Definitive Report - Report No 325, June 2001

1. 216. The complaint is contained in communications from the National Confederation of Federations and Trade Unions of Food Industry, Tourism, Hotel and Restaurant, and Related and Allied Workers (COTIACH) dated 3 October and 12 December 2000.
2. 217. The Government sent its observations in a communication dated 30 March 2001.
3. 218. Chile 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. 219. In its communications of 3 October and 12 December 2000, the National Confederation of Federations and Trade Unions of Food Industry, Tourism, Hotel and Restaurant, and Related and Allied Workers (COTIACH) alleges that since approximately 1986, the enterprise Agrícola Ariztía Ltda. periodically obliges its workers to sign, under threat of dismissal or other reprisals, instruments which it calls “collective labour agreements”. According to the COTIACH, these documents contain labour-related provisions and are drawn up by the enterprise without any worker participation or any type of real bargaining that would afford them collective status. In fact, the workers do not actually sign these “agreements” but instead a blank sheet of paper before the head of personnel which contains their name and identity card details, and this document is subsequently attached to the instrument drawn up by the enterprise and sent to the Labour Inspectorate for registration.
2. 220. The complainant adds that the purpose of this practice is to prevent workers at the enterprise using their constitutional right to collective bargaining. Each time a trade union tries to bargain collectively on behalf of its members, Agrícola Ariztía Ltda. objects to the involvement of any of its workers who have signed the abovementioned agreements, given that as they are in principle covered by a collective agreement currently in force, according to Chilean labour standards (articles 328(2) and 314 of the Labour Code) they are not entitled to engage in further collective bargaining until the end of the term of application of the relevant instruments. However, even if the workers have signed such instruments, they do not constitute collective agreements. According to the COTIACH, article 314 of the Labour Code that authorizes such practices is contrary to the principles of freedom of association: the bargaining in question takes place without trade union participation and the workers involved do not have the right to strike. These instruments, when they are indeed signed by workers, have been called “multiple individual contracts” or contracts of adhesion, as from a legal standpoint they constitute individual labour contracts.
3. 221. The complainant adds that on 11 November 1999, company union No. 2 submitted a draft collective labour contract, on behalf of 232 affiliated workers, and that the enterprise objected to 221 of the workers participating in the negotiations, maintaining that they had signed “collective agreements” and pointing out that other workers had left the enterprise, leaving only six workers entitled to be represented by the trade union in the collective bargaining process. The COTIACH states that following a detailed study of the facts, the Labour Inspectorate decided that the instruments cited by the enterprise to prevent the majority of the unionized workers participating in the bargaining process did not constitute collective instruments and ordered the enterprise to include these workers in the negotiations (Decision No. 35 of 29 November 1999). The enterprise lodged an application for protection with the Court of Appeal of San Miguel, considering that the Labour Inspectorate had violated its right of ownership by refusing to recognize the guarantees and provisions contained in the collective agreements.
4. 222. The COTIACH states that the Court of Appeal declare Decision No. 35 issued by the Labour Inspectorate null and void because it affected the right of ownership of Agrícola Ariztía Ltda., and this judgement was confirmed by the Supreme Court of Justice. Nevertheless, the complainant indicates that Agrícola Ariztía Ltda. has recently been sanctioned by the Second Labour Court of San Miguel for engaging in anti?union practices against the complainant trade union. More specifically, the judgement handed down by the court magistrate indicates that the enterprise’s practice of making workers sign such “collective labour agreements” is a violation of freedom of association and imposes a fine on the enterprise.
5. 223. According to the COTIACH, the impact of the above actions on trade union No. 2 is clear: at the enterprise there are a dozen “collective agreements” covering a varying number of workers (between 19 and 78) and they all have different periods of validity, allowing Agrícola Ariztía Ltda. to ensure that the trade union will never be able to bargain collectively on behalf of all its members.
