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Report of the Committee on the Application of Standards

Discussion in Plenary
General report


Convention No. 95: Protection of Wages, 1949

Russian Federation (ratification: 1961). The Government has supplied the following information:

The Ministry of Labour and Social Development of the Russian Federation wishes to inform the ILO of measures undertaken by the Government of the Russian Federation to settle wage arrears in organizations financed out of the budget in connection with the representation submitted to the ILO by the Central Committee of the Union of Educational and Academic Employees concerning violations in the Russian Federation of the provisions of the Protection of Wages Convention, 1949 (No. 95).

Following a meeting between representatives of the interested federal bodies of executive power, leaders of the Federation of Independent Trade Unions of Russia (FNPR) and the Central Committee of the Union of Educational and Academic Employees, the Ministry of Labour and the Ministry of Finance summarized the proposals of all interested parties aimed at settling the wage arrears in the sector financed out of the budget.

Taking into account these proposals, the Ministry of Labour and the Ministry of Finance have drawn up two draft Presidential Decrees: “On supplementary measures to ensure payment of wages to employees in the sector financed out of the budget and sanitation of state and municipal finances”, and “On measures to ensure trade union control over timely payment of wages”, and submitted them to the Government of the Russian Federation.

During the preparation of these draft Decrees, particular attention was paid to the fact that the process of payment of wage arrears is impeded by uncontrolled distribution of funds at the local level and by behind-the-scenes decision-making by regional and local authorities with a view to resolving this problem. In order to improve the control over the payment of wage arrears and ensure prompt payment of wages in the future, and also to ensure greater public accountability and transparency of this process, it is proposed to draw on the potential of the trade unions.

The draft Presidential Decree “On supplementary measures to ensure payment of wages to employees in the sector financed out of the budget and sanitation of state and municipal finances” contains provisions:

– to ensure within one month the conclusion of an agreement on conditions for the allocation of financial aid from the federal fund of financial support of the constituent territories of the Russian Federation;

– to allocate on a monthly basis the resources from the federal fund of financial support of the constituent territories of the Russian Federation to the territories that have signed and comply with an agreement, in the amount and on the conditions being determined by the federal law “On the federal budget for 1998”;

– to grant extensions to constituent territories of the Russian Federation that have signed and are complying with an agreement on the repayment of budget loans received in 1997 for the purpose of settling wage arrears in the sector financed out of the budget;

– to consider applications from bodies of state power of the constituent territories of the Federation for temporary financial assistance from the federal budget in case of availability of materials that describe the forecast of performance of the budget for the corresponding period and the progress made in implementing programmes for financial sanitation in accordance with the form established by the Government of the Russian Federation;

– to approve the procedure for the delivery of funds allocated from the federal fund of financial support of the constituent territories of the Russian Federation through the system of the State Treasury, excluding the possibility of using these funds for other purposes when there are wage arrears to the employees of the sector financed out of the budget.

The draft Presidential Decree “On measures to ensure trade union control over timely payment of wages” provides for the creation of trade union groups in enterprises, institutions and organizations in the constituent territories of Federation and municipalities for the purpose of control over timely payment of wages and provision to these groups of the necessary information.

For the coordination of the activities of the trade union control groups and for prompt gathering of information on the obstacles to the payment of wages, it is proposed that a Presidential Commission on matters relating to the timely payment of wages be set up. The draft Decree was preliminarily examined and coordinated with the FNPR.

In addition, the Vice-Chairman of the Government of the Russian Federation has approved a plan for ensuring the resolution of the problems related to ensuring the prompt payment of wages to the employees of organizations financed out of the budget. Specifically, the plan provides for:

– the elaboration of a draft Presidential Decree on improving the control over compliance with the labour legislation of the Russian Federation;

– conduct of a conference within the Government of the Russian Federation on measures undertaken by the bodies of executive power of the constituent territories of the Russian Federation to pay off wage arrears to the employees of the sector financed out of the budget.

In the opinion of the Ministry of Labour, these measures will contribute to the resolution of the problem of settlement of wage arrears to employees of the whole sector financed out of the budget.

In addition, a Government representative, First Deputy Minister of Labour and Social Development, stated that Russia was reporting on the application of Convention No. 95 for the first time since it had become a member of the ILO. This Convention had been ratified by his country in 1961. First of all, he pointed out that the new Russia had quite a normal attitude to the comments of the ILO supervisory bodies addressed to it, as compared to the times of the USSR, when even a direct request of the Committee of Experts used to raise a very negative attitude and any comments of the supervisory bodies were considered as a direct attack against the foundations of the State. Nowadays, his Government stood for cooperation with the ILO supervisory bodies and thought that it would be constructive. It was ready for a dialogue and intended to continue it with all supervisory bodies of the ILO.

The procedure under article 24 of the Constitution concerning the representation addressed against Russia under the Convention was closed by the Governing Body Tripartite Committee only in November 1997 at the Governing Body's 270th Session. His Government had also received the Committee of Experts' comments. The Government, in turn, had communicated a series of replies and information on this subject. The speaker hoped that the Committee of Experts had paid attention to the scope of this information and, above all, to its objectivity.

Unfortunately, the situation was very complicated. The country was undergoing a period of transformation from the centrally-planned economy to a market economy. It was a difficult period of transition from the society in which there had been a monopoly of power, monopoly of ideology and monopoly in the economy. The process of restructuring the society was going on in all directions. It was quite evident that in such a complicated process some drawbacks and mistakes were inevitable. In the past, the country had lived almost in isolation and was, to a great extent, oriented to the expansion of its ideology. Now it was returning to a common civilized way of development and was much more open to the world which was becoming more and more interdependent.

The Russian trade unions' concern about wage arrears was shared completely by the Government which had undertaken extraordinary efforts in order to remedy the situation. This could be confirmed by the fact that one of the first meetings organized by the new head of the Russian Government was that with Mr. Shmakov and other trade union leaders of the country.

At present, the total wage arrears stood at 62.8 billion roubles, including arrears due to the lack of direct financing out of the federal and regional budgets “ 9.5 billion roubles and the debts of the federal Government were not higher than 30 per cent.

The speaker recalled the basic reasons for a crisis in the sphere of wages. First of all, there was an unstable financial situation in the country which was due to the following: (a) poor collection of taxes; (b) increase in mutual non-payments; and (c) weak investment activities.

