Ratified treaties;¹ Non-ratified treaties;² Work of international supervisory bodies;³ Instruments not subject to ratification⁴

Collective bargaining/ Freedom to determine level of bargaining/ Impossibility of a law imposing the level of bargaining/ Principle of good faith in collective bargaining/ Direct resolution of a dispute on the basis of international law

In a process of collective bargaining, the union filed a petition to demand the continuation of the procedure of direct negotiations, since the employers’ associations refused to negotiate the list of demands at the level of branch and did not attend meetings, alleging that the claimant union did not have the right to collective bargaining on the level of branch but on the enterprise level. The enterprises grounded their refusal in article 45 of the Law on Collective Labour Relations, which establishes that “[If] no previous collective bargaining agreement exists on any of the levels set out in the previous article, then the parties shall decide by mutual agreement the level on which the first negotiations will take place. If no agreement is reached, the collective bargaining shall be taken to the enterprise level”.

In order to resolve the case, the Court referred directly to the definition and principles of collective bargaining set out in the ILO international labour standards; specifically, Conventions Nos. 98, 151 and 154 and Recommendations Nos. 91 and 163. The Court stated:

“Taking into account that Conventions Nos. 98, 151 and 154 develop and complement the right to collective bargaining, ensuring its real and effective exercise, this Court considers that the aforementioned conventions form part of the ‘block of constitutionality’ with article 28 of the Constitution,⁵ meaning that they can be understood to be standards to be applied when assessing the alleged unconstitutionality of a law subjected to concrete or abstract control”.⁶

The Court drew three fundamental principles of collective bargaining from its reading of these standards: firstly, that collective bargaining should be free and voluntary, as established by Article 4 of ILO Convention No. 98 and as stated by the ILO Committee on Freedom of Association, also cited in the ruling. Secondly, the Court drew the conclusion that the establishment of the level of collective bargaining should depend in essence on the will of the parties involved, and therefore should not be governed by legislation, since this would violate Convention No. 98 and article 28 of the Peruvian Constitution and would go against the provisions of ILO Recommendation No. 163, which states: “ In countries where collective bargaining takes place at several levels, the parties to negotiations should seek to ensure that there is co-ordination among these levels”. The third principle highlighted by the Court is that of bargaining in good faith. In this respect, the Court recognizes the difficulty of being unable to impose good faith, which “can only be achieved by means of voluntary, reciprocal, serious and continuous efforts on the part of employers and workers”.

Given the above, the Court considered that the refusal of the employers to negotiate on a particular level would not, in principle, constitute an infringement of the right to collective bargaining, since such negotiations must be free and voluntary. However, the Court added that in exceptional circumstances the level of collective bargaining may in some cases be decided by an external channel by a body independent of all parties. Thus, the decision on the level of collective bargaining may be reached through arbitration if it can be demonstrated that one of the parties is not complying with their duty to negotiate in good faith, is carrying out unfair practices or if the refusal to negotiate has the sole purpose of preventing the union from carrying out its union activity, since these circumstances would represent an infringement of the right to collective bargaining. In order to reach this conclusion, the Court referred to ILO Recommendation No. 163:

“Thus, subparagraph 1 of paragraph 4 of Recommendation No. 163 states that ‘measures adapted to national conditions should be taken, if necessary, so that collective bargaining is possible at any level whatsoever, including that of the establishment, the undertaking, the branch of activity, the industry, or the regional or national levels.’”

In light of the above, with regard to the article cited by the associations supporting their refusal to negotiate on the level of branch of activity, the Court declared that the part of the article which states that “[i]f no agreement is reached, the collective bargaining shall be taken to the enterprise level” is unconstitutional since it contravenes the freedom to decide the level of negotiation and violates the right to collective bargaining. Thus, it is not applicable to the parties. Therefore, the Court ordered the aforementioned employers’ associations to continue the bargaining process, to attend meetings, and proceed to decide the level of negotiation in conjunction with the union organization. If the parties failed to reach an agreement in that respect, they should submit to an arbitration process.

¹ ILO Convention on the Right to Organise and Collective Bargaining, 1949 (No. 98); ILO Convention on Labour Relations (Public Service), 1979 (No. 151).

² ILO Convention on Collective Bargaining, 1981 (No. 154).

³ ILO Committee on Freedom of Association.

⁴ ILO Collective Agreements Recommendation 1951 (No. 91); Collective Bargaining Recommendation, 1981 (No. 163).

⁵ Article 28 of the Constitution: “The State recognizes the right of workers to join trade unions, to engage in collective bargaining and to strike.  It ensures their democratic exercise:

1. It guarantees freedom for forming trade unions.

2. It encourages collective bargaining and promotes peaceful settlement to labor disputes. Collective agreements are binding in the matters concerning their terms.

3. It regulates the right to strike so that it is exercised in harmony with social interest. It defines exceptions and limitations.”

⁶ Section 3.2 of the ruling.