6. 224. Lastly, the complainant alleges that Agrícola Ariztía Ltda. has also engaged in other conduct in violation of freedom of association. More specifically, it alleges that workers joining the enterprise are constantly pressurized not to join the trade union and that affiliated workers are pressurized to end their membership. Just one fact suffices to demonstrate the magnitude of anti-unionism in this enterprise: company union No. 2 was established five years ago with over 400 members and by the end of 1999 its members had fallen to just 132, in other words approximately 300 workers had left the organization, many of whom had been dismissed, while others had given in to the enterprise’s pressures and threats.

B. The Government’s reply

1. 225. In its communication of 30 March 2001 the Government states that according to the information registered by the Labour Services in 1999 and 2000, the enterprise Agrícola Ariztía Ltda. concluded the following collective agreements: collective agreement signed on 16 March 1999 with 113 workers, in force until 28 February 2002; collective agreement signed on 25 October 1999 with 51 workers, in force until 30 September 2002; collective agreement signed on 22 March 2000 with 54 workers, in force until 20 February 2003; collective agreement signed on 14 April 2000 with 43 workers, in force until 31 March 2003; collective agreement signed on 24 May 2000 with 38 workers, in force until 30 April 2003; and collective agreement signed on 25 October 2000 with 119 workers, in force until 30 September 2003. All these agreements affect employees’ work at the establishment situated in the commune of La Cisterna, Santiago. Two further agreements relate to workers in establishments in the city of Melipilla: collective agreement signed on 1 May 2000 with 46 workers, in force until 31 May 2003; and collective agreement signed on 1 September 2000 with 15 workers, in force until 31 August 2003.
2. 226. The Government adds that the Municipal Labour Inspectorate of Santiago Sur and the Provincial Labour Inspectorate of Melipilla, in whose jurisdictions establishments belonging to the enterprise are located, have conducted a number of investigations into these collective agreements to determine whether they are in fact the result of true collective bargaining and are consequently legally binding as such in the terms stipulated in article 314 of the Labour Code, which reads as follows:
   • Without prejudice to the regulated collective bargaining procedure, with the prior agreement of the parties, at any time and without restrictions of any type, it shall be possible to initiate, between one or more employers and one or more trade union organizations or groups of workers, irrespective of the number of their members, direct negotiations that shall not be subject to rules of procedure, to agree on common conditions of work and remuneration or other benefits, applicable to one or more enterprises, premises, sites or establishments for a specific period of time. Temporary or provisional trade unions or groups of workers shall be able to reach agreement with one or more employers on common conditions of work and remuneration for specific sites or tasks of a temporary or seasonal nature. These negotiations shall not be subject to the procedural rules established for regulated collective bargaining, neither will they give rise to the rights, prerogatives and obligations indicated in this Code. The collective instruments signed shall be called collective agreements (convenios colectivos) and shall have the same effects as collective contracts (contratos colectivos), without prejudice to the special rules referred to in article 351.
3. 227. The Government states that from the investigations carried out, which include confidential interviews with workers covered by the collective agreement in question, trade union officials and enterprise representatives, it has been possible to conclude repeatedly that none of the instruments reviewed can be qualified as a collective agreement resulting from the negotiation process laid down in article 314, as the facts considered clearly demonstrate an absence of collective consent or real participation in the supposed negotiations, which supports the view that these agreements are in fact “contracts of adhesion” whereby workers are asked individually to accept a specific contractual proposal offered by Agrícola Ariztía Ltda.
4. 228. The Government indicates with respect to this practice that the Labour Inspectorate developed a repeated and uniform approach, establishing that the legislator shall only consider as a collective agreement one which is signed by a collective subject, in other words, as far as workers are concerned, by employees grouped together for that purpose, which is only the case when they are acting through one or more trade union organizations or when they have agreed together to do so.