A critical situation with non-payments in relation to mutual obligations (53.3 billion roubles) was a result of the difficult financial situation of many enterprises and organizations. At the end of 1997, the number of non-profitable enterprises in main industries was as high as 47.6 per cent, in the transportation sector 58.6 per cent, and in construction 40.9 per cent.

A difficult situation existed in respect of payments among enterprises — only 15 per cent of all payments were made in terms of money. Beside the objective reasons, in many cases the insolvency of enterprises, including their incapacity to pay wages, was due to the unsatisfactory management of industrial and financial activities of companies and to inefficient privatization, in the course of which economic stabilization and industrial activities had not become high-priority matters for the new owners. Unfortunately, for many managers of enterprises, it had become possible to use the non-payments to resolve their financial problems at the expense of the State and their own workers. This could be explained by the fact that the economic, disciplinary and administrative responsibility for such action was not adequate as compared with the profits made. In this connection, the Government was undertaking special measures: intensive training of personnel (including training abroad) in order to enable it to provide for effective enterprise management in the new economic conditions and elimination of drawbacks and shortcomings in legislative activities. Moreover, the Government counted on the effectiveness of the measures undertaken with a view to strengthening the financial and tax discipline and to reducing budgetary expenditures.

In this regard, it was appropriate to refer to the plan of draft legislation of the Russian Federation for 1998, which included the elaboration of 75 draft federal laws. Many of them were related to the social and labour fields and dealt with such issues as conditions of work, payment of wages and salaries, social security, occupational safety and health, guarantees for trade union activities, etc.

The Russian Federation continued to suffer economic losses due to the high number of officially unemployed persons. This unemployment had caused the Federation to incur losses amounting to 63.8 million roubles (the fund for the payment of salaries; reduced income tax revenues and contributions). If the methods of calculation of the ILO would be applied, these losses would amount to 128.6 million roubles, that is, twice the amount.

Although Russia did not yet fully take part in the world economy, it was already considerably and directly influenced by the evolution at the global level. The prices on the international market of a series of Russia's export products, such as petrol, fuel, iron ore and other metals, had fallen drastically, which had caused Russia to incur losses amounting to some 2 billion dollars in 1998. The level of the salary funds for the oil sector fell to 5.4 million roubles and in the coal sector to 1.4 million roubles. Substantial economic losses had also been incurred in the context of the provision of natural gas, wood and synthetic rubber.

In Russia, the economic situation had undoubtedly also suffered from the setbacks caused by the Asian financial crisis. Difficulties on the domestic financial market had forced the Government and the Central Bank to significantly increase the rates of private loans. Should Russia not have proceeded to do so, the national currency would have had to be devalued by 30 per cent. The measures undertaken had allowed for a return to a situation comparable to the one before the crisis.

The problems of wage arrears were directly related to the structural reforms in the economy which did not have any easy or quick solution, taking into account the specificity of Russian conditions. These reforms were being coordinated to a certain extent with the World Bank and the International Monetary Fund which usually downplayed the importance of the social aspect of the problem.

As regards the indebtedness of enterprises financed from the regional and local budgets for 1997, it was practically eliminated through financial assistance given to them for the amount of 20 billion roubles. In January 1998, only five constituent regions of the Federation still had wage debts.

What was the present policy of the new Government of Russia in the solution of the problem of wage arrears? Two ways were opened: the way of confrontation with social partners, mutual accusations and consequent departure from the democratic roots which were taking hold in Russia with many difficulties. The other way was that of cooperation, dialogue and joint efforts, the way which was advocated by the ILO and which was now followed by Russia. The way of cooperation had brought positive results, as reflected in the technical programmes carried out together with the social partners and the ILO, in the ratification of the ILO Conventions which have become the main sources for the development of the national legislation. At the end of 1997, a conference of the International Confederation of Free Trade Unions was held in Moscow together with the ILO and the Russian trade unions on the question of wage payment. In April of this year, on the same question, a meeting was held of the representatives of the government agencies (Ministries of Labour, Finance and Education) with the leaders of the trade union of workers in education and science and the Federation of Independent Trade Union of Russia. In both cases, recommendations were made to the Russian Government. In particular, it was suggested that trade unions might be used to intensify control over the payment of wages. Recently, on 5 May 1998, the President of Russia had taken the decree “On additional measures to ensure payment of wages to workers in the budgetary sphere and to improve the financial situation”. This document determined the conditions of financial assistance from the federal budget to the regions constituting the Russian Federation; the Government was obliged to conclude in two months' time an agreement with them about the provision of such financial assistance. It was to be noted also that the problems of the timely payment of wages were reflected in the general and industry-wide tariff agreements and collective agreements.

Regretfully, in the Committee of Experts' report on the application of Convention No. 95 in Russia, the data supplied by the Government was not reflected in full. This concerned questions of supervision of legislation on wages by the labour inspection. In this respect, the speaker recalled that in 1997, the labour inspectorate, together with the prosecutor's office, the tax inspection office, Ministries of Finance and the Police carried out inspections in 45,000 enterprises and undertakings in Russia which revealed more than 27,000 cases of violation of legislation on wages which resulted in the payment of wages due to workers of the amount of nearly six billion roubles. During the first five months of 1998, over 16,000 inspections were carried out and 1.7 billion roubles were paid in wages. Those who were violating legislation on wages and misusing budgetary finances were subjected to administrative and disciplinary sanctions. The Government had also submitted to Parliament draft laws to modify labour, administrative and criminal laws in order to increase the liability for violation of wage legislation. While this draft law had been submitted over a year ago, it had not yet been adopted by Parliament; neither had Parliament adopted the draft legislation to put an end to the massive violation by commercial banks which was having a direct impact on the situation of wage arrears. Detailed information on these measures and inspections would be supplied to the ILO.

The Government valued active dialogue with its social partners and had the political will to resolve the crisis. In this process, it was important however not only to conserve the basis for social partnership and tripartism, but to give them an additional stimulus and development. The Government expected support and cooperation from the social partners, besides criticism which it fully accepted. It also expected technical assistance from the ILO which was expressly mentioned in the recommendations of the Governing Body concerning the representation made under article 24 of the ILO Constitution. These recommendations had been studied and the present Government would no doubt make use of them. The speaker hoped that the recommendations made by the ILO would lead to positive practical results. The new Government of Russia considered the solution of the wage arrears problem its first priority, which could be found only in dialogue with the social partners on a tripartite basis. In conclusion,

he expressed the hope that this Committee would take into account the fact that the new Government had come to power only two months ago, as well as the fact that the problems of application of Convention No. 95 in Russia were not of a purely formal or legal character, but rather were due to the difficult economic situation of the country in a transition period.

