Report in which the committee requests to be kept informed of development - Report No 332, November 2003

1. 848. The complaint is set out in a communication dated 24 February 2003 presented by the Toyota Motor Philippines Corporation Workers’ Association (TMPCWA). The complainant also communicated copies of documents relating to the procedures implemented before the national labour and judiciary authorities.
2. 849. The Government replied in a communication dated 25 June 2003 and received on 12 August 2003.
3. 850. The Philippines 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 complainant’s allegations

1. 851. The complaint provides basic information on the TMPCWA, an account of the facts which led to the complaint and submits a number of specific allegations.
   • Brief description of the Association
2. 852. The TMPCWA is an independent labour organization duly registered with the Department of Labor and Employment (DOLE). The TMPCWA is not affiliated to any national or international organization. The members of the union are rank-and-file workers of Toyota Motor Philippines Corporation working in two plant sites.
   • Statement of facts
3. 853. On 4 February 1999, the TMPCWA filed a petition for certification election in order to be recognized as the sole and exclusive bargaining agent of all the rank-and-file employees of Toyota Motor Philippines Corporation assigned to two plant sites. The petition was vigorously opposed by the enterprise and subsequently dismissed by the mediator-arbiter of the Bureau of Labor Relations. Following an appeal filed by the union, the Secretary of DOLE ordered, in a decision of 25 June 1999, the holding of the election. Toyota Motor Philippines Corporation sought, through the available procedural means, to obtain a review of the decision. The election eventually took place on 8 March 2000.
4. 854. The results of the election were the following: 1,063 of the 1,100 employees concerned cast their votes. The votes of 105 employees were declared to be “challenged votes” because the voters were considered to hold managerial positions and thereby, under the Labor Code, barred from membership of a union comprising rank-and-file employees; 503 votes were in favour of the TMPCWA and 440 against. Considering that the quorum and the majority requirements had been met, the union filed a motion to be certified as the sole and exclusive bargaining agent of all the rank-and-file employees of the enterprise. The latter opposed the certification. It was of the view that the 105 votes should be considered as valid votes in particular for the purpose of determining the quorum. It submitted the matter to the mediator-arbiter. The latter confirmed, in a decision of 12 May 2000, that the 105 voters should be excluded from the count of the votes and certified the TMPCWA as the exclusive bargaining agent. The decision was appealed against by the enterprise. The Secretary of DOLE rejected the appeal and confirmed the certification in a decision of 19 October 2000.
5. 855. Following the confirmation of the results of the certification election, on 26 October 2000 the TMPCWA submitted a proposal of collective bargaining agreement to Toyota Motor Philippines Corporation. The latter did not reply to the proposal nor did it answer the follow-up letter sent by the union.
6. 856. In the meantime, the enterprise filed a motion for reconsideration with the Secretary of DOLE concerning the rejection of its appeal on the results of the certification election, whereupon the Office of the Secretary issued an order requiring the parties to attend a “clarificatory” hearing on 21 February 2001. While it decided to attend the hearing, the union also decided to hold on the same day a peaceful assembly in front of DOLE premises to express its dismay at the holding of the hearing. The hearing eventually took place on 22 February 2001 and another one was organized the next day. The union organized assemblies which took place from 21 to 23 February 2001. From the documents submitted by the TMPCWA, it appears that at least for 22 and 23 February 2001, the union informed the enterprise that its members would attend the hearings and join the assembly and that, therefore, they would not come to work. In exchange, the union suggested that the workers concerned would come to work on their rest days.
7. 857. The participation in the assembly led, on 16 March 2001, to the dismissal of 227 union officers and members and the suspension of 64 union members for 30 days by Toyota Motor Philippines Corporation. On the same day, the Secretary of DOLE took a final decision on the certification confirming the TMPCWA as the sole and exclusive collective bargaining agent.
