) in December 2006, approximately 20 additional workers joined the trade union; (vii) between 24 November 2006 and 3 February 2008 the company terminated 45 workers’ contracts, in violation of the provisions of the collective labour agreement; (viii) on 19 January 2007 the legal representative of SINTRAPRICOL filed an administrative labour complaint for illegal collective dismissal, which was unsuccessful; (ix) as a result of the abovementioned collective dismissals, the number of unionized workers fell to just 20; (x) the company made an application to nullify the union’s legal personality, as its membership had fallen below the threshold of 25 – the outcome of which is still pending, in view of the reinstatement proceedings that numerous dismissed unionized workers have initiated; (xi) in June 2008 the company’s workers, along with workers of other companies in the same sector, established an industry-level trade union, the National Union of Workers in Industry, Farming and Food Processing (SINALTRACINPROA); (xii) in March 2009, SINALTRACINPROA presented the company with a list of demands; (xiii) on 14 April 2009 negotiations with the company on the set of demands began, causing the circumstantial immunity provided for in Colombian law to come into effect, in favour of all union members; (xiv) on 4 May 2009, the company and the union not having reached an agreement, the direct settlement stage came to an end and the union requested the Ministry of Health and Social Protection to form an arbitration tribunal; (xv) despite his initial decision, in September 2009, to form an arbitration tribunal, the Deputy Minister of Labour Relations finally back-pedalled following the company’s presentation of an administrative appeal; (xvi) on 21 October 2009 the company’s shareholders decided, at their general meeting, to grant voluntarily the dissolution and liquidation of the business that constituted the legal entity under which the company operated; (xvii) under Colombian law, the next steps should have consisted in the company requesting permission from the Ministry of Health and Social Protection for its closure, and seeking authorization from the labour judges to dismiss the workers who were protected by trade union immunity; (xviii) the workers were not informed of the liquidation process, nor of the application to close the company; (xix) in November 2009, the company specially requested the waiver of the trade union immunity of 14 trade union leaders (Mr Marino Villa Valencia, Mr Jorge Humberto Mayor Jiménez, Mr Ildebrando Zamora Cifuentes, Mr Luis Espper Cuadrado Gutiérrez, Mr Diego Rivera Tovar, Mr Abelardo Paz Herrera, Mr Diego Fernández Flores Loaiza, Mr Jairo Ossa Castillo, Mr Wilson Hernández Misas, Mr Jorge Heber Morales Cardona, Mr José Fernando Sánchez Muñoz, Mr Eimar Lider Martínez Gómez, Mr Gentil Aníbal Muñoz and Mr Jorge Alberto Quintero Rodríguez); (xx) on 18 December 2009, the company decided to dismiss the 20 unionized workers, who included the 14 trade union leaders mentioned above and Mr Héctor Fabio Morales Cano, Mr Luis Óscar Montes, Mr Fernando López Jiménez, Mr Nelson Yesid Castañeda Poloche, Mr Luis Eduardo Abadía Basto and Mr Campo Elías Qiroz Asmasa – despite the fact that at that time the company had not been given either ministerial authorization to close or legal authorization to waive their immunity; (xxi) at the same time, the company’s directors continued the process of liquidating the company, without having obtained the permission of the Ministry of Health and Social Protection for its closure; (xxii) when the Ministry requested the company to provide the documentation necessary to process the authorization for closure, the liquidator responded on 26 January that the company had already been liquidated; (xxiii) on 4 February 2010 the Ministry of Health and Social Protection withdrew its request to visit the company, which had been sent in January 2010 as part of the closure authorization procedure; (xxiv) on 5 January 2010 the union presented an administrative labour complaint relating to the 20 dismissals, based on the fact that the company had violated the legislation on collective dismissals and the trade union immunity that all the workers enjoyed, by virtue of the collective dispute which was still then in progress; (xxv) on 9 September 2010, the Ministry of Health and Social Protection decided to refrain from imposing any measures at all against the company; (xxvi) the union applied to the Ministry of Health and Social Protection for a declaration stating that the company and Alimentos Polar Colombia SAS were a single business entity, inasmuch as they shared the same corporate aims and jointly operated the Facatativá plant; (xxvii) the union’s application was rejected by the Ministry of Health and Social Protection; and (xxviii) the Supervisory Authority for Companies did not take into consideration the statement made by Agencia de Aduanas Agecoldex SA (Agecoldex Customs Agency, SA) indicating that the company failed to make clear, during the process of its dissolution and liquidation, the fact that it belonged to and was dependent on the Polar corporate group, to the serious detriment of its creditors and workers.
