Definitive Report - Report No 388, March 2019

Case No 3158 (Paraguay) - Complaint date: 18-JUN-15 - Closed

Allegations: the complainant organizations allege the absence of collective bargaining at a binational electrical power plant, and transfers and dismissals of workers as a result of a strike and non-registration of their executive committees

1. 459. The complaint is contained in a communication dated 18 June 2015 from the United Workers’ Federation (Authentic) (CUT-A), the National Workers’ Union of Yacyretá (SINATRAY), the Paraguayan Workers’ Union of Yacyretá – Technical Department (SITPAY-DT), the Union of Officials (Authentic) of the Yacyretá Binational Entity – Paraguayan Sector (SIFEBY-A) and the Union of Safety and Information Sector Officials of the Yacyretá Binational Entity (SIFUSEBY).
2. 460. The Government sent its partial observations in communications dated 6 May 2016, 4 February and 7 March 2019.
3. 461. 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. The complainants’ allegations

1. 462. In their communication of 18 June 2015, the complainant organizations allege that, since its establishment in 1973, the Argentine-Paraguayan Yacyretá electrical power plant (hereinafter: binational entity) has not concluded any collective agreement on conditions of work with the trade unions, despite having an obligation to do so under the terms of section 334 of the Paraguayan Labour Code, which provides that: “Any enterprise that employs 20 or more workers shall have the obligation to conclude a collective agreement on conditions of work. The general conditions shall be negotiated with any organized trade union that exists there”. The complainants also allege that although the management of the binational entity, by Decision No. 15802 of 22 April 2014, awarded a 30 per cent wage increase to workers in the Argentine sector, workers in the Paraguayan sector were granted a 10 per cent wage increase, which was never implemented in practice. They also allege that although the management, by Decision No. 15714 of 7 April 2014, granted the payment of special ex gratia compensation to workers in both sectors, the binational entity has refused to implement the terms of the decision for workers in the Paraguayan sector.
2. 463. The complainant organizations indicate that although two tripartite meetings were held with the labour administrative authority on 20 and 30 June 2014, the binational entity refused to examine the grievances on the grounds that they were the subject of legal proceedings and that, instead of accepting the claims, it decided by a decision of 17 December 2014 to make Decision No. 15802 null and void, thus depriving the workers in both the Paraguayan and Argentine sectors of the wage increase which had been awarded. According to the complainants, it was because of these circumstances and the binational entity’s refusal to engage in collective bargaining that they informed the management on 15 January 2015 that a strike would be held from 2 February 2015 for 30 days in support of the call for a collective agreement on conditions of work and for payment of the wage increase and the special ex gratia compensation.
3. 464. According to the complainants, on 5 February 2015, and as a result of mediation by the governor of the department of Misiones, it was agreed to end the strike (which had been under way since 2 February) and to set up a dialogue round table. On 20 and 26 February 2015, a series of agreements were signed by the binational entity and the complainant organizations, in which the management of the binational entity agreed, inter alia, to begin negotiations for a collective agreement on conditions of work. The complainants object that these agreements were never implemented and that, on the contrary, workers were transferred or dismissed as a result of the strike. The complainants also allege that the labour administrative authority also conducted reprisals against them, by not recording and validating the unions’ documents for registration of their new executive committees.

