Report in which the committee requests to be kept informed of development - Report No 376, October 2015

1. 897. The complaint is contained in a communication dated 20 March 2014 of the General Confederation of Portuguese Workers–National Inter-Union Body (CGTP–IN).
2. 898. The Government sent its observations in a communication dated 10 March 2015.
3. 899. Portugal 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), and the Labour Relations (Public Service) Convention, 1978 (No. 151).

A. The complainant’s allegations

Legislative provisions requiring cuts to wages and other allowances and benefits in the private sector, in the public corporate sector and in the public service

1. 900. Labour Code. In its communication of 20 March 2014, the complainant alleges that section 7 of Act No. 23/2012, of 25 June 2012, introduced amendments to the Labour Code that violate the principles of collective bargaining and the provisions of Convention No. 98 by: (i) removing provisions in collective agreements that were in force prior to the Act and established amounts exceeding those in the Labour Code for compensation in the event of collective dismissals and for values and criteria used to determine compensation in the event of contract termination; (ii) cancelling the provisions of collective agreements regarding compensatory leave for overtime on working days, additional weekly days off or public holidays; (iii) reducing by three days the extension of annual leave established under collective agreements signed after 1 December 2003; and (iv) introducing a two-year suspension of overtime pay exceeding the amounts established in the Labour Code and the pay or compensatory leave established in collective agreements for normal work on public holidays in enterprises not required to close on those days, furthermore halving those provisions, up to the limit established in the Labour Code, where they have not been amended during the suspension period. The complainant alleges that, by amending the regulatory provisions of freely agreed collective agreements, declaring them null and void, reducing or suspending them, and indirectly forcing through their renegotiation, section 7 of Act No. 23/2012 violates the principle of free and voluntary bargaining set out in Article 4 of Convention No. 98. The CGTP–IN considers that, with these measures, the public authorities are seeking to make collective bargaining subordinate to the interests and objectives of government policy, against the wishes of the collective parties. Referring to the principles of the Committee on Freedom of Association, it argues that the public authorities cannot impose their decisions unilaterally in collective bargaining. The complainant considers that it has not been demonstrated that restrictive collective bargaining measures are necessary, appropriate or proportional to the crisis that Portugal is going through. It also alleges that those measures do not have the temporary nature required of restrictions on collective bargaining. In relation to overtime, the Act definitively annuls agreement provisions on compensatory leave and reduces, without time restrictions, the increases established in agreements. The provisions in the agreements on compensation for collective dismissal that were in force prior to Act No. 23/2012, granting amounts exceeding those provided in the Labour Code, are also annulled. This is also the case for values and criteria established by collective agreement to determine compensation in the event of contract termination. Likewise, without providing any kind of time restriction, the three-day increase in annual leave established in agreements concluded after December 2003, is annulled. The definitive removal of these collective bargaining provisions through legislation indicates that the restrictions do not relate to the exceptional and transitional situation arising from the economic and social crisis, but that these difficulties are being used as a pretext to erode the provisions of agreements that have been consolidated over decades.
2. 901. Public corporate sector. The complainant also alleges that Acts Nos 55-A/2010, 64-B/2011 and 66-N/2012, approving the State Budget for the years 2011, 2012 and 2013, respectively, violate the principle of free and voluntary collective bargaining established in Article 4 of Convention No. 98, in so far as they apply to workers in public enterprises that are exclusively or mainly constituted with public capital, in public corporate bodies and bodies that are part of the regional or municipal corporate sector. The CGTP–IN indicates that the workers in these enterprises are provided for under the Labour Code and that the budgetary provisions resulted in the reduction of their pay and economic benefits, taking precedence over the provisions established under collective agreement. As regards Act No. 55-A/2010, the complainant alleges that: (i) section 19 imposed cuts of 3.5 to 10 per cent on the overall gross income of workers earning more than €1,500 a month; (ii) section 28 prohibited fixing and updating the food subsidy above the level established for public service workers; (iii) section 30 provided for the establishment in law of exceptional and temporary provisions relating to the system of remuneration of enterprise employees and workers, and section 31 confirmed this by applying the provisions for public servants concerning food subsidies, daily subsistence allowances, overtime and night work; and (iv) section 32 applied the provisions for public servants concerning overtime and night work, along with the respective cuts, to workers in public foundations or establishments. As regards Act No. 64-B/2011, the complainant alleges that: (i) section 20 maintained the pay cuts and freezes