5. 229. A review of the various investigative reports into this subject reveal a number of elements in support of the conclusion that the agreements in question do not represent the collective will, for example the absence of the participation or consent of the workers’ group, whose signature appears on the document, is demonstrated by the fact that the proposed agreement is submitted on the initiative of the enterprise, which defined its content in advance, with the employees participating little, if at all. Neither is there any participation through representatives elected or appointed by the workers’ group as, according to the investigators’ findings in all the cases in point, either the enterprise appoints them or they nominate themselves. Similarly, the shortness of the process is striking, and once again points to a lack of worker participation, as the period between the presentation of the offer by the enterprise and the signing of the agreement is generally only two days, and during this time the workers do not have access to the proposed text; and the (two) meetings held with the groups are extremely short and involve virtually no discussion, as they consist of the enterprise providing information about and inviting acceptance of the proposed offer. Lastly, the employees, grouped together in sections, are called upon to sign the document, a procedure which is carried out in the presence of a person of authority.
6. 230. With reference to the specific situation of regulated collective bargaining by workers’ union No. 2, the Government indicates that this began on 11 November 1999 when the corresponding draft collective contract was submitted to the enterprise; a total of 232 workers from the La Cisterna establishment participated. In its reply, the enterprise objected to the participation of 221 of the workers, owing to other collective agreements being in force which excluded them from participating in the process. The negotiating committee submitted an objection of legality to the Labour Inspectorate which conducted the requisite investigation in accordance with the prevailing administrative procedures; results were the same as those already mentioned, that is to say that the collective agreements cited by the enterprise were not in fact collective and consequently the Inspectorate established in Decision No. 35 of 29 November 1999 (handed down by the Municipal Labour Inspector of Santiago Sur) that the workers in question could negotiate. Given this situation, Agrícola Ariztía Ltda. lodged an application for protection with the Court of Appeal of San Miguel (collegiate, civil, ordinary court) against the Municipal Labour Inspectorate of Santiago Sur. The Court of Appeal of San Miguel accepted the appeal and in a judgement dated 19 April 2000 indicated in the part containing the verdict and sentence:
   • … the application for protection lodged in record 1 by Agrícola Ariztía Ltda. against the Municipal Labour Inspectorate of Santiago Sur is accepted and its appeal against Decision No. 35 of 29 November 1999 is declared null and void; the Inspectorate shall decide on the appropriate legal course of action with respect to the employer’s observations concerning the draft collective contract submitted by company union No. 2.
   • The Municipal Labour Inspectorate of Santiago Sur lodged a remedy of appeal against the ruling of the Court of Appeal of San Miguel before the Supreme Court but, in a judgement dated 10 May 2000, the Supreme Court upheld the appealed judgement of 19 April 2000. On this point it should be noted that the judgement of the Court of Appeal of San Miguel reiterates what to date constitutes the majority opinion of the courts of justice in this matter; it considers that labour inspectorates are not competent to try or to rule on the legal nature of collective instruments, as it is the labour courts that have exclusive jurisdiction in this matter. Consequently the labour inspectorates, by ruling in the manner that the Labour Inspectorate of Santiago Sur did, would be encroaching on jurisdictional powers which, in the view of the courts, is illegal and arbitrary.
7. 231. The Government points out that in practice this judgement meant that the regulated negotiations of union No. 2 could not be concluded as the number of workers participating in the process was drastically reduced which obviously translated into a weakening of the negotiations and of the trade union organization. This organization had previously brought an action against the enterprise for unfair practices that infringed collective bargaining before the Second Labour Court of San Miguel, basing its action, among other things, on the situation relating to the existence of numerous collective agreements. In a judgement dated 5 January 2000, the Court imposed a fine on Agrícola Ariztía Ltda. Whereas clause No. 8 of the judgement establishes as follows:
   • The actions of the defendant established in the above whereas clauses constitute an unfair practice that infringes upon collective bargaining as legally defined in article 387(d) of the Labour Code, that is “any arbitrary or abusive practice intended to restrict collective bargaining or render it impossible”, given the fact that as the workers were bound by a collective agreement in force they found themselves prevented from participating in any collective bargaining that might be initiated by the complainant trade union, having been pressurized into agreeing to conclude the agreements referred to, which demonstrates that said practice is the true intention of the employer when he proposes such instruments.