The Employers' members noted the different climate in which discussions with the Government representative had taken place. Although this climate had changed for the better, this case was very serious. The Committee of Experts had made observations on several occasions in respect of this case which had been examined by the Conference Committee in 1995. Many representations were pending alleging the non-payment or delayed payment of wages. The Governing Body had adopted recommendations urging the Government to ensure that the Convention was fully applied and, in this regard, to ensure prompt payment of wages. The Government had also been urged to strengthen the supervision of payment of wages through the reinforcement of the activities of the labour inspectorate, and to prevent the diversion of funds, which should be used to pay wages, for illicit purposes. Referring to the figure set out in the report of the Committee of Experts, the Employers' members stressed the magnitude of the problem in practice. Although the Government representative had indicated that measures of supervision were being carried out and penalties imposed, there was a considerable delay in paying outstanding wages. The Employers' members were of the view that there was a lack of both planning and a set timetable to address the problem. Moreover, new allegations from national and international trade unions had painted a worrying scenario since the figures reflected in these reports affected the fate of human beings. The Government representative had referred to several presidential decrees and orders. However, these were still in draft form, therefore clarification should be sought on measures which would be taken to solve the problem. Turning to the written information provided by the Government in which additional information had been given, the Employers' members pointed out that this information once again related to draft legislation and projects and did not demonstrate that concrete measures were being taken leading to a speedy resolution of the problem. The Government representative, as well as the Committee of Experts, in its earlier comments, had stated that the problem of wage arrears was linked to the special situation of the country's transition to a market economy. The Employers' members were of the opinion, however, that the non-payment of wages was not illustrative of a market economy although this phenomenon could be due to the transition to such an economy. In the meantime, too many elements of a planned economy still existed in this country and a more rapid transition to a market economy would alleviate the problem. Moreover, the Employers' members indicated that, under a system of civil law, services and counter-services were mutually related. If workers provided services, it was not in conformity with the principles of contract law that the employer did not comply with his obligation to pay wages on time. Therefore a reliable legal framework covering judicial proceedings, if necessary, should be established in order to guarantee the payment of wages. As a result, the Government should be urged to elaborate, in consultation with the social partners, a legal framework in order to guarantee the prompt payment of wages.

The Workers' members supported the statement made by the Employers' members concerning the positive change in attitude of the Government of the Russian Federation towards the ILO. They thanked the Government representative for the additional information provided and the written information furnished. They recalled that this case had already been discussed in 1995. Last year the Workers' members had proposed to include this case in the list of individual cases. But, in view of the representation submitted pursuant to article 24 of the Constitution and the procedural rules providing that general and special procedures not be examined at the same time, this Committee was not able to discuss this case at the time. In the meantime, the Governing Body in November 1997, had adopted the report and recommendations of the Committee set up to examine this representation. The Committee of Experts, as well as this Committee, were now in a position to examine the implementation of the recommendations adopted by the Governing Body, and to discuss the developments in law and in practice concerning the application of the Convention in all sectors and regions of the Russian Federation. The Workers' members considered that the main problem was the wage arrears incurred, i.e. the delayed or non-paid wages. Wage arrears was a significant problem in the Russian Federation. There were millions of workers, including their families, who were suffering from the non-payment or the substantial delays in the payment of wages. The problem was actually even more serious than the figures provided by the Government and contained in the report of the Committee of Experts seemed to suggest. It affected all sectors of the economy and not only the educational or health sectors. The written information provided concerned only certain public sectors and not the private and semi-public sectors. The problem of wage arrears was only partially caused by the transformation of the economy. It was also caused by serious difficulties related to the efficiency of the national legislation, the efficiency and transparency of the decision-making procedures at the enterprise, as well as, local, regional and national authority levels, the tax and the legal system.

The Workers' members stressed that pursuant to requests by the ILO, the Government had already taken certain measures in spite of increasingly important social tensions. Unfortunately, the measures had not sufficed to ensure regular payments of wages. The information available did not permit the conclusion that there were any tangible improvements made. In the same vein, the Committee of Experts had noted that, in spite of the measures taken until present, there were no indications that the situation had improved. As an example, the total decrease in wage arrears did not fully amount to 2 per cent in July and August 1997. This was a cause for concern particularly against the background of the statement of the Government representatives in 1995. The Government had conceded that there were serious problems in regard to the efficiency of national legislation and the legal system. The Workers' members declared that they were extremely concerned by the gravity of the situation and its serious social consequences. The Committee of Experts, as well as the Committee set up by the Governing Body shared these concerns. The Workers' members therefore asked the Committee to take their serious concerns into account in the conclusions.

As regards workers employed by organizations operating under the state budget, including teachers and workers in the health sectors, the Government referred to two draft presidential decrees in the written information submitted. The Workers' members recalled that these decrees had elaborated a plan aimed at promoting the rapid payment of wages to workers. The Workers' members considered that the measures reported did not seem to introduce any truly new elements. In addition, the information provided was not as concrete and detailed as had been requested by the Committee of Experts and the Governing Body. While the involvement of trade unions in the supervision was in itself a positive element, care had to be taken that the Government and the employers did not use the presence of the trade unions as a means to evade or free themselves of the timely obligation to pay wages and to apply Convention No. 95.

They insisted that the Government should be requested to submit, without delay, detailed information on the number of affected workers and enterprises, on the type of affected enterprises, on inspections conducted, on penalties imposed, on the total amount of payments made, the impact of these payments on the arrears, and on a detailed timetable for the payment of wage arrears. Once again, they asked the present Committee to take these elements into account in the conclusions.

Concerning the problems of application of Convention No. 95 in general, in all sectors, the Government should undertake forceful measures in three areas: (1) effective supervisory mechanisms; (2) appropriate penalties to prevent and punish infringements; and (3) steps to make good the prejudice suffered. The Government should inform the Committee of Experts of all legislative and practical measures undertaken. This information should contain detailed information on inspections carried out, payments of arrears made and the damages paid for economic losses. The Government should provide detailed information to enable the supervisory bodies to follow the situation and concrete developments.