established in Act No. 55-A/2010; (ii) section 21 suspended the payment of annual leave and Christmas allowances or the amounts corresponding to 13th or 14th salaries; (iii) section 30 suspended the provisions on overtime and night work, along with the corresponding cuts, for workers in public foundations or establishments as per provisions for public servants; (iv) section 32 reduced overtime pay (the complainant adds that section 25 of Act No. 23/2012 amended section 268 of the Labour Code, setting the same overtime pay rates, whereby it cannot be considered an exceptional measure); (v) section 33 suspended, during the Economic Adjustment Programme, the right to compensatory leave established in section 229 of the Labour Code and replaced it with less favourable provisions (the complainant also adds that section 25 of Act No. 23/2012 introduced these provisions in section 229 of the Labour Code, whereby they cannot be considered to be an exceptional measure); and (vi) section 34, in relation to National Health Service establishments, which hold the status of public corporate entities, prohibited setting wages exceeding the wages of public servants. As regards Act No. 66-B/2012: (i) section 27 maintained in 2013 the pay cuts already established in section 19 of Act No. 55-A/2010; (ii) section 28 imposed the payment in 12 instalments of Christmas bonuses or allowances corresponding to 13th month pay; (iii) section 29 suspended the payment of annual leave or equivalent allowances for workers with monthly wages exceeding €1,100 and reduced the allowance for those earning €600–€1,100 a month; (iv) section 35 prohibited all pay rises; (v) section 39 maintained the freeze on the food subsidy allowance; (vi) section 40 continued to apply the provisions on overtime and night work, along with the corresponding cuts, to workers in public foundations and establishments, as per the provisions for public servants; and (vii) section 45 again reduced overtime pay for workers whose normal working hours do not exceed seven hours a day and 35 hours a week.
3. 902. The complainant highlights that these provisions take precedent over the provisions established in collective agreements and alleges that the public authorities have used the financial crisis as a pretext to limit compliance with freely negotiated collective agreements, violating the principle of free collective bargaining. The CGTP–IN adds that the repetitive way in which these restrictions have been introduced points to a clear intention to erode working conditions and demonstrates that the purported exceptional conditions are lacking, aggravating the violation of the principle of free collective bargaining. The complainant alleges that the pay cuts resulting from these restrictions on collective bargaining coincide with the generalized impoverishment of the Portuguese population and rising precariousness, unemployment and worker vulnerability. It adds that the lack of respect for collective bargaining reduces the scope of trade union action and violates freedom of association, undermining the obligations established under Article 3 of Convention No. 87, by weakening the power and importance of trade unions and by preventing trade unions from organizing their programmes of action freely in order to defend the interests of workers.
4. 903. Public service. The complainant alleges that, on the pretext of the financial crisis, the aforementioned Acts Nos 55-A/2010, 64-B/2011 and 66-N/2012, approving the State Budget, run counter to the principle of collective bargaining established under Article 7 of Convention No. 151, by repeatedly using the law to prevent or limit its exercise. The statutory measures amended the provisions established by collective agreement, even though section 353 of the Framework for Collective Bargaining in the Public Service confers precedence, among others, to issues relating to wage supplements. As regards Act No. 55 A/2010 (State Budget for 2011), the complainant alleges that: (i) section 19 introduced cuts to the overall gross wages of public servants exceeding €1,500 a month, and sections 20 and 21 introduced pay cuts for court judges and judges attached to the Public Prosecution Department (and a 20 per cent cut to the benefits established in its statutes); (ii) section 24 prohibited all pay rises, including when related to promotions and career progression, and the allocation of performance incentives; and (iii) section 28 prohibited updates to the food subsidy, which has not been updated since 2008. As regards Act No. 64-B/2011 (State Budget for 2012), the complainant alleges that: (i) section 20 maintained the pay cuts and freezes established under Act No. 55-A/2010; (ii) section 21 suspended the payment of annual leave and Christmas allowances and the amounts corresponding to 13th and 14th month allowances; (iii) section 32 reduced overtime pay; and (iv) section 33 suspended the right to compensatory leave during the Economic Adjustment Programme and replaced it with less favourable provisions. As regards Act No. 66-N/2012 (State Budget for 2013), the complainant alleges that: (i) section 27 maintained the pay cuts under Acts Nos 55-A/2010 and 64-B/2011; (ii) section 28 imposed the payment in 12 instalments of Christmas bonuses or allowances corresponding to the 13th salary; (iii) section 29 suspended the payment of annual leave or equivalent allowances to workers with monthly wages exceeding €1,100 and reduced the allowance for those earning between €600 and €1,100 a month; (iv) section 35 prohibited all pay rises; (v) section 39 maintained the freeze on the food subsidy allowance; and (vi) section 45 again reduced overtime pay in the case of workers whose normal working hours do not exceed seven hours a day and 35 hours a week.