8. 858. These terminations and suspensions, deemed to be illegal by the union, prompted the latter to file a notice of strike. In order to give management time to withdraw the decisions in question, the union did not immediately stage the strike but instead conducted a protest action. Since the decisions were not withdrawn, the union organized a legal and peaceful strike on 28 March 2001.
9. 859. At the request of Toyota Motor Philippines Corporation, the National Labor Relations Commission, a tripartite body, issued a “temporary restraining order” on 4 April 2001, thus providing the company with the necessary justification to disperse the strike participants. On 9 April 2001, while most of the participants had gone home, around 100 policemen and security guards violently dispersed the picket line and forcibly took all the strike paraphernalia. At the same time, workers who did not participate in the strike and management members were escorted inside the plants.
10. 860. On 10 April 2001, and in accordance with article 263(g) of the Labor Code, the Secretary of DOLE certified the dispute to the National Labor Relations Commission, for compulsory arbitration and ordered the workers concerned to return to their work. The union members complied with the order but challenged the decision of the Secretary of DOLE before the Supreme Court. The court sustained the decision.
11. 861. The union questioned the competence of the National Labor Relations Commission over the dispute and did not present its position on the substance of the case. On 9 August 2001, the commission handed down its decision, a copy of which has been transmitted by the complainant. The commission declared that the actions which took place from 21 to 23 February 2001 amounted to illegal strike actions because the union had failed to comply with the procedural requirements applicable to the organization of a strike (the filing of a notice of 30 days or 15 days, the observation of a cooling-off period, the organization of a vote and the submission of the results of the vote to DOLE at least seven days before the strike). Another strike, organized by the union on 23 and 28 May 2001, was also declared illegal because it ignored the order contained in the decision of 10 April 2001 of the Secretary of DOLE. The commission confirmed the dismissal of the 227 workers because of their absence from work that was detrimental to the enterprise’s interest and their concomitant participation in the illegal strike actions of February 2001. The commission ordered the payment of compensation to the workers amounting to one month’s salary per year of service. In addition and in accordance with article 264(a) of the Labor Code, the commission declared that 15 union officers – some of them were included amongst the 227 dismissed workers – had forfeited their employment status by having conducted the illegal strikes from 21 to 23 February and on 23 and 28 May 2001. The enterprise implemented the decision by dismissing more than half of the union members, including all its leaders. In addition, it filed three criminal complaints against several union members and officers for crime of grave coercion. The persons concerned obtained their provisional freedom by posting a bail bond. The complaints are still pending before the Metropolitan Trial Courts. On the other hand, the company obtained a preliminary injunction from the Court of Appeals enjoining the union to demand collective bargaining.
    • Specific allegations
12. 862. In general, the complainant submits that the Government failed to secure the effective observance of Conventions Nos. 87 and 98 to which it is a party. What is more, the Government also took action that impaired the right to organize and to bargain collectively.
    • Undue interference by the Toyota management
    • in the right to self-organization
13. 863. Workers of Toyota Motor Philippines Corporation have not been able to effectively exercise their right to organize. Thus, it took more than ten years for the workers of the enterprise to establish a union duly recognized by the Government. From the moment workers decided to establish a union, the enterprise’s management systematically demonstrated its opposition by filing petitions for cancellation of the union’s registration. It even received support from the Government, when the latter cancelled the registration of the second union that workers had attempted to establish. At this point, it should be specified, in light of the documents submitted by the TMPCWA, that Toyota Motor Philippines Corporation sought the cancellation of the complainant’s registration on 11 March 1999. In support of its request, the company argued that the TMPCWA was in fact formerly known as Toyota Motor Philippines Corporation Employees’ and Workers’ Union (TMPCEWU) whose registration had been cancelled by DOLE, in accordance with article 239 of the Labor Code. On 30 September 1999, DOLE dismissed the petition, the TMPCWA’s registration was thus confirmed.
    • Refusal to bargain collectively
14. 864. Although the TMPCWA had been duly certified as the sole and exclusive bargaining agent, the enterprise’s management refused to negotiate with the union.