In conclusion, the Workers' members stated that the Government should respond to the questions raised by the Committee of Experts concerning the prohibition of payment with promissory notes or coupons, payments in kind and the treatment of wages as privileged payments in the case of bankruptcy. Convention No. 95 was an important Convention for workers. It provided for important rights and principles related to the daily life of workers and their families. Consequently, the Workers' members stressed that the Government, as well as the public authorities, should urgently undertake energetic measures to ensure respect of the Convention in law and in practice. They wished to be able to follow developments closely and would bring this case before this Committee again next year, should they not be able to record any substantial progress.

The Worker member of the Russian Federation, emphasizing the importance of the problem of the non-payment of wages and accumulation of wage arrears for the well-being of the millions of workers and their families in Russia, pointed out that violations of wage legislation happened not only in the budgetary sphere, but were common to all sectors of the economy. Under the terms of Convention No. 95, the Government was responsible for the non-payment of wages by all enterprises and not only those belonging to the budgetary sector. As regards the opinion expressed by the Employers' members, that wage payment problems were caused by the fact that the Russian economy still conserved many features of a centrally-planned economy and was slow in transition to the market economy, he considered that this was a distorted vision of the situation, which, on the contrary, was characterized by an absolute lack of any planning and coordination, which might have indeed contributed to the wage indebtedness.

Regarding the suggestion to involve trade unions in the close supervision of the payment of wages, the important issue that remained was the need to ensure the transparency of the financial documents of the undertaking in case it did not pay wages due to its workers, and it was in this respect that the involvement of trade unions in supervision might bring effective results. The Committee of Experts should pay attention to this aspect.

Concerning the overall situation with respect to the non-payment of wages, it was worsening with every passing day. At the time the Governing Body had considered this question in November 1997, the overall indebtedness amounted to US$9 billion, while in May 1998 it had already amounted to US$10 billion. Convention No. 95 was also being violated in that wages were paid in illegal forms such as promissory notes, coupons or in kind. The Committee had already considered the situation in Russia on several occasions, the first time being in 1995. A number of legislative measures were then adopted aimed, in particular, at protecting wages in case of bankruptcy. However, the constitutionality of these measures was questioned by some government institutions before the Constitutional Court of Russia which had, in December 1997, repealed the modifications which were ensuring increased protection of wages. This had led to the violation of Article 11 of Convention No. 95 according to which wages should be treated as privileged credit in the case of bankruptcy of an enterprise. In addition, the judicial system, including the Supreme Court of the Russian Federation refused to accept claims for compensation for moral damages because of the late payment of wages. This showed that the Government and other state bodies had ignored the decisions taken by this Committee in 1995 and by the Governing Body in 1997 concerning non-payment of wages in Russia. At the same time this problem had led to social upheavals and civil unrest as illustrated by the miners' recent action of blocking the railways and the legal proceedings instituted against the trade union leader in the city of Urga in Kemerovo region for such action in defence of workers' wages.

The speaker pointed out that non-payment of wages now concerned not only state and private enterprises, but also some foreign companies doing business in Russia, and cited an example of a Swedish company in the city of Segech in Karelia which had failed to pay wages to its employees since January 1998 amounting to US$6million. Consequently, Russian workers supported the conclusions of the Committee of Experts that the Government should complete its general observations on the subject by announcing very concrete and detailed measures aimed at the speedy liquidation of the accumulated wage debts. The General Tariff Agreement, according to which the Government took the obligation to liquidate all wage debts before 1 July 1998, was not being observed. Therefore the speaker urged the Committee to follow this case with much stricter control and not to hesitate to use all the instruments at its disposal in case the measures taken by the Government proved to be insufficient in improving the situation.

Another Worker member of the Russian Federation thanked all the ILO bodies concerned for their attention given to the representation made by Education International and the Education and Science Employees' Union of Russia alleging non-observance by Russia of Convention No. 95, as well as for the absolutely correct recommendations which had been addressed to the Government. She agreed with the previous speaker that questions of violation of Convention No. 95 in Russia were not limited exclusively to the sphere of education because non-payment of wages had become a general problem extending to many other sectors of the economy. As regards the situation of payment of wages in the educational sector, it had become worse. In spite of all the measures taken by the Government, the wage debt had increased and amounted at present to US$1.5 billion, which meant that delays in the payment of wages lasted at least three months. As to the amount of the wage itself, it was very low: the average wage in education amounted to only US$90-100 per month, which meant that a young school teacher could not count on receiving more than US$30-50 per month, while a university professor would get US$100-150. The situation was aggravated by the fact that teachers were not certain to receive payments for the coming annual summer holidays. Trade unions were conscious of the fact that payment of wages and of arrears of wages was the responsibility of state bodies at different levels, but insisted that it was the responsibility of the Government to ensure full application of Convention No. 95 and to take such practical measures that would progressively eliminate wage debts. This had to be the constant responsibility of the entire Government, and the recommendations of the Committee of Experts and of the Governing Body were very clear in this respect. The fact that the situation was not improving showed that the position of the Government in carrying out consultations and negotiations with the trade unions could not be called constructive. Its good intentions expressed at the negotiating table did not result in the taking of concrete measures that were necessary in practice. It was the third occasion that the non-observance by the Russian Federation of Convention No. 95 was being considered in the ILO. The situation was not improving, it was in fact deteriorating, and deserved the adoption of a special paragraph in this case. It was to be hoped that this time the Government would pay full attention to the recommendations of this Committee and would not fail to take consistent and concrete measures to implement those recommendations in constructive dialogue with the trade unions.

The Worker member of Norway, speaking on behalf of the Nordic Workers' group, stated that the fact that workers in a country which could be among the richest in the world were not paid their fair wages for the work they were performing or were being paid very late was a tragic situation. The workers of the Russian Federation were previously used to relatively safe living conditions, getting their wages on time, and functioning social security systems. The trade unions in the Nordic countries had been following the struggle of their comrades in FNPR with the Government and with private companies to secure for Russian workers their most self-evident right “ the right to be paid for the job they were doing. The trade unions in the Nordic countries had been supporting this struggle, morally and financially, and would continue to do so. They were in full agreement with the gloomy analysis that the country was actually on the verge of a social explosion. Action had to be taken soon, meaning that workers had to be paid. No one could exist or function in society unless they had food to eat, could support their children, and care for their families. The trade unions were doing a formidable job in trying to save the country from social chaos. In Norway and Finland, trade unions witnessed this very well. They cooperated with their comrades both in the Murmansk Arkhorgelsk and St. Petersburg regions, and in other regions as well, and saw how the trade unions were both taking action vis-à-vis the Government, as well as taking care of the daily needs of their members. They were in fact, in many places, the only security network that the workers had. But the problem of non-payment of wages could not be solved by anyone else but the Government through more effective supervision, appropriate sanctions, etc. The non-observance of Article 12 of Convention No. 95 had to come to an end. It was the responsibility of the Government to ensure payment of wages and these wages had to be paid on time and it was the responsibility of the Government to collect sufficient taxes in the public sector. All possible measures had to be taken in the other sectors, especially in the production sectors. The violation of this important Convention, the implementation of which most people in this Committee took for granted, had to be stopped. She recalled that the workers of a country were its most important resource and that the Government of the Russian Federation could not afford not to treat the workers decently; decency meant in this case: paying them the wages they were entitled to. The Russian Federation could not afford a development leading to social chaos.