Expiry of collective agreements

1. 904. The complainant alleges that the provisions for the expiry of collective agreements introduced under section 501 of the Labour Code violate the principles enshrined in Convention No. 98. The section provides that the clause in the agreement, which makes the period of its validity dependent on its replacement by another collective agreement, will cease to be effective five years after the contestation of the agreement, the presentation of a proposal for the revision of the agreement containing said clause, or the presentation of a proposal for the revision of the agreement containing the revision of said clause. Where this clause does not exist or has ceased to be effective, when the agreement is contested, it shall remain in force during the subsequent negotiation period or for a minimum period of 18 months (subsequently the agreement will expire 60 days after the notification by one of the parties of the end of negotiations without an agreement). The complainant alleges that, contrary to its duty to adopt measures that are appropriate to the national circumstances to stimulate and promote the full development and use of the voluntary collective bargaining procedures set out in Article 4 of Convention No. 98, the adoption of section 501 of the Labour Code unlawfully interfered in the collective bargaining system, removing clauses which had been freely negotiated in accordance with existing regulatory frameworks. The CGTP–IN considers that the artificial termination, through legislation, of the validity period of clauses or agreements without the support of the parties, violates Article 4 of Convention No. 98.

Choice of the applicable collective agreement by non-member workers

1. 905. The complainant alleges that section 497 of the Labour Code, approved by Act No. 7/2009, introduces an anti-union provision by allowing workers who are not union members to choose an applicable collective agreement, in violation of the principle of membership established in section 496 of the Labour Code. The CGTP–IN considers that this provision: (i) enables workers who are not union members to benefit from the outcome of collective bargaining while denying this possibility to workers who are members of trade unions that have not signed an agreement; (ii) it allows workers who are not union members to choose the agreement that most benefits them, while union members are automatically bound by the agreement signed by their organization; and (iii) it allows the employer to influence workers’ choices and even encourage them to leave their trade unions. Such interference is prohibited under Article 1 of Convention No. 98. The complainant also highlights that under the principle of union membership, the collective agreement does not apply to workers who are members of trade unions that have signed the agreement but work for enterprises that have not signed the agreement or are not members of an employers’ association that has signed the agreement. It considers that section 497 of the Labour Code, by treating similar situations differently – in other words, situations in which the principle of union membership is not applied – leads to anti-union discrimination. Accordingly, the complainant considers that this is an anti-union provision that dissuades workers from joining or encourages them to leave trade unions, in violation of Article 8(1) of Convention No. 87.

B. The Government’s reply

Legal provisions resulting in cuts in wages and other allowances and benefits in the private sector, in the public corporate sector and in the public service