B. The Government’s reply

1. 465. In its communications of 6 May 2016, 4 February and 7 March 2019, the Government sends its observations and the binational entity’s reply. The Government indicates that the binational entity is an undertaking which was established under a treaty signed by the Republic of Paraguay and the Argentine Republic on 3 December 1973 and is governed by the provisions of the treaty and its annexes and that, with regard to labour matters, is governed by the “labour and social security protocol” adopted in Paraguay through Act No. 606 of 19 November 1976. The Government states that the issue of the signature of a collective agreement on conditions of work was the subject of a labour court action brought by several employee unions at the binational entity, under the title Union of professional officials of the Yacyretá Binational Entity et al v Yacyretá Binational Entity re obligation to conclude collective agreement on conditions of work. In this regard, the Government states that, although the First-Instance Civil and Labour Court (First Rota) of the Capital, Secretariat No. 1, decided in a ruling of 28 October 2013 to accept the complaint filed by the trade unions with the award of costs and ordered the enterprise to conclude and sign a collective agreement on conditions of work within 90 days, the Labour Appeals Court of the Capital (Second Chamber), in Judgment No. 83 dated 26 August 2014, overturned the first-instance ruling (the Government has provided the text of the said rulings).
2. 466. With respect to the dismissals allegedly made as a result of the strike held from 2 to 5 February 2015, the Government indicates that these were due to the fact that many working projects had finalized and that all dismissals were done in accordance with the Labour Code and the entity’s internal regulations.
3. 467. As regards Decision No. 15802 of April 2014, whereby a wage increase was agreed, the binational entity indicates that this was made null and void in December 2014 because the increase had been awarded on account of the situation of high inflation in Argentina, which directly affected the purchasing power of officials in the Argentine sector, an issue which, in any case, is being examined by the courts. The binational entity emphasizes the validity of Decision No. 15714 of 7 April 2014, providing for the payment of special ex gratia compensation, with due and effective implementation without discrimination in both sectors and an extension of its application until 2017 by Executive Board Decisions Nos 16438/15 and 16591/15.
4. 468. According to the binational entity, the tripartite meeting convened by the Labour Directorate-General on 30 June 2014 was not successful because the trade unions had filed a judicial complaint prior to the meeting and since this was still pending, the substantive issue had first to be elucidated by the judicial authorities. As regards the second tripartite meeting convened for 13 August 2015 at the request of the complainants, the Collective Dispute Mediation Department indicated in a note to the binational entity that it had not taken place because of lack of interest on the part of the plaintiff.
5. 469. The Government also affirms that the processes for registration of the union executive committees have not been obstructed and that, as revealed by a note drawn up on 3 August 2018 by the Technical Office of the Collective Relations and Union Registration Department at the Ministry of Labour, Employment and Social Security (attached by the Government), the executive committees of the following unions, inter alia, at the binational entity were registered: SINATRAY (latest executive committee as from 11 May 2015), SITPAY-DT (latest executive committee as from 24 August 2016), SIFEBY-A (latest executive committee as from 21 July 2015) and SIFUSEBY (latest executive committee as from 10 August 2017).