    • Anti-union discrimination
15. 865. Members of the TMPCWA failed to receive any protection from the Government when they were illegally dismissed. These dismissals occurred with the support of DOLE, through the National Labor Relations Commission.
    • Restrictions on the right of assembly
16. 866. The right to peaceful demonstrations is one of the essential aspects of trade union rights. This right has been violated by Toyota Motor Philippines Corporation with the support of the Government. Thus the union held protest actions on 21, 22 and 23 February 2001 to express its concern over the holding of hearings on its certification as the sole and exclusive bargaining agent. Due notification was given to the enterprise in this respect. Yet Toyota Motor Philippines Corporation declared that these actions constituted a work stoppage prejudicial to the interest of the company and illegally dismissed the participants.
    • Impairment of the right to strike
17. 867. When the strike was staged, the first act of the enterprise was to lodge a petition for “injunction with prayer for a temporary restraining order” before the National Labor Relations Commission. The petition was granted by the Commission and subsequently led to the dispersion of the strike with the help of the police.
18. 868. The right to strike as a legitimate weapon of the union was effectively diminished when, in accordance with article 263(g), the Office of the Secretary of Labor assumed jurisdiction over the labour dispute although the Toyota industry is not indispensable to the national interest. The effect of this order was to put an end to the strike since workers were instructed to resume work. On the basis of this decision, the enterprise made a selection among the workers who were allowed to return to work and refused those who had been dismissed earlier. The exercise of the right to strike was further violated when some union members were charged with the crime of grave coercion. The TMPCWA argues that its members should not be subject to penal sanctions for the mere fact of organizing or participating in a peaceful strike.
    • Conclusions of the complainant
19. 869. The complainant concludes by inviting the Committee to recommend the reinstatement of the workers who were illegally dismissed, its recognition as the sole and exclusive bargaining agent, and the initiation of negotiations, as well as the withdrawal of the criminal cases filed against some union members.

B. The Government’s reply

1. 870. At the outset, the Government specifies that its reply is submitted in light of the provisions of the Labor Code, as amended, and the pertinent jurisprudence of the Supreme Court. The Government further states that, under its commitment to observe the provisions of Conventions Nos. 87 and 98, it enforces the law on the right to organize and collective bargaining so as not to impair the rights not only of workers but also of employers. Thus, when the Government is called upon to intervene in a labour dispute, it renders a decision only on the basis of the evidence presented before it.
2. 871. With respect to the specific allegations and firstly the allegation of undue interference by the management of Toyota Motor Philippines Corporation, the Government stresses that it does not permit any form of interference by an employer in the internal affairs of a union. In this respect, the Government enjoins the strict compliance with the provisions of article 246 of the Labor Code concerning the prohibition of anti-union discrimination and of interference in the exercise of the workers’ right to organize. As for the cancellation of the registration of a particular union by DOLE, this does not constitute an act of interference since it occurs in the strict application of articles 238 and 239 of the Labor Code and only when the evidence presented warrants the cancellation of the registration.
3. 872. With regard to the refusal to bargain collectively, the Government’s policy is to encourage free collective bargaining. On the other hand, except when the Secretary of DOLE assumes jurisdiction over a labour dispute, DOLE cannot compel the parties to enter into a collective bargaining agreement, all the more so when there are unresolved issues between them. Any aggrieved party may file a petition with the competent court.
4. 873. With respect to anti-union discrimination, the Government points out that, under the exercise of management prerogative, an employer enjoys a wide latitude of discretion in running its affairs and has the authority necessary to ascertain what actions are prejudicial to his interest. Under these circumstances, while the holding of peaceful demonstrations is not prohibited as such, when it results in a work stoppage which may prejudice the employer’s interest, the latter is authorized to employ drastic measures to protect his right. Further, the Government emphasizes that in the case under consideration, the National Labor Relations Commission sustained the dismissal of the participants in the peaceful demonstration, on the basis of strong evidence presented before it.