1. 906. Labour Code. In its communication of 10 March 2015, the Government denies that the legislative measures in question are at odds with the principles of freedom of association and collective bargaining. The Government considers that the amendments to the Labour Code, introduced under section 7 of Act No. 23/2012, do not in any way violate Article 4 of Convention No. 98 or the views of the experts in relation to that Article. It explains that Act No. 23/2012 is part of the set of new policies that are needed to generate employment, foster economic growth, quickly overcome the crisis in the country and sustain the national public debt. The Government indicates that the measures introduced under this section not only complied with the Memorandum of Understanding on economic policy conditionality (MoU), of 17 May 2011, between Portugal, the International Monetary Fund (IMF), the European Commission and the European Central Bank, but were also the outcome of an important process of social dialogue that resulted in the Commitment to Growth, Competitiveness and Employment, signed on 18 January 2012, between the Government and most of the social partners on the Standing Committee on Social Dialogue. Moreover, the Government indicates that section 7 of Act No. 23/2012 was the subject of a constitutional review, which led to Decision No. 602/2013 of the Constitutional Court, with the corrections contained in Decision No. 635/2013, in which paragraphs 2, 3 and 5 of section 7 of Act No. 23/2012 were declared unconstitutional, while paragraphs 1 and 4 were declared constitutional. The Government indicates that the right to collective bargaining is a fundamental right of workers enshrined in the Constitution as provided for by the law. According to the information provided by the Government in relation to Decision No. 602/2013, the constitutional review consisted in examining whether the law guaranteed the collective agreement clause (essential content) established by the Constitution and in assessing the level of interference in the scope of protection of the fundamental right to collective bargaining, analysing the compliance of the rights-restricting laws with the Constitution. The Government provides specific comments on each of the paragraphs from section 7.
2. 907. With regard to section 7(1) (removing provisions in collective agreements that were in force prior to Act No. 23/2012 which provided for amounts exceeding those established in the Labour Code for compensation in the event of collective dismissals and for values and criteria used to determine compensation in the event of contract termination), the Government indicates that the Commitment to Growth, Competitiveness and Employment established the terms for reviewing the legal framework governing compensation in the event of employment contract termination in order to bring due compensation into line with the European Union average, stipulating that the legal framework governing compensation would take precedence over collective agreements and employment contracts. Moreover, by not declaring section 7(1) unconstitutional, Decision No. 602/2013 established that “as regards, in particular, the amounts of compensation to award, the framework does not preclude in any way collective bargaining, but rather, limits it according to constitutionally relevant interests”, that section 7(1) sought to “limit the scope of the relevant right, not to interfere with the so-called collective agreement clause” and, therefore, did not infringe upon the right to collective bargaining. In conclusion, the Government considers that section 7(1) did not violate Article 4 of Convention No. 98 or the principles of collective bargaining, as the workers’ and employers’ organizations had been duly consulted and the settlement reached had been the result of agreements between the Government and most of the social partners on the Standing Committee on Social Dialogue, namely, the aforementioned Commitment to Growth, Competitiveness and Employment and the Tripartite Agreement on Competitiveness and Employment.
3. 908. With respect to section 7(4) (suspending for two years overtime (additional hours) pay exceeding the amounts established in the Labour Code and the compensation or compensatory rest established in collective agreements for normal work on public holidays in enterprises not required to close on such days), the Government indicates that the Commitment to Growth, Competitiveness and Employment states that its signatories agree “to halve the current amounts owed for overtime laid down in employment collective regulatory instruments or employment contracts” and that “for two years, as from the entry into force of the law that provides for these reductions; the legal limits, with the reduction included, take absolute precedence over any type of employment collective regulatory instrument or employment contract”. The Government also indicates that Decision No. 602/2013 established that section 7(4) was not unconstitutional, by finding that “this suspension, in the light of its purpose and temporary nature, also appeared to be appropriate, necessary and balanced, as it safeguarded constitutionally relevant interests such as the fulfilment of the goals and commitments made internationally in the framework of the MoU and the very competitiveness of the national economy during a particularly difficult period for national enterprises”. The Government therefore considers that section 7(4), the outcome of a broad consensus from a social dialogue reached by most of the social partners, obeys both the letter and spirit of Article 4 of Convention No. 98.
4. 909. With regard to section 7(2) (cancelling the provisions of collective agreements concluded before the entry into force of the law, which relate to compensatory rest for overtime on business days, additional weekly days off or public holidays), section 7(3) (reducing by three days the increases in annual leave established under collective agreements concluded after 1 December 2003) and section 7(5) (halving, up to the limit established in the Code, the values for overtime pay and compensation or compensatory rest, where the provisions have not been amended during the two-year period of suspension), the Government indicates that while these provisions found support in the Commitment to Growth, Competitiveness and Employment, Decision No. 602/2013, with the corrections contained in Decision No. 635/2013, declared them unconstitutional, and they were expressly repealed under Act No. 48-A/2014.
5. 910. Public corporate sector. With regard to the allegations that Acts Nos 55-A/2010, 64-B/2011 and 66-N/2012, approving the State Budget for the years 2011, 2012 and 2013, respectively, violate the principle of free and voluntary collective bargaining and threaten freedom of association, the Government refers to the reports on Convention No. 98 presented to the ILO, particularly to the fact that the pay cuts to wages exceeding €1,500 a month affect the public sector in general and that the Government considered it of the utmost importance to align the public corporate sector with the public administration when cutting costs, maximizing operational efficiency and optimization, and reducing cost structures. The Government also indicates that the Constitutional Court decided not to declare sections 19–21 of Act No. 55 A/2010 (State Budget for 2011) unconstitutional. The Government states that Decision No. 396/2011 recognized that it “was acceptable for this to be a legitimate and necessary way, in the current context, of cutting public expenses, with a view to rebalancing the budget” and that “those who are paid with public funds are not in the same position as other citizens, and thus the additional sacrifice required of such persons … does not constitute unjustifiably unequal treatment”. As regards Act  No. 64-B/2011 (State Budget for 2012), the Government indicates that the Constitutional Court ruled in Decision No. 353/2012 that sections 21 and 25 (suspending the payment of annual leave and Christmas allowances of, inter alia, workers in the public corporate sector) were unconstitutional, but that the effects of their unconstitutionality were not applicable to the suspension of payment of allowances for the year 2012, so as to avoid jeopardizing the solvency of the State. With regard to Act No. 66-N/2012 (State Budget for 2013), the Government indicates that Decision No. 187/2013 of the Constitutional Court declared section 29 (suspending, above a certain amount, under the Economic Adjustment Programme, the payment of annual leave and 14th salary allowances) unconstitutional since it violated the principle of equality. The Government indicates, however, that the Constitutional Court did not find sections 27 (maintaining pay cuts) or 45 (on compensation for overtime) unconstitutional and that, with regard to a possible violation of the right to collective bargaining, in relation to other legal provisions, it ruled that, given the public interest pursued “it does not appear from the obligation imposed on the ordinary legislator always to leave a set of minimally significant areas open to collective bargaining, that an argument can be made for the mandatory constitutional annulment of the budgetary laws which, based on this public interest, establish an exceptional and temporary decrease in the annual remuneration of workers in the public sector”. The Government considers that, given the temporary and exceptional nature of the measures taken, which do not affect the remuneration of workers who earn below a certain amount, such measures cannot be considered to violate Article 4 of Convention No. 98.
6. 911. Public service. With regard to the complainant’s allegations that Acts Nos 55-A/2010, 64-B/2011 and 66-N/2012, approving the State Budget, run counter to the principle of collective bargaining established under Article 7 of Convention No. 151, the Government recalls that these laws were reviewed by the Constitutional Court. The Government states that Decision No. 396/2011 found that “the pay cuts seek to protect the public interest, which should prevail” and that they were “essentially circumstantial financial policy measures to combat an emergency situation, adopted by the legislative body that was duly elected according to the democratic principle of popular representation”. The Government considers that the temporary and exceptional measures established in the budgetary laws relating to working conditions in the public service addressed a set of circumstances without violating the principle established in Article 7 of Convention No. 151.