The Worker member of the Ukraine recalled that two years ago this Committee had considered the same question and that, in the meantime, notwithstanding the measures taken by the Russian Government, the overall wage debts had increased. The wide practice of not paying wages on time, in violation of the labour legislation and collective agreements had turned into a main factor of social tension in the majority of enterprises, industries and regions. In April 1998, the Federation of Independent Trade Unions of Russia conducted a nationwide action of protest calling for the full payment of wages in accordance with the General Agreement for 1998-99. This action was supported by the Federation of the Trade Unions of Ukraine which conducted the same kind of action in their own country where the problem of non-payment of wages, pensions, scholarships and other social payments was not less acute. This problem emerged in 1992 and since 1995 had become a standing feature of the national economy. In 1996-98, Parliament, the President and the Cabinet of Ministers of Ukraine had adopted more than 40 laws aimed at ensuring the timely payment of wages; the majority of these Acts, as well as the time schedules of payments approved by all social partners, had not been fulfilled. The ultimate agreement in this respect set 1 November 1997 as the date of full payment of wage arrears, but since then these arrears had been steadily increasing. The chief reason for this was that in the Ukraine, as well as in Russia, the process of the primary accumulation of capital took the most outrageous forms of appropriating the results of labour of workers by other economic agents. He emphasized that non-payment of wages had resulted in a decrease of the consumption capacity of the population and, ultimately, had led to the need for more foreign credits. The international agreements concluded to this end by Ukraine with the World Bank, the International Monetary Fund, and the European Bank for Reconstruction and Development contained many unfavourable requirements. Last year, Ukrainian trade unions asked the ILO to take into account the magnitude of the wage indebtedness problem during the elaboration of the next Memorandum of Understanding with the International Monetary Fund, so as to lessen the limits on credits and the state budget with the aim of helping enterprises to reconstruct their productive capacity. This appeal, however, had not been heard. In conclusion, he supported the suggestions put forward by the Federation of Independent Trade Unions of Russia.

The Worker member of France considered that the wage arrears were not only related to a lack of funds or the economic crisis. In relation thereto, he referred to the observation in the report of the Committee of Experts which specified that according to the Russian Chemical and Allied Industries Workers' Union, the arrears in this branch alone amounted to 1,362 billion roubles. In certain cases these funds had been manipulated by the banks in the interest of certain persons, instead of serving the needs of the enterprises. He also referred to the paragraph concerning supervision measures further to which, according to the information provided by the Government, some 14,500 flagrant violations of wage legislation had been revealed by the Russian Labour Inspectorate. In this context, the speaker recalled that one of the basic principles of the ILO was that there could not be any civil or social peace without social justice. He considered that the non-payment of wages for efficient and productive work constituted the most serious of social injustices. The situation was aggravated by the fact that, as the Committee of Experts had emphasized in its report, funds destined for payment of wages often were inappropriately used to benefit certain persons. Moreover, this was a situation prevailing at the very instant when this country was considering joining the WTO and participating in G8 meetings. Finally, the Government should carry out enterprise inspections and amend its legislation to the effect that all those who violated wage legislation by non-payment of wages be, and remain, dissuaded therefrom.

The Worker member of Pakistan regretted the plight of Russian workers due to the non-payment of their legitimate wages for a considerable period of time. According to observations received from workers' organizations, the total wage debt amounted to over US$9billion. This had caused much social and economic hardship for workers and their families. According to the information supplied by the Government itself to the Committee of Experts, around 96,700 enterprises owed wages. Moreover, some funds had been used for purposes other than for the payment of wages. In these serious circumstances, the Government should be urged to observe the conclusions of the Governing Body and those of the Committee of Experts relating, not only to the regular payment of wages directly made out of the federal budgets, but also to the payment of wages to all workers in the country to whom wages were due.

The Worker member of China indicated that Chinese workers and unions were deeply concerned about the non-payment and late payment of wages to workers in the Russian Federation. He wondered how workers could survive without the payment of their wages. Moreover, this phenomenon affected various other persons including the families of the workers. The Government should take decisive measures to solve this problem and the national economy should not be promoted at the expense of the workers. While he acknowledged that this problem was multifaceted, the Government had the major responsibility for solving it. The Chinese experience showed that legislation and legal supervision needed to be strengthened if this problem were to be resolved. He hoped the Government would take forceful measures in this area.

The Worker member of Spain emphasized the seriousness and urgency of the problem of wage arrears in the Russian Federation and supported the reasons invoked by the Employers' members in this respect. The amount of wage arrears exceeded US$10 million. The situation was becoming more and more serious every day, causing a deterioration in the working conditions and daily life of workers and their families. The alleged lack of resources stood in stark contrast to the frauds, the embezzlements and the lucrative activities of the Mafia that everybody was aware of. A social dialogue was necessary, but such a dialogue would be meaningless if it did not result in immediate payments of wages and the elaboration of methods to pay the wages. This problem should be resolved before the end of next year. He also expressed the wish to make this case the subject of a special paragraph.

The Worker member of Belarus noted that under the pressure of the trade unions the Government of Russia had been taking measures which permitted the reduction of wage arrears, which then started to accumulate once again and attained even higher levels. Common people were losing all hope that they would ever receive regular wages and be able to support their families in the normal way. This was why they resorted to blocking railways and manifested against economic reforms. Consequently, the political situation in Russia was deteriorating and was directly influencing the situation in its neighbouring countries, and in Belarus in particular, where the trend of late payment of wages had recently increased. For these reasons she urged the Committee to keep the question of the observance by Russia of Convention No. 95 under its constant and vigilant supervision.