3. 281. In their communications of 2014 and 2015, the complainant organizations state that various judicial decisions recognize a violation of trade union immunity to the detriment of the trade union leaders of SINTRAPRICOL and SINALTRACINPROA, but that the judicial authorities refrain from ordering their reinstatement or the payment of indemnities because the company has already been liquidated.
4. 282. With regard to other legal proceedings seeking the reinstatement of workers in Alimentos Polar Colombia SAS, Polmacer Ltda and Inversiones Pricol CA, which continue to operate in the Facatativá plant, the complainant organizations state that various first instance rulings ordered the workers’ reinstatement, that these decisions were revoked by second instance rulings and that the outcomes of judicial reviews are now pending.
5. 283. In the same communications, the complainant organizations highlight the fact that the company has continued its productive activities in the Facatativá plant, owned by the Polar corporate group, as Pricol Alimentos SA and Alimentos Polar Colombia SAS are a single business entity. In this connection, the complainant organizations state that: (i) both companies had the same corporate aims; (ii) both companies were owned by the same people; (iii) the two companies identified with the same brand (Polar) – demonstrated by the fact that both companies’ names are on employees’ payslips and uniforms; (iv) the company’s productive activity in the Facatativá plant was taken over by Alimentos Polar Colombia SAS, with the same machinery being used to produce the same products as before; (v) there is continuity of service: many of the company’s workers were transferred to Alimentos Polar Colombia SAS and given positions that reflected their time in the company’s service prior to the relocation; and (vi) Alimentos Polar Colombia SAS recognized the validity of the collective agreement by which ex-company employees had been covered previously, and continued to accord them the rights that it established.
6. 284. On the basis of the above sequence of events, the complainant organizations state that the liquidation of the company had the effects of eradicating SINTRAPRICOL and enabling the Facatativá plant to operate without any trade union. They add that no Colombian company in the corporate group had trade unions when these events occurred, and that the group’s practice consists in signing collective accords with non-unionized workers instead of committing to collective agreements. On the basis of what precedes, the complainant organizations request that Alimentos Polar Colombia SAS reinstate the leaders and members of SINTRAPRICOL and SINALTRACINPROA.

B. The Government’s response

1. 285. In a communication of 28 April 2014, the Government of Colombia transmits the reply of the liquidated company Pricol Alimentos SA The company states that freedom of association was never infringed, that the complaint concerns the individual rights of the dismissed workers and that, as such, the allegations are not within the purview of the Committee on Freedom of Association. Secondly, the company details the status of the various legal proceedings related to the case and mentioned by the complainant organizations, emphasizing that the results of the multiple appeals made by each of the claimants are pending.
2. 286. The Government goes on to communicate its own observations connected to the complainant organizations’ allegations, stating that the transferral of the company from Santiago de Cali to Facatativá was legitimate, as the Constitution of Colombia provides for economic freedom, and that the trade unions do not explain how this relocation violates ILO Conventions on freedom of association and collective bargaining. The Government also states that the Colombian courts have handed down rulings on the complainants’ claims, and that the decisions taken have not been in their favour.
3. 287. The Government also provides information concerning the administrative labour processes related to the present case, stating firstly that: (i) on 4 December 2009, the company applied for the authorization of the labour administration to permanently close its activities, as it found itself in a state of liquidation; (ii) on 7 December 2009 the labour administration requested the employers to provide information on whether or not trade unions existed, and on other matters relating to work and pensions; (iii) on 26 January 2010, the ex-liquidator of the company notified the labour administration that the company had been liquidated on 21 December 2009, without giving the requested information concerning the existence of trade unions or the other required information related to work and pensions; (iv) that same day, the labour administration informed the company that it would conduct a visit to the company’s premises on 5 February 2010, and that the workers should be present; (v) on 4 February 2010, the ex-liquidator abandoned the application for closure authorization and stated that the company was already legally liquidated; and (vi) on 19 February 2010, the company’s application for closure was filed. The Government states, secondly, that: (i) on 5 January 2010, various workers affiliated to SINALTRACINPROA, SINTRAPRICOL and SINALTRAINPROCED presented a complaint against the company, alleging collective dismissal and violation of trade union immunity; (ii) on 26 January 2010 an investigation was opened, and the parties were summoned to a meeting on 10 February 2010; (iii) the ex-liquidator of the company notified the authorities that the company was legally liquidated; (iv) as a result of the above, the complaint was filed on 23 August 2011 due to the impossibility of initiating an investigation into a company which no longer had legal personality.