5. 874. Finally, concerning the right to strike, the Government stresses that the alleged peaceful assembly held by the union from 21 to 23 February 2001 was illegal because of procedural flaws. The Government points out that any concerted activity in connection with a labour dispute, which results in work stoppages is considered under the law as a strike. The Labor Code provides for several reasonable procedural requirements applicable to the exercise of the right to strike such as a strike vote (article 263 of the Labor Code). The Government indicates that the Supreme Court has ruled that the strike vote is mandatory because many disastrous strikes had been staged in the past based merely on the insistence of minority groups within the union. The Government underlines that the failure on the part of the TMPCWA to secure the necessary strike vote before it staged the alleged peaceful assembly constitutes a clear violation of the law. Regarding the Secretary of Labor and Employment’s intervention, the Government would like to reiterate that the basis of the Secretary’s competence is article 263 of the Labor Code. This provision allows the Secretary of Labor and Employment to submit a dispute causing or likely to cause a strike or lockout in “an industry indispensable to the national interest” to compulsory arbitration before the National Labor Relations Commission. When the Secretary exercises his power under this article, “all the striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and re-admit all workers under the same terms and conditions prevailing before the strike or lockout”.
6. 875. As for the criminal charges pressed against some members of the TMPCWA, the Government indicates that the matter is currently being handled by the competent court. Therefore, the Government will not make any comment so as not to influence the court, in accordance with the principle of sub-judice.

C. The Committee’s conclusions

1. 876. The Committee notes that the TMPCWA alleges the non-observance of Conventions Nos. 87 and 98 by the Government. In support of its contention, the complainant alleges a number of violations of the Conventions by Toyota Motor Philippines Corporation, with the support of the Government, and by the Government itself. The Committee notes, on the other hand, that the Government asserts that it has abided fully by both Conventions; to that end, it has strictly enforced the applicable national legislation. The Committee has taken note in this regard of the Government’s statement that its observations on the complaint are made in light of the Labor Code and the relevant decisions of the Supreme Court.
2. 877. The Committee notes that the actions and decisions questioned by the complainant result from the recourse to various procedures, and the application of the Labor Code by the governmental and labour authorities. The Committee is thus led to examine the compatibility of the national legislation with the principles of freedom of association and Conventions Nos. 87 and 98. This question of compatibility arises mainly in respect of two fields: the certification of a union as the exclusive collective bargaining agent and the exercise of the workers’ right to strike. At this point, the Committee must recall that it has already come across these two issues when examining the last two complaints lodged against the Government of the Philippines (Cases Nos. 1826 and 2195).
3. 878. With respect to the certification process, the Committee notes that it took more than one year to organize the election and another year to have the complainant confirmed as the exclusive bargaining agent within Toyota Motor Corporation. The Committee notes that those delays resulted from the various petitions, appeals and motions filed by the enterprise with the labour authorities and, in particular, with the Secretary of DOLE who has the final say on the matter.
4. 879. In these circumstances, the Committee believes that it is relevant to refer to the principles of freedom of association recalled in its examination of Case No. 1826 as well as to some of its conclusions thereon. The Committee has stated on previous occasions that it is not necessarily incompatible with Convention No. 98 to provide for the certification of the most representative union in a given unit as the exclusive bargaining agent for that unit. This is the case, however, only if a number of safeguards are provided including certification to be made by an independent body [see 302nd Report, para. 407, and Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 834]. The Committee therefore reiterates once more its request that the Government reconsider the relevant provisions, with a view to establishing a legislative framework allowing for a fair, independent and speedy certification process and providing adequate protection against acts of interference by employers in such matters [see 326th Report, para. 139]. The Committee requests the Government to keep it informed in this respect.