Expiry of collective agreements

1. 912. In relation to the allegations that the provisions on the expiry of collective agreements introduced by section 501 of the Labour Code violate the principles enshrined in Article 4 of Convention No. 98, the Government states that in Portugal collective autonomy is the governing principle, without prejudice to the obligation to negotiate or the principle of good faith. It indicates that the revision of the Labour Code under Act No. 7/2009 was preceded by proposals included in the White Paper on Labour Relations, which argued that there was a need for expiry provisions, as the possible imposition of an agreement extension on one of the parties against their will would undermine the autonomy of the parties. Reiterating information provided in its report to the ILO on Convention No. 98 for the period 2009–12, the Government indicates that the Constitutional Court, in its Decision No. 338/2010, found that the expiry provisions were not unconstitutional and did not violate the right to collective bargaining. The Court found that the legislative body could legitimately impose limits or restrictions on the duration of collective agreements, provided it could be justified without undermining the basic core of the right, and that it was necessary to consider the arguments for the expiry provisions and against the alternative system, which was unilateral perpetuity. The Government therefore considers that, once a certain period has elapsed, regardless of the existence of a clause which makes the termination of the agreement conditional on replacement by another collective regulatory instrument, the expiry of the collective agreement should respect the negotiating autonomy of the parties and comply with the provisions of Article 4 of Convention No. 98. Moreover, the Government states that these expiry provisions were adopted by tripartite agreement on the basis of social dialogue (the Tripartite Agreement on a New System of Labour Regulations, Social Protection and Employment) concluded on 25 June 2008 between the Government and most of the social partners.