The Government representative of Russia thanked all the speakers for their comments and criticisms, and in particular the Worker member of the Russian Federation, and emphasized that this dialogue had illustrated the recent nature of tripartism in Russia. His Government shared the concern of the Committee as to the gravity of the situation. All of the Committee's recommendations would be brought to the attention of the Government which intended to pursue dialogue and cooperation with the social partners and with the ILO in order to find a solution to the present crisis. The Government intended to regularly inform the ILO concerning developments in the situation.

The Committee noted the written and oral information supplied by the Government representative and the discussion which took place. The Committee noted that the measures mentioned and the preparation of various draft texts and rules including two draft presidential decrees, did not appear to have much novelty as compared to what had already been done by the Government. The Committee noted with regret that the Government had supplied no concrete and detailed information as requested in the observation of the Committee of Experts and also by the Governing Body (e.g. number of workers affected, inspections made, penalties imposed, time schedule of the payment of wage arrears). The Committee noted with deep concern that there was still no evidence of clear, concrete and definite improvement of the situation which was extremely grave and had very serious social consequences. The Committee strongly urged the Government to make a clear commitment to put an end to these violations of the Convention and to take, in consultation with the social partners, a package of measures, not only making rules such as decrees but also ensuring their effective enforcement in practice, in particular by the imposition of appropriate penalties in the case of violation, so as to ensure the payment of wages on time and the rapid settlement of wage arrears already outstanding. The Committee furthermore strongly urged the Government to supply full and detailed information on a coordinated package of measures taken and the results achieved. Such information should include all statistical data requested by the Committee of Experts, for instance, number of workers affected and the outstanding amount of wage arrears, inspections made, penalties imposed and the time schedule of the payment of wage arrears. Finally, the Committee also urged the Government to supply the information requested in the observations of the Committee of Experts on the other provisions of the Convention. The Committee firmly hoped tobe in a position next year to note concrete and definitive improvements in the situation.

 Convention No. 97: Migration for Employment (Revised), 1949

 Malaysia (Sabah) (ratification: 1964). The Government has supplied the following information:

An ILO technical advisory team visited Malaysia on 18-19 May 1998 to study in depth the concerns raised by the Government in respect of compliance with the present Convention (as well as Convention No. 19). The team met with the Government and representatives of employers and workers in separate discussions. A report will be prepared by this team on the findings of these discussions. A copy of the report will be forwarded to the ILO as soon as it is available.

In addition a Government representative recalled that the Government had provided an exhaustive explanation to the Committee the previous year concerning the allegations of discrimination in the payment of employment injury and invalidity compensation to foreign workers under the Workmen's Compensation Scheme. Since then, on 17 and 18 May 1998, an ILO team of experts had visited the country, and held discussions with government officials and with employers' and workers' representatives. The information provided at the government meeting was objective and detailed, and the expert mission expressed satisfaction at the meeting and had appreciated the information provided. A report was being prepared by the relevant MDT on the findings of the expert mission. As it had been awaiting the visit by the ILO expert team, the Government had not been able to report any new developments to the Committee of Experts.

The Employers' members noted that it was the third time in three years in which the Conference Committee had examined this case. Despite the detailed discussion and conclusions reached the previous year, the Committee of Experts had noted that the requested report had not been received and had therefore repeated its previous observation. Once again this year, the Government representative provided an extremely short explanation of the situation. The criticism of the Committee of Experts was that, in the event of an occupational accident, foreign workers received compensation in the form of a lump sum, whereas nationals had the right to the periodic payment of these benefits. The Government had in the past described the advantages of lump-sum payments for workers to whom it would be difficult to guarantee the periodic payment of benefits. The question therefore arose as to whether the Convention provided for absolute equality of treatment in this matter. The Convention required that migrant

workers must receive treatment that was not less favourable, which could imply equal treatment, better treatment or treatment of equal value. The comparison between the value of periodic benefits and that of a lump-sum benefit was a particularly delicate and technical question. The Government believed that in this case the benefits were equivalent. As the Government had not provided a report, the Committee of Experts had not been able to raise new elements. The only new information available, also in written form, concerned the advisory mission undertaken recently by the ILO. The secretariat could inform the Conference Committee of the spirit in which the mission had been carried out and the results which had been obtained. Beyond this, no new elements were available which would allow the Conference Committee to modify its conclusions from the previous year.

The Workers' members emphasized that the Conference Committee was discussing this case for the third consecutive time. The Government could have avoided its name being placed once again on the list of cases for examination by sending a report containing the information, requested by both the Committee of Experts and the Conference Committee concerning the level of benefits effectively provided to migrant workers as compensation for occupational accidents. The Government had itself undertaken to do so last year. In view of this commitment, the previous conclusions and the importance which the Conference Committee attached to the principle of non-discrimination, it had had no choice but to discuss the case again. The brief indications provided in writing and by the Government representative concerned only the ILO technical advisory mission carried out in May 1998 and legislative changes mentioned in the past which were planned to give effect to the principle of equality of treatment for migrant workers. It would appear that these changes had only increased the ceiling of the lump-sum benefits available to migrant workers, without extending entitlement to periodic benefits to them. The Government's position was based on bilateral agreements under which the other State party to the agreement had accepted the exclusion of its nationals from the benefits of the Employees Social Security Act. However, as emphasized by the Committee of Experts, bilateral agreements of that nature could not strike down the principle of non-discrimination set out in a ratified Convention. In the context of globalization of the economy, universal scope of the principle of non-discrimination needed to be reaffirmed. Both individual States and the international community needed, in particular, to ensure that the principle was respected with regard to migrant workers, who were a very vulnerable group. The Government had referred in particular to problems of a practical nature. The technical solutions to these problems should not in any event lead to unequal treatment in the amounts of benefit paid. It was essential for the Government to furnish a report on the developments in this case for examination by the Committee of Experts. It should also indicate the position of the social partners on the subject.

The Deputy Representative of the Secretary-General confirmed that a high-level technical advisory mission had visited Malaysia on 17 and 18 May 1998. The internal mission report had been received and was the subject of consultations in the Office. The mission still had to submit its report to the Government. The report would serve as a basis for continued dialogue with the Government, particularly with a view to the preparation of the report which was due to be provided for examination by the Committee of Experts at its next session in November-December 1998.

The Worker member of Malaysia reported that the Malaysian Trade Union Congress had received the visit of the ILO expert team. Following their meeting, the team of experts had undertaken to set out the results of its discussions with the social partners in a report for further consideration by the relevant parties. In the light of this visit, he suggested that it would be premature for the Conference Committee to discuss the matter further at this stage.