5. 880. With regard to the absence of reply to the proposal of collective bargaining, the Committee notes that it is linked to the challenge of the results of the certification election by Toyota Motor Philippines Corporation. Nonetheless, the Committee would like to recall the following principles to address the Government’s comment that it cannot compel parties to enter into a collective bargaining agreement especially when there are unresolved issues between them, and that a petition may be lodged with the competent court. The Committee recognizes that it has considered that nothing in Article 4 of Convention No. 98 places a duty on the Government to enforce collective bargaining by compulsory means with a given organization; such an intervention would clearly alter the nature of bargaining [see Digest, op. cit., para. 846.] On the other hand, the Committee must recall the importance it attaches to the obligation to negotiate in good faith for the maintenance of the harmonious development of labour relations [see Digest, op. cit., para. 814]. Further the principle that both employers and trade unions should negotiate in good faith and make efforts to reach an agreement means that any unjustified delay in the holding of negotiations should be avoided [Digest, op. cit., para. 816]. In these circumstances, the Committee trusts, since the TMPCWA has been certified as the exclusive collective bargaining agent, that the Government will make every effort to ensure that the TMPCWA and Toyota Motor Philippines Corporation negotiate in good faith with a view to reaching a collective agreement. It asks the Government to keep it informed in this regard.
6. 881. Turning now to the issue of the exercise of the right to strike, the Committee notes that the problem in this case lies primarily with, on the one hand, the intervention of the Secretary of DOLE under article 263(g) of the Labor Code and, on the other hand, with the dismissals of workers for their participation in a strike declared to be illegal under the national legislation as well as the criminal charges pressed against some union members.
7. 882. With respect to the intervention of the Secretary of DOLE, the Committee notes that it was prompted by the strike organized on 28 March 2001, following the dismissal of the 227 workers. The Committee notes that the legality of this strike has not been questioned; indeed, a notice had been filed by the union on 28 February 2001 and the strike started one month later. The Committee notes, as it did in examining Case No. 2195, that article 263(g) permits the Secretary of Labor and Employment to submit a dispute to compulsory arbitration, thus bringing an end to a strike, in situations going beyond essential services or an acute national crisis. The provision endows the Secretary with such authority where he or she is of the opinion that there exists “a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest” [see 329th Report, para. 736].
8. 883. The Committee notes that according to recent information given by the Government in Case No. 2195, DOLE has submitted a proposal of amendment with respect to article 263(g) to the labour committees of the Senate and of the House of Representatives. The proposal would limit the intervention of the Secretary of DOLE to disputes involving “essential services”. Bearing in mind this information, the Committee wishes to underline the following principles of freedom of association already recalled in Case No. 2195. To determine situations in which a strike could be prohibited, the criterion which has to be established is the existence of a clear and imminent threat to life, personal safety or health of the whole or part of the population [see Digest, op. cit., paras. 540 and 545]. Furthermore, whenever a total and prolonged strike in a vital sector of the economy might cause a situation in which the life, health or personal safety of the population might be endangered, a back-to-work order might be lawful, if applied to a specific category of staff in the event of a strike whose scope and duration could cause such a situation. However, a back-to-work requirement outside such cases is contrary to the principles of freedom of association [see Digest, op. cit., para. 572]. Therefore, like the Committee of Experts on the Application of Conventions and Recommendations, the Committee urges the Government to pursue the measures taken to amend article 263(g) of the Labor Code in order to bring it into full conformity with the principles of freedom of association. The Committee asks the Government to keep it informed in this regard.
9. 884. With regard to the sanctions imposed upon the 227 workers, namely the loss of their jobs, the Committee would like to underline the following elements. First, in light of the National Labor Relations Commission’s decision, the reason for these dismissals was the absence from work of the workers concerned to participate in the assemblies held from 21 to 23 February 2001 and the loss thus caused to the company. Second, the Committee has duly noted that these assemblies have been considered by the National Labor Relations Commission as illegal strikes because of the non-observance of the various procedural requirements applicable to strike actions under article 263(c) of the Labor Code. The Committee notes also that the complainant indicates that these assemblies were peaceful and that the Government does not challenge this allegation; at one point, its reply even refers to the “dismissal of participants in the peaceful demonstration”.