Choice of the applicable collective agreement by non-member workers

1. 913. With regard to the complainant’s allegations that section 497 of the Labour Code is an anti-union provision in that it allows workers who are not union members to choose the applicable collective agreement, the Government indicates that this individual membership option was put forward by the White Paper on Labour Relations Committee. Furthermore, the Government states that the Tripartite Agreement on a New System to Regulate Labour Relations, Employment and Social Protection Policies, concluded on 25 June 2008 between the Government and most of the social partners, in relation to the revision of the Labour Code, made explicit provision for individual membership of existing collective agreements for non-member workers, as well as for regulating, through collective bargaining, the payment of contributions for signatory trade unions in the event of individual membership of collective agreements. The Government also refers to the report it presented to the ILO on Convention No. 98 for the period 2009–12, in which it indicated that the provision was declared constitutional in Decision No. 338/2010 of the Constitutional Court. This decision, in response to allegations that section 497 promoted non-membership and weakened trade unions, found that the provision did not violate trade union rights or the right to collective bargaining. The Government highlights that in the decision, the Court reiterated the fact that collective agreements are often applicable through extension regulations to non-member workers and that collective agreements may require workers who have signed them to pay a fee to the trade unions, which can make membership more beneficial. As to the allegations of discriminatory effects, the Government states that the principle of collective autonomy applies, which includes the right to sign agreements, and that the trade unions know how duly to represent the interests of their members. With regard to the allegations that employers may influence workers’ choice of agreement or their resignation from trade unions, the Government considers that any effort to influence workers by an employer would constitute a violation of the provisions of the Constitution and the Labour Code and would be punishable. The Government therefore does not consider that section 497 introduces an anti-union provision that violates Article 8 of Convention No. 87.

C. The Committee’s conclusions

1. 914. The Committee observes that in this case the complainant alleges the introduction of a series of legislative provisions, in the context of serious economic crisis, which impinge upon the exercise of the right to collective bargaining in the private and public sectors, furthermore preventing the application of clauses of collective agreements currently in force. According to the complainant, it has not been demonstrated that the restrictive measures on collective bargaining are necessary, appropriate or proportional to the crisis.
2. 915. The Committee takes note of the declarations made by the Government regarding the need to react urgently and adopt relevant measures to deal with a very serious economic crisis, and of its declarations in which it considers that the measures adopted do not violate the provisions of Conventions Nos 87, 98 and 151. The Committee also takes note of the declarations of the Government according to which these measures were taken to generate employment, foster economic growth and sustain national public debt, in compliance with the MoU signed by Portugal, the IMF, the European Commission and the European Central Bank.
3. 916. The Committee understands that several of the measures to deal with the crisis raised in this complaint have been submitted to tripartite consultation and discussion in the Standing Committee on Social Dialogue of the Economic and Social Council. The Committee observes that, as indicated by the documentation on social dialogue referred to by the Government, while one of the two trade union confederations represented on this Committee supported many of these measures by signing up to the Commitment to Growth, Competitiveness and Employment and the Tripartite Agreement on a New System of Labour Regulations, Social Protection and Employment, the complainant, which is the other trade union confederation on the Standing Committee, did not support these tripartite agreements and raises several objections to them in its complaint. However, the Committee observes that the Government does not refer to consultations with the trade union confederations regarding the legal provisions that significantly reduce wages and other benefits in the public corporate sector and in the public service. The Committee wishes to highlight the importance of social dialogue in the process of adopting legislation, which may have an effect on workers’ rights, including those intended to alleviate a serious crisis situation. The Committee encourages the Government to continue promoting social dialogue in relation to the measures taken to deal with the crisis and other issues relating to workers’ rights outlined in the complaint, with a view to finding, to the fullest possible extent, solutions agreed by the most representative organizations. The Committee requests the Government to keep it informed in this regard.
4. 917. As it has done in recent cases of restrictions on collective bargaining as a consequence of economic crises, the Committee should recall that: “While it is not its role to express a view on the soundness of the economic arguments invoked to justify government intervention to restrict collective bargaining, the Committee must recall that measures that might be taken to confront exceptional circumstances ought to be temporary in nature having regard to the severe negative consequences on workers’ terms and conditions of employment and their particular impact on vulnerable workers.” [See 365th Report, Case No. 2820, para. 995 and 317th Report, Case No. 2947, para. 464.]
5. 918. The Committee observes that some of the legal provisions to which the complainant has taken objection have been declared unconstitutional and expressly repealed by the Government, in particular: paragraph 2 (cancelling compensatory or supplementary leave), paragraph 3 (reducing annual leave), and paragraph 5 (halving, up to the legal limit, overtime pay and compensatory allowance or leave) of section 7 of Act No. 23/2012; sections 21 and 25 of Act No. 64-B/2011 (suspending the payment of annual leave and Christmas allowances; and section 29 of Act No. 66-N/2012 (temporary suspension of annual leave and 14th salary).
6. 919. The legal provisions that have not been declared unconstitutional by the Constitutional Court are examined in the three sections below.