C. The Committee’s conclusions

1. 470. The Committee observes that the complainant organizations in the present case allege that a binational electrical power plant (hereinafter: binational entity) established more than 40 years ago has not negotiated any collective agreement on conditions of work. The complainants also allege that workers were dismissed or transferred following a strike held from 2 to 5 February 2015 and that the labour administrative authority conducted reprisals against the above-mentioned organizations by not recording or validating the documents for registration of their new executive committees.
2. 471. With regard to collective bargaining, the Committee notes the complainants’ allegations that: (i) ever since it was established, the binational entity has not negotiated a single collective agreement on conditions of work, despite its obligation to do so under section 334 of the Paraguayan Labour Code; (ii) a strike was held from 2 to 5 February 2015 in support, inter alia, of the call for a collective agreement on conditions of work; and (iii) on 26 February 2015, in the context of a dialogue round table set up after the end of the strike, the management of the binational entity signed an agreement with the complainants in which, inter alia, an undertaking was given to start negotiations for a collective agreement on conditions of work but an agreement was never adopted. In this regard, the Committee notes the Government’s indications that: (i) with regard to labour matters, the binational entity is governed by the “labour and social security protocol” adopted in Paraguay through Act No. 606 of 19 November 1976 (the Committee has noted that, under section 4 of the protocol, the trade union rights of workers at the binational entity are determined by the laws of the country in which the workers are hired); and (ii) the issue of the adoption of the collective agreement on conditions of work was the subject of a labour court action brought by several employee unions at the binational entity, with the title Union of professional officials of the Yacyretá Binational Entity et al v Yacyretá Binational Entity re obligation to conclude collective agreement on conditions of work, and although in a ruling issued on 28 October 2013, the First-Instance Civil and Labour Court (First Rota) of the Capital, Secretariat No. 1, accepted the complaint filed by the trade unions and ordered the enterprise to conclude and sign a collective agreement on conditions of work within 90 days, the Labour Appeals Court of the Capital (Second Chamber), in Judgment No. 83 of 26 August 2014, overturned the first-instance ruling.
3. 472. The Committee observes that the allegation relating to the absence of collective bargaining at the binational entity was examined recently by the Committee in the context of another case concerning that entity. On that occasion, the Committee recalled that measures should be taken 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, and it asked the Government to take the necessary steps to promote collective negotiation in good faith within the binational entity on conditions of work [see Case No. 3127, 386th Report, June 2018, paras 546–551]. Furthermore, the Committee observes that, according to the Government, in 2014 the Appeals Court overturned a first-instance ruling which obliged the enterprise to conclude and sign a collective agreement on conditions of work within 90 days. The Committee notes that the Government has provided the text of the said rulings and observes that in its conclusions, the Appeals Court emphasized that at issue was not a collective agreement fully agreed by the parties and ready for signature, but rather a draft collective agreement which still needed to be examined and approved by the entity’s competent authorities. The Appeals Court also stressed that, as set out in the entity’s internal regulations, any decision that would create an obligation to the entity had to be taken by both directors and not only by one of them (in the present case only one of the two directors had been involved in the negotiation of the draft collective agreement). The Appeals Court concluded that the entity was therefore not obliged to sign the draft collective agreement and that the draft could only be binding to the entity after having been accepted and approved by it. The Committee takes due note of the said ruling and, recalling that it is following up this issue in Case No. 3127, invites the Government to examine, within the framework of the entity’s regulations, the conditions under which collective bargaining can be fully exercised.
4. 473. With respect to the dismissals allegedly made as a result of the strike held from 2 to 5 February 2015, the Committee notes the Government’s indication that these were due to the fact that many projects had been finalized and that all dismissals were done in accordance with the Labour Code and the entity’s internal regulations. The Committee also observes that the complainants do not identify any particular worker who was supposedly dismissed as a result of the strike. Although the complainants attached a letter dated 2 March 2015 signed by the legal adviser of the binational entity indicating that the dismissal of Mr Alberto Andrés Bernal Ruíz was due to policies implemented by the binational entity as part of a human resources optimization programme, there is no indication in this letter or in any other attached document of the date when the worker was dismissed or whether the dismissal was due to his trade union activities or his participation in the strike. Nor do the complainants indicate whether any judicial appeal was made against the dismissal. Under these circumstances, and in in the absence of substantial information on the dismissals, the Committee will not pursue its examination of these allegations but invites the Government to engage with the social partners concerned with a view to ensuring that they were not based on anti-union motives.
5. 474. The Committee observes that the Government has not sent its observations concerning the transfers allegedly made as a result of the strike held from 2 to 5 February 2015. The Committee also observes that the complainants do not identify any particular worker who was supposedly transferred as a result of the strike. The Committee observes that the documents attached by the complainants show that: (i) on 15 January 2015, the trade unions sent a letter to the management of the binational entity informing it of the decision to hold a 30-day strike from 2 February; (ii) by Decision No. 1047 of 19 January 2015, the director of the binational entity ordered the transfer of six officials who would remain available to the human resources sector; and (iii) in the agreement concluded on 26 February 2015 between the complainants and the binational entity, in the context of a dialogue round table set up after the end of the strike, the binational entity undertook to review the transfer of one of the workers, Mr Ramón Rodríguez, and indicated that the other officials who had been transferred were the subject of an administrative investigation. The Committee invites the Government to engage with the social partners concerned with a view to ensuring that these transfers were not based on anti-union motives.
6. 475. Lastly, as regards the allegation that the labour administrative authority conducted reprisals against the complainants, by not recording or validating the documents for registration of the new executive committees, the Committee notes that, as shown by a note dated 11 December 2015 from the Technical Office of the Collective Relations and Union Registration Department at the Ministry of Labour, Employment and Social Security (attached by the Government), the executive committees of the following complainant unions were registered as follows: SINATRAY (latest executive committee as from 11 May 2015), SITPAY-DT (latest executive committee as from 13 August 2015), SIFEBY-A (latest executive committee as from 21 July 2015) and SIFUSEBY (latest executive committee as from 25 August 2015).

The Committee’s recommendations

1. 476. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) Recalling that the Committee is following up on the issue of collective bargaining in this specific context in Case No. 3127, it invites the Government to examine, within the framework of the entity’s regulations, the conditions under which collective bargaining can be fully exercised.
   • (b) The Committee invites the Government to engage with the social partners concerned with a view to ensuring that the dismissals and transfers referred to in this case were not based on anti-union motives.