The Worker member of Pakistan emphasized that migrant workers were one of the categories of the population for whose protection the ILO had been established. This category of workers was particularly vulnerable in the event of injury because it did not have the usual family support and therefore required greater care to achieve recovery. The Conference Committee had discussed this case on three occasions and the Committee of Experts had pointed out that, even with the consent of the workers concerned, it was not permissible for migrant workers to bargain away their right to equality of treatment. In the event of prolonged sickness, migrant workers, like all other categories of workers, required medical facilities and periodic benefits to secure their financial situation. He therefore called upon the Government to give effect to the recommendations of the Committee of Experts both in the context of this Convention and of Convention No. 19, also ratified, and looked forward to the adoption of a solution which would benefit migrant workers.

The Government representative said that he had taken due note of the comments made by the various speakers. However, pending receipt of the report promised by the ILO team of experts, he had no further comments to make.

The Employers' and Workers' members considered that, in the absence of any new information from the Government and the absence of details as to the results of the ILO advisory mission, the Conference Committee was bound to reiterate its previous conclusions and to express the hope that the results of the mission would help to resolve the problems.

The Committee took note of the written and oral information supplied by the Government representative and of the discussion which ensued. The Committee regretted that no report had been sent. However, the Committee noted that a technical advisory mission had recently visited the country to examine ways of ensuring no less favourable treatment of non-nationals than nationals in the area of industrial accident benefit. The Committee expressed the hope that with the technical assistance of the ILO, the Government and the social partners would arrive at a solution to the coverage of non-nationals — either by placing them back under the Employees' Social Security Scheme, where they had previously enjoyed the same benefits as nationals, or by amending the Workers' Compensation Scheme under which they were currently placed — so that compliance with Article 6 of the Convention was ensured. The Committee stressed the fundamental importance of equality of treatment between nationals and foreign workers provided for by Conventions Nos. 97 and 19. The Committee trusted that the next report of the Government to the Committee of Experts would reflect positive developments in this regard and urged the Government to report in detail on all the points raised by the Committee giving also information on the positions of the social partners. It expressed the hope that the result of the technical assistance visit from the ILO would bring the case closer to a solution.

Convention No. 98: Right to Organise and Collective Bargaining, 1949

Australia (ratification: 1973). The Government has supplied the following information:


1. By letter dated 27 August 1997, the Director of the International Labour Standards Department communicated to the Australian Government comments submitted by the Australian Council of Trade Unions (ACTU) on the application in Australia of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

2. The President of the ACTU wrote to the Director-General of the International Labour Office on 6 August 1997 expressing the view that “... the preference given to individual over collective bargaining rights in the Workplace Relations Act 1996 ... constitutes a serious breach of Convention No. 98”.

3. The Australian Government's comments on the various issues raised by the ACTU are provided below. In summary, the Government considers that the ACTU's claim that the relevant provisions of the Workplace Relations Act (the WR Act) are in breach of Convention No. 98 is unfounded.


4. The ACTU's comments are primarily directed towards Part VID of the WR Act which provides for the negotiation and approval of Australian workplace agreements (AWAs). These are agreements made directly between employers and individual employees.(1) Part VID of the WR Act commenced on 12 March 1997. These provisions were part of a major overhaul of the Commonwealth industrial relations legislation initiated by the Government when it took office in March 1996. The previous legislation, the Industrial Relations Act 1998 (the IR Act), was substantially amended by the Workplace Relations and Other Legislation Amendment Act 1996 (the WROLA Act), and the amended Act was renamed the Workplace Relations Act 1996.

5. The provisions of the WR Act relevant to Convention No. 98 are explained in detail in Australia's article 22 report on Convention No. 98 for the period 1 July 1995 to 30 June 1997.

Scope of the ACTU's comments

6. The ACTU claims that the WR Act gives “preference” to AWAs over awards and collective agreements, and that the relevant provisions of the Act constitute a breach of Convention No. 98. The ACTU also asserts that employees are being disadvantaged by AWAs. The Australian Government points out that there is no basis for these claims.

7. The Australian Government notes that the ACTU relies on the findings of the ILO Committee on Freedom of Association (CFA) in respect of a complaint against the Government of New Zealand presented by the New Zealand Council of Trade Unions.(2) For reasons explained later in these comments, the Australian Government does not believe that the New Zealand case is relevant to the Australian legislation in question.

Australian Government's response


8. The Australian Government (“the Government”) rejects the assertion that the provisions of Part VID of the WR Act are inconsistent with Article 4 of the Convention. Article 4 states:

9. For most of this century, Australia has had a system of conciliation and arbitration which, while ostensibly compulsory, was intended to, and has, in practice, maintained a substantial element of collective bargaining both within and outside the formal systems established by legislation. Traditionally, collective bargaining took a number of forms:

– "pure" collective bargaining without recourse to federal or state industrial tribunals. This was formerly quite common in remote locations but the advent of rapid travel and communications has led to its decline;

– enforceable awards of industrial tribunals made “by consent”, that is, where the parties entered into negotiations and reached agreement on matters ostensibly in dispute between them and have presented the resultant agreement to the tribunal to be formalized as an award;

– awards of industrial tribunals made by arbitration and covering any matters not already agreed upon by the parties. The resultant award would be characterized as the product of arbitration but was, in a very real sense, the product of a process of collective bargaining;

– the negotiation of “over-award” terms and conditions. It has never been permissible to derogate by common law agreement from award standards set by consent or arbitration, but it has always been permissible to treat those standards as minima and negotiate to improve upon them (this has been, and remains, a common feature of Australia's industrial relations);

– the making of “paid rates awards”, i.e. awards setting out the actual as opposed to the minimum terms and conditions of employment which left no scope for over-award bargaining. Such awards were common in the public sector. Where they existed in the private sector, they were almost invariably made only with the consent of the parties. The WR Act does not now permit paid rates awards.(3)

10. The ILO's supervisory bodies have never found Australia's system of industrial relations to be in breach of the Conventions concerning freedom of association and collective bargaining in any fundamental way. There have been 12 complaints presented to the Governing Body Committee on Freedom of Association in relation to various aspects of state and federal labour legislation. Apart from Case No. 1559, none of these resulted in a clear and unequivocal finding that any aspect of federal law and practice was inconsistent with the principles of freedom of association and collective bargaining. Even in Case No. 1559 it was only the “very high minimum membership requirement” for registration under the IR Act that was found to be inconsistent with the principles of freedom of association.