Legal provisions that have not been declared unconstitutional involving cuts to wages and other allowances and benefits

1. 920. Labour Code. The complainant alleges that Act No. 23/2012 introduced amendments to the Labour Code that violate the principles of collective bargaining. The Committee notes that the Government denies the allegations and highlights that these provisions were discussed in consultation with the trade unions and are based on a national tripartite agreement which was signed by one of the two trade union confederations represented on the Standing Committee on Social Dialogue, where the complainant is the other represented confederation, and that they were declared constitutional by the Constitutional Court. The Committee notes that the Government declares more specifically that: (i) the review of the provisions for compensation in the event of the termination of an employment contract introduced under section 7, paragraph 1 (removing provisions in collective agreements, in force prior to the Act, which provided amounts exceeding those established in the Labour Code for compensation in the event of collective dismissal, and the values and criteria used to determine compensation in the event of the termination of the contract, which are less favourable to the workers, according to the complainant) was agreed with the majority of the social partners participating in the Standing Committee on Social Dialogue, with the objective of aligning due compensation with the European Union average; and (ii) that the suspension established in section 7, paragraph 4 (two-year suspension of overtime pay exceeding the provisions in the Labour Code and the compensatory payment or leave provided in collective agreements for normal work on public holidays in enterprises not required to close on those days) resulted from broad consensus based on social dialogue, having been agreed on by the majority of the social partners and being limited to a period of two years. The Committee observes that these legislative provisions annul provisions of collective agreements on compensation for collective dismissal and termination of contracts, and they suspend for a period of two years certain provisions regarding overtime pay and compensatory payments or leave for work.
2. 921. Public corporate sector. The Committee notes that the complainant alleges the use of legislation to impose cuts in wages and other allowances and benefits (for example cuts of 3.5 to 10 per cent in the overall gross remuneration of workers earning more than €1,500 a month under the acts approving the budgets for 2011, 2012 and 2013) of workers in publicly-owned enterprises where the capital is exclusively or mainly public, public corporate entities and entities which are part of the regional or municipal corporate sector. The complainant alleges that these provisions limit the negotiating capacity of the parties and annul clauses of collective agreements currently in force. The complainant also alleges that these legislative provisions apply to the public corporate sector, which is governed by the Labour Code, some of provisions of the public service framework, which are less favourable than those set out under collective agreement. The Committee notes that the Government considered that it was of utmost importance to align the public corporate sector with the public service in terms of cutting expenses, maximizing operational efficiency, and reducing cost structures, and that the Constitutional Court recognized that those who were paid with public funds were not in the same position as other citizens. In this regard, the Committee highlights the importance of making these changes to working conditions the subject of in-depth consultation with the most representative organizations in the sector. The Committee also notes that the Government highlights the temporary and exceptional nature of the measures taken and that some of them do not affect workers with lower wages (cuts to overall gross wages do not affect workers earning less than €1,500 a month), whereby they cannot be considered to be in violation of Article 4 of Convention No. 98.
3. 922. Public service. As regards public servants, the complainant alleges that the Acts approving the State Budget for 2011 to 2013, violate the principle of collective bargaining established under Article 7 of Convention No. 151 by amending the agreements regarding wages and other allowances and benefits provided under collective agreement (the budget Acts provide for cuts of 3.5 to 10 per cent to the overall gross income of workers earning more than €1,500 a month). In response to these allegations, the Government considers that the temporary and exceptional measures established in the budget acts in relation to working conditions in the public service sought to address a particular set of circumstances and therefore did not violate the principle established in Article 7 of Convention No. 151.
4. 923. In general, and while it recognizes that governments are entitled to adopt emergency measures to address situations of serious economic crisis, the Committee highlights that the measures taken included the suspension, removal or amendment of provisions in force under collective agreements. The results of these measures include cuts to wages and other allowances and benefits. In this regard, the Committee wishes to recall, as it has done in recent cases relating to measures taken in the context of economic crisis [see 365th Report, Case No. 2820, para. 990, and 317th Report, Case No. 2947, para. 463], the following principles: that “state bodies should refrain from intervening to alter the content of freely concluded collective agreements”, that “[collective] agreements should be binding on the parties” and, in relation to the measures affecting workers’ wages, that “if, as part of its stabilization policy, a government considers that wage rates cannot be settled freely through collective bargaining, such a restriction should be imposed as an exceptional measure and only to the extent that is necessary, without exceeding a reasonable period, and it should be accompanied by adequate safeguards to protect workers’ living standards” [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, paras 1001, 939 and 1024]. Finally, the Committee recalls that, if a government wishes the clauses of a collective agreement to be brought into line with the economic policy of the country, it should attempt to persuade the parties to take account voluntarily of such considerations, without imposing on them the renegotiation of the collective agreements in force [see 365th Report, Case No. 2820, para. 995].
5. 924. In these circumstances, and considering that the measures reported in this complaint are challenged by a part of the trade union movement and involve cuts to wages and other allowances and benefits, in the light of the aforementioned principles, the Committee invites the Government to carry out a joint evaluation with the most representative employers’ and workers’ organizations to determine the impact that the legislative provisions adopted, regarding wages and other allowances and benefits, have on the exercise of trade union rights and in particular the right to collective bargaining, with a view to ensuring that exceptional measures adopted in the context of a crisis are not perpetuated. The Committee requests the Government to keep it informed in this regard.