4. 288. In a communication dated 21 July 2015, the Government provides an update on procedural advances in the different legal cases connected to the present case, based on information furnished by the liquidated company. The Government adds, on its own behalf, that: (i) the company merely exercised its economic freedom, and did not violate the ILO Conventions ratified by Colombia relating to freedom of association, and that this case is therefore not within the Committee’s purview; (ii) the majority of the workers’ legal claims have yet to be definitively resolved, most court decisions to date having been in favour of the company (this is true of the application for recognition that the company and Alimentos Polar Colombia SAS are a single business entity – the Supreme Court of Justice is still conducting an extraordinary judicial review of the previous decisions); and (iii) the Ministry of Labour took all the necessary actions in relation to SINTRAPRICOL’s request for a declaration of business unity.

C. The Committee’s conclusions

1. 289. The Committee observes that the present case concerns the liquidation of the company Pricol Alimentos SA (hereinafter “the company”) and the related dismissal of company workers who were affiliated with the trade unions SINTRAPRICOL and SINALTRACINPROA. The Committee observes that the information provided by the complainant organizations, the company and the Government relates mainly to the following facts: (i) SINTRAPRICOL, a trade union whose origins date back to 1958, represented, in 2006, most of the workers of the company with which it had signed a collective agreement; (ii) in January 2007 the company, which was based in Santiago de Cali, began the process of moving its operations to the town of Facatativá; (iii) between November 2006 and February 2008 the company dismissed 45 workers; (iv) as a result of the dismissals the number of workers in the trade union fell below the legal minimum number, 25; (v) on the basis of the preceding facts, the company applied to the courts for the annulment of the trade union’s legal personality – the definitive resolution of which claim is still pending; (vi) in 2008, the company’s workers participated in the establishment of an industry-wide trade union, SINALTRACINPROA, which negotiated on a list of demands with the company between March and May 2009 without reaching an agreement; (vii) on 21 October 2009, the company’s shareholders decided, at their general meeting, to liquidate the company voluntarily; on 18 December 2009, the company dismissed 20 unionized workers, among them 14 leaders of SINTRAPRICOL and SINALTRACINPROA; and (viii) on 20 December 2009 the liquidation of the company became effective.
2. 290. The Committee notes that the complainant organizations allege, in particular, that: (i) consultations with the trade unions concerning the liquidation of the company were not held at any point; and (ii) the liquidation of the company was a manoeuvre intended to eradicate the trade unions; after all, the liquidated company continued its productive activity in the same place and using the same machinery, only under the new corporate name of the Polar corporate group, under which the company operated (hereinafter “the corporate group”).
3. 291. The Committee also notes, however, that the company and the Government state that the company merely exercised its economic freedom, without this violating the workers’ rights related to freedom of association; that the present complaint does not fall within the purview of the Committee; and that most of the workers’ legal claims have yet to be definitely resolved, most court decisions to date having been in favour of the company.
4. 292. The Committee observes that the company and the Government do not respond to the allegation that there were no consultations with the trade unions in relation to the liquidation of the company. Recalling that in cases where new staff reduction programmes are undertaken, the Committee requested that negotiations take place between the enterprise concerned and the trade union organizations [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 1082], the Committee requests the Government to take the necessary measures to ensure that, in future, the liquidation of companies involves consultations and negotiations with the relevant trade unions.
5. 293. As regards the alleged anti-union nature of the process of liquidating the company, the Committee takes note that the trade union alleges that: (i) the liquidated company formed part of a corporate group; (ii) the company’s liquidation did not mean the closure of its productive operations, but that the company’s activities continued in the same plant, using the same machinery, merely under another of the corporate group’s company names; (iii) the company was liquidated without the Ministry of Labour’s authorization to close; (iv) the company’s workers who benefited from trade union immunity were dismissed without the necessary prior judicial authorization; (v) some of the company’s non-unionized workers continue to work in the plant under the new company name; and (vi) the liquidation of the company has resulted in the Facatativá plant operating without any trade union.