   • Nevertheless, this judgement cited in the application for protection by the Labour Inspectorate of San Miguel, was rejected by the Court of Appeal, which in the fourth whereas clause of its judgement indicated that the matter of unfair practice in collective bargaining, the trying and punishing of which constitute a process which is regulated by the Labour Code, and infringements of constitutional guarantees that should be reviewed by way of applications for protection, were separate issues.
8. 232. Lastly, the Government states that all the information in the above paragraphs confirms that the enterprise’s repeatedly observed conduct has led to a situation where there is practically no trade union activity within it. Currently union No. 2 has a very small number of members. Likewise, the enterprise has managed to eliminate collective bargaining, keeping the majority of its employees subject to collective agreements resulting from processes it controls itself. However, the fact that pressure was placed on the workers to sign the agreements presented by their employer has been recognized and explicitly established in the judicial decision of the Second Labour Court of San Miguel which censured the enterprise’s unfair practices regarding collective bargaining, stating in its seventh whereas clause:
   • The workers were pressurized in order to obtain their consent to sign the collective agreements under reference, either through the threat of dismissal or transfer to the general service section, with the corresponding reduction in their remuneration, or by offering them a sum of money for their signature, a situation which was acknowledged by the defence witnesses.
   • From all the background information provided it can be seen without a shadow of a doubt that the enterprise Agrícola Ariztía Ltda. has maintained an attitude of ongoing harassment vis-à-vis the trade union activity carried out in the enterprise, as demonstrated by the fact that at present only trade union No. 2 is in operation, while a further two trade union organizations have been in recess for a few years. The enterprise approaches collective bargaining in the same way; at present there are no collective instruments which have resulted from regulated negotiations but, on the contrary, the principal practice in the enterprise, and the practice which covers the majority of its workers, is that of collective agreements. It is important to point out that all the actions carefully and diligently carried out by the officials of the Labour Inspectorate, in the various bodies to which applications were made, have been unable to prevent or reduce the open persecution by Agrícola Ariztía Ltda. of the trade union organizations, their officials and their activities, as seen in the case of the collective bargaining initiated by company union No. 2.

C. The Committee’s conclusions

1. 233. The Committee observes that in this case the complainant alleges that the enterprise Agrícola Ariztía Ltda.: (1) obliges its workers to sign, under threat, instruments that it calls “collective labour agreements” which are in fact contracts of adhesion or multiple individual contracts (m.i.c.); (2) prevented company union No. 2 from negotiating a collective contract on behalf of 232 workers, arguing that 221 of them had already signed the abovementioned “collective agreements” (that is to say m.i.c.); and (3) pressurizes the workers who join the enterprise not to become members of the trade union and the workers who are affiliated to leave the trade union, which has led to 300 workers leaving the organization.
2. 234. As regards the allegation that the enterprise obliges its workers to sign, under threat, instruments that it calls “collective labour agreements” (that is to say m.i.c.), the Committee notes the Government’s statement that numerous investigations have been carried out by the administrative authorities and that it has been repeatedly concluded that the agreements cannot be classified as collective agreements resulting from negotiation as provided for in the Labour Code, given that the elements seen clearly reflect the lack of collective consent and of real participation in the supposed negotiations and that these agreements resemble “contracts of adhesion” which the workers are called upon to accept individually when offered a contractual proposal by the enterprise. In this respect, the Committee recalls that the Collective Agreements Recommendation, 1951 (No. 91), provides that:
   • … for the purpose of this Recommendation, the term “collective agreements” means all agreements in writing regarding working conditions and terms of employment concluded between an employer, a group of employers or one or more employers’ organizations, on the one hand, and one or more representative workers’ organizations, or, in the absence of such organizations, the representatives of the workers duly elected and authorized by them in accordance with national laws and regulations, on the other.