Expiry of collective agreements

1. 925. The complainant alleges that the provisions for the expiry of collective agreements introduced by section 501 of the Labour Code interfere unlawfully with the legal framework on collective bargaining in that they affect the validity of collective agreements, providing that, after a certain amount of time, the clauses that make the period of validity of an agreement dependent on its replacement by another collective agreement cease to be effective. The Committee observes that under section 501: (i) these agreement clauses cease to be effective five years after the last full publication of the agreement, the contestation of the agreement or the presentation of a proposal for the revision of the agreement, including a revision of the clause in question; and (ii) where no such clause exists or if it has ceased to be effective, when the agreement is contested it shall remain in force during the subsequent negotiation period, or for a minimum period of 18 months (subsequently the agreement will expire 60 days after the notification by one the parties of the end of negotiations without an agreement). The Committee notes that the Government reports that the new provisions were adopted by tripartite agreement achieved through social dialogue with the support of the majority of the social partners, and that the purpose of that section is to ensure respect for the negotiating autonomy of the parties and avoid unilateral systems which would enable one of the parties to impose an agreement indefinitely. The Committee also takes due note of the decision by the Constitutional Court which did not consider the legislative provisions unconstitutional.

Choice of the applicable collective agreement by non-member workers

1. 926. The Committee notes that the complainant considers that section 497 of the Labour Code, in that it allows workers who are not union members to choose applicable collective agreements, is an anti-union provision which dissuades people from becoming union members, encourages them to leave trade unions, introduces discrimination between workers and allows the employer to influence the workers’ choice of applicable agreement and to encourage them to leave trade unions. The Committee notes that in its reply the Government indicates that: (i) this option of individual accession, suggested by the White Paper on Labour Relations Committee and approved by a tripartite agreement with the majority of the social partners, was declared constitutional by the Constitutional Court, which ruled that the section did not violate trade union rights or collective bargaining; (ii) the Constitution and the Labour Code safeguard against any attempt at anti-union discrimination; (iii) this is not a case of discrimination among workers but of the application of the principle of autonomy; and (iv) there is nothing stopping collective agreements from providing for payments to non-member workers who sign up to a particular collective agreement.