6. 294. The Committee also notes that the Government states that: (i) on 4 December 2009, the company requested the labour administration’s authorization to permanently close its activities, being in a state of liquidation; (ii) in January 2010, the ex-liquidator of the company informed the labour administration that the company had been liquidated on 21 December 2009, without having furnished the labour administration with the information that it had requested on the existence of company trade unions and other work and pensions matters; (iii) the labour administration set a date of 5 February 2010 for a visit to the company’s premises; (iv) on 4 February 2010 the company withdrew its application for closure, being already in a state of liquidation, and the labour administration consequently closed the file; (v) the administrative labour complaint presented on 5 January 2010 by worker members of SINTRAPRICOL, SINALTRACINPROA and SINALTRAINPROCED for violation of the laws concerning dismissal and trade union immunity was filed, it being impossible to conduct an investigation of the liquidated company, which no longer had legal personality; (vi) the majority of the workers’ legal claims relating to the liquidation of the company have yet to be definitively resolved, most court decisions to date having been in favour of the company, including the application for recognition that the company and Alimentos Polar Colombia SAS are a single company; and (vii) the Ministry of Labour took all the necessary actions in relation to SINTRAPRICOL’s request for a declaration of business unity.
7. 295. With regard to this second allegation, the Committee firstly recalls that its mandate consists in determining whether any given legislation or practice complies with the principles of freedom of association and collective bargaining laid down in the relevant Conventions [see para. 14 of the Special procedures for the examination in the International Labour Organization of complaints alleging violations of freedom of association – Annex 1]. Thus, while the legality of the process of the company’s liquidation does not fall within its purview, it is appropriate for the Committee to examine whether this process entailed any acts of anti-union discrimination.
8. 296. On the basis of the information provided by the complainant organizations, the company and the Government, including the attached court rulings, the Committee notes that the liquidation of the company was accompanied by the dismissal of all its trade union leaders, without it having obtained the legal authorization that Colombian law requires for trade union immunity to be lifted. The Committee also observes that, on the basis of the liquidation the Ministry of Labour, without conducting visits to the company premises, filed both the company’s application to close and the administrative labour complaint concerning the illegality of the dismissals of the company’s unionized workers. The Committee observes that it is to be inferred from the above that the Ministry of Labour could not investigate whether the complainant organizations’ allegations – according to which the liquidation of the company resulted in it continuing its productive activity under another corporate name, using non-unionized workers – were founded. The Committee also observes that the courts of first and second instance considered that the company’s dismissal of the 14 trade union leaders in December 2009 violated the legal provisions relating to trade union immunity, but that they did not order that the workers be reinstated nor that their overdue salaries be paid, owing to the fact that the company had been liquidated.
9. 297. In this connection, the Committee recalls that no person should be dismissed or prejudiced in employment by reason of trade union membership or legitimate trade union activities, and it is important to forbid and penalize in practice all acts of anti-union discrimination in respect of employment [see Digest, op. cit., para. 771]. The Committee considers that the liquidation of a company and the fact that the legal person under which the company operated has ceased to exist should not be used as a pretext for anti-union discrimination nor should they be an obstacle to the competent authorities determining whether or not there were acts of anti-union discrimination and, if such practices are shown to have taken place, to sanctioning such illegal acts and ensuring that the affected workers are duly compensated.
10. 298. Recalling that where cases of alleged anti-union discrimination are involved, the competent authorities dealing with labour issues should begin an inquiry immediately and take suitable measures to remedy any effects of anti-union discrimination brought to their attention [see Digest, op. cit., para. 835], the Committee requests the Government to conduct, in a short space of time, an exhaustive investigation into the possibility that the company’s dismissal of its unionized workers, concomitant with its liquidation, was an anti-union act; and to establish, inter alia, whether the productive activities that the company engaged in before it was liquidated continue in the Facatativá plant, whether these activities were transferred to other establishments owned by the corporate group under which the company operated and whether non-unionized company workers were maintained in employment by companies forming part of the corporate group. The Committee requests the Government to inform it, soon, of the results of this investigation and, if acts of anti-union discrimination are identified, to punish these effectively and compensate the workers appropriately.
11. 299. The Committee additionally requests the Government to keep it informed of progress in legal proceedings related to this case.

The Committee’s recommendations

1. 300. In the light of its foregoing interim conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee requests the Government to take the necessary measures to ensure that, in future, the liquidation of companies involves consultations and negotiations with the relevant trade unions.
   • (b) The Committee requests the Government to: (i) conduct, in a short space of time, an exhaustive investigation into the possibility that the company’s dismissal of its unionized workers, concomitant with its liquidation, was an anti-union act; and (ii) to inform it, soon, of the results of this investigation and, if acts of anti-union discrimination are identified, to punish these effectively and compensate the workers appropriately.
   • (c) The Committee additionally requests the Government to keep it informed of progress in legal proceedings related to this case.