11. In this context, reference is made to Case No. 1511, which concerned alleged infringements of Conventions Nos. 87 and 98 arising out of an industrial dispute in 1989 involving domestic airline pilots. The Committee considered that the events complained of did not disclose any breach of the principles of freedom of association and stated that:

12. It will be seen from the foregoing that collective bargaining, in various forms, has been firmly entrenched in Australia for many years and that this has been accepted by the ILO's supervisory bodies. Collective bargaining, both within and outside the formal systems established by federal and state legislations, is one of the norms of industrial relations in Australia. In addition, the trade union movement in Australia, which is, in general, well established, sophisticated, well organized and well resourced, has successfully engaged in collective bargaining within and outside the formal systems.

13. The long history and general acceptance of collective bargaining in Australia, as well as the established nature of the trade union movement, form part of the national conditions which are relevant for the purposes of compliance with Convention No. 98. The AWA provisions of the WR Act must be seen in the context of the wider range of bargaining arrangements which operate within and outside the federal industrial relations system: the Act continues to encourage and promote collective bargaining.(5) AWAs do not replace collective bargaining. They simply provide an alternative for those who do not wish to bargain collectively which was not previously available within the formal system established by the IR Act and its predecessors. However, it is also important to recognize that individual agreements are not a new feature of the federal system — as a matter of law, every employment contract is an individual contract.(6) Part VID simply puts in place a formal scheme for the making and approval of individual agreements which complement the provisions for making awards and for certifying collective agreements.

14. The introduction of Part VID of the WR Act was one element of a wider strategy aimed at shifting the emphasis of the federal industrial relations system towards increased bargaining at the workplace or enterprise level: see paragraph 3(b) of the WR Act. On this point, it is relevant to note that despite Australia's recent history of legislative and policy reforms directed towards increasing agreement making at the workplace or enterprise level, the employment conditions of approximately 40 per cent of workers within the federal system are regulated under the Act by an award only: for a variety of reasons, formal agreements have not been made in a significant proportion of Australian workplaces.(7)

15. The Government considers it essential to accelerate the shift towards workplace/enterprise bargaining to increase productivity and thereby improve the living standards of Australian workers. Accordingly, the WR Act has provided for a wider range of bargaining choices and a simplified award system which makes awards more clearly minima underpinning agreements.

16. It is important to note the provisions relating to collective agreements. Part VIB of the WR Act allows for collective agreements to be made which, subject to satisfying certain objective criteria, are certified by the Australian Industrial Relations Commission (the AIRC) and are thereby enforceable under the Act. Such agreements may be made between an employer and a representative registered union (or unions) or between an employer and employees of that employer (but provision is made for union members to be represented by their registered union and for such a union to become a party to the agreement).(8)

17. The WR Act provisions relating to collective agreements give particular emphasis to the views of employees by providing that agreements under Part VIB must be approved by a “valid majority” of employees whose employment will be subject to the agreement.(9) In addition, there are provisions which are intended to prevent discrimination, including against employees on the grounds of their membership (or non-membership) of a registered union.(10) It must be emphasized, however, that registered unions continue to have the right and capacity under the Act to initiate and pursue (including by industrial action) collective agreements covering their members. (Such agreements may cover existing and future employees.)(11)

18. An additional safeguard under the WR Act is the requirement for agreements (certified agreements and AWAs) to be underpinned by awards. As discussed elsewhere, awards provide minimum terms and conditions. Federal awards (i.e. those made by the AIRC) are now normally limited to a range of specified allowable award matters.(12) These relate to the most important aspects of pay and conditions of employment. There is, however, no restriction on the matters pertaining to the relationship between an employer and an employee which may be included in an agreement, apart from discriminatory provisions which are excluded by the WR Act.(13)

19. Awards are particularly important in the context of the “no-disadvantage test” which applied under the Act. This is discussed later, but it is to be noted that, with some limited exceptions, agreements must not reduce the overall terms and conditions of employment of the employees concerned under relevant awards or applicable Commonwealth, state or territory laws.

20. Another significant change under the WR Act which reinforces the emphasis on bargaining is the recognition in the Act's principal object (section 3) of the need to encourage not only agreements under the Act, but also outside the Act, e.g. under state laws or by over-award bargaining.

21. Against that background, the Government considers that the provisions of the WR Act concerning the making of awards and certified agreements, and the availability of collective bargaining outside the formal system, give effect to Article 4 of the Convention. The introduction of an additional form of regulating terms and conditions of employment, by individual agreement underpinned by the award system, adds choice for employers and employees under the Act but does not alter the other basic characteristics of the federal industrial relations system.

The making and approval of AWAs

22. The provisions of Part VID of the WR Act dealing with the making and approval of AWAs are outlined in the Commonwealth report on Convention No. 98. In summary, the key elements of the AWA scheme are as follows:

(a) Division 3 of Part VID deals with the making, variation or terminating of an AWA. An AWA may be made between an employer and an employee.(14) An AWA must provide for a number of specified matters, including anti-discrimination provisions and a dispute resolution procedure(15) and, other than in specified exceptional cases, must pass the no-disadvantage test.(16)

(b) An employee with whom an AWA is proposed to be made must be given a copy of the AWA at least the required number of days before signing the AWA (five days for a new employee and 14 days for an existing employee) and the employer must explain its effect to the employee.(17)

(c) The employee concerned must genuinely consent to making the AWA(18) and it is unlawful to dismiss an employee for refusing to negotiate in connection with, make sign, extend, vary or terminate an AWA.(19)

(d) If the employer has not offered an AWA in the same terms to all comparable employees (i.e. employees engaged in the same kind of work), the employer must not have acted unfairly in failing to do so.(20)

(e) An employer or an employee may appoint a person to be his or her bargaining agent for the purposes of the making, approval, variation or termination of an AWA.(21) An employer or employee must recognize a bargaining agent duly appointed by the other party.(22) An employer or employee must not coerce, or attempt to coerce, another party to appoint or not to appoint a particular person as a bargaining agent or to terminate such an appointment.(23) An individual or a group of persons (including a trade union) may be appointed as a bargaining agent.(24)

(f) An employer must provide to an employee with whom an AWA is proposed to be made a copy of an information statement prepared by the Office of the Employment Advocate(25) (see below). The information statement sets out the provisions of the Act relating to the making and approval of AWAs.

(g) Part IVA of the Act establishes the statutory office of Employment Advocate whose responsibilities include functions relating to