10. 885. Moreover, the Committee notes that union officers have been subject to other types of measures, despite the fact that some of them were amongst the 227 workers dismissed. Thus 15 union officers were declared to have forfeited their employment status under article 264(a) of the Labor Code by the National Labor Relations Committee. The Committee notes that under article 272 of the Labor Code, any person who infringes article 264 shall be punished by the payment of a fine and/or imprisonment. Further, criminal proceedings were initiated by the enterprise against some union officers. In this respect, the Committee cannot, from the information at its disposal, determine the identity of the officers concerned and the grounds for these proceedings, although it is likely that these criminal charges have been pressed under article 272 of the Labor Code. The TMPCWA alleges that the proceedings result from the organization of a peaceful strike and the Government has not commented on this allegation.
11. 886. In view of the considerations made above, the Committee must recall that it is of the view that sanctions, such as massive dismissals in respect of strike actions, should remain proportionate to the offence or fault committed [see 329th Report, para. 738]. Further, no one should be deprived of their freedom or be subject to penal sanctions for the mere fact of organizing or participating in a peaceful strike [see Digest, op. cit., para. 602]. While the Committee recalls that it has, in the past, considered that the obligation to give prior notice to the employer before calling a strike and to take strike decisions by secret ballot are acceptable, it considers that the dismissals of the 227 workers and the union officers entail serious consequences for the workers concerned. Furthermore, concerning the union officers declared to have forfeited their employment status by the National Labor Relations Commission, the Committee recalls that it has always considered that sanctions for strike action should be possible only where the prohibitions in question are in conformity with the principles of freedom of association [see 329th Report, para. 738]. The Committee notes in this respect that the measure was decided by the commission also in view of the organization of the strike on 23 and 29 May 2001 because it infringed the Secretary of DOLE’s order of 10 April 2001. As mentioned above, such an order is not compatible with the principles of freedom of association and therefore, the union officers concerned cannot be sanctioned for having ignored it. The initiation of criminal proceedings for organizing and participating in a peaceful strike also constitutes a disproportionate measure. The Committee notes once again, like the Committee of Experts, that the origin of the problem lies with the provisions of the Labor Code which set forth disproportionate sanctions for participation in an illegal strike.
12. 887. The Committee notes that the February 2001 actions were considered to be illegal strikes. However, bearing in mind the serious consequences of the dismissals for the workers concerned, the Committee requests the Government to initiate discussions in order to consider the possible reinstatement in their previous employment of the 227 workers of Toyota Motor Philippines Corporation as well as of the union officers declared to have lost their employment status by the National Labor Relations Commission and who are not included among the 227 workers, without discrimination based on trade union activities. If reinstatement is not possible, adequate compensation should be paid to the workers concerned. The Committee asks the Government to keep it informed in this regard, as well as of any measures taken to withdraw the criminal charges pressed against some union members and officers.
13. 888. Finally, concerning the allegation of violent dispersion of the workers participating in the strike by the police on 9 April 2001, to which the Government has not replied, the Committee must underline that the authorities should resort to the use of force only in situations where law and order is seriously threatened [see Digest, op. cit., para. 580].
14. 889. In view of the considerations made above and of their similarities with those made in the examination of Cases Nos. 1826 and 2195, the Committee considers that the current legislative framework is not fully conducive to harmonious labour relations; there are recurrent difficulties in relation to the certification process and the exercise of the right to strike. In the Committee’s view, these difficulties are prompted by the fact that workers’ organizations and employers can have recourse in a rather systematic manner to the public authorities (judiciary, administrative and labour authorities) to settle issues between them. The Committee is of the view that the labour relations system does not sufficiently promote dialogue between the social partners. The Committee therefore suggests that steps be taken to reform book five on labour relations of the Labor Code with a view to developing harmonious labour relations in a more effective manner and that, in particular, collective bargaining be conducted in good faith.