   • In this respect, the Committee emphasized that the said Recommendation stresses the role of workers’ organizations as one of the parties in collective bargaining. Direct negotiation between the undertaking and its employees, bypassing representative organizations where these exist, might in certain cases be detrimental to the principle that negotiation between employers and organizations of workers should be encouraged and promoted [see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 786]. In these circumstances, the Committee requests the Government to take measures to ensure that the enterprise respects the principles of collective bargaining and in particular Article 4 of Convention No. 98 concerning the full development and utilization of machinery for voluntary negotiation with workers’ organizations, with a view to the regulation of terms and conditions of employment by means of collective agreements. The Committee requests the Government to take measures to amend legislation to clearly prevent this type of practice of “multiple individual contracts” when there is a representative trade union and to see to it that direct negotiation with workers does not create difficulties for or weaken the position of trade unions.
3. 235. Concerning the alleged refusal by Agrícola Ariztía Ltda. to negotiate with company union No. 2 a draft collective contract that covered 232 workers, arguing that 221 of them were covered by “collective agreements” in force (these were in fact “multiple individual contracts”), the Committee notes the Government’s statement that: (i) the Labour Inspectorate concluded that the collective agreements cited by the enterprise were not actually collective agreements and that consequently the disputed workers could negotiate; (ii) the enterprise lodged an application for protection with the judicial authorities against the ruling of the Labour Inspectorate that was accepted (the Government indicates that the legal judgement reproduces the majority opinion of the courts of justice to the effect that labour inspectorates are not competent to try or to rule on the legal nature of collective instruments and specifically on whether in this particular case multiple individual contracts constituted a collective agreement or not; in other words this question should have been submitted to the competent judicial authority and not to the Inspectorate); and (iii) consequently, given the lack of authority of the Labour Inspectorate to rule on the matter, in practice the trade union could not conclude the negotiation of the collective contract as the number of workers able to participate in the collective negotiation process was drastically reduced. In this respect, the Committee observes that, irrespective of the decision of the Supreme Court of Justice concerning the competent institutional body to decide on the legal nature of the collective instruments, in January 2000 another judicial authority fined the enterprise for unfair practices in collective bargaining, stating that the workers were pressurized in order to obtain their consent to sign collective agreements (m.i.c.) either through the threat of dismissal or transfer to the general service section, with the corresponding reduction in their wage remuneration; or by offering them a sum of money to sign the documents. In these circumstances, the Committee concludes that the enterprise’s argument that 221 of the 232 workers covered by a draft collective agreement were already covered by collective agreements is contrary to the principle of good faith that should reign in negotiations between the parties. The Committee therefore requests the Government to take measures to ensure that Agrícola Ariztía Ltda. and its company union No. 2 participate in negotiations in good faith and do everything possible to reach agreement.
4. 236. As regards the allegation that Agrícola Ariztía Ltda. pressurizes workers joining the enterprise not to become members of the trade union and workers who are affiliated to leave the trade union, resulting in 300 workers having left the organization, the Committee notes the Government’s statement that the enterprise has maintained an attitude of ongoing harassment towards trade union activity, as demonstrated by the fact that union No. 2 is currently the only one in operation, while a further two trade union organizations have been in recess for a few years. According to the Government, all the actions carried out by the administrative authority in the various bodies to which applications were made have been unable either to prevent or reduce the open persecution by the enterprise of the trade union organizations, their officials and their activities, as seen in the case of the collective bargaining initiated by union No. 2. In this respect, while it deeply deplores the anti-union conduct of the enterprise in question established by the authorities which constitutes a clear violation of Conventions Nos. 87 and 98, ratified by Chile, the Committee requests the Government to take all measures necessary to end the violations of these Conventions and the acts of harassment against the enterprise trade unions, their officials and members and to take measures to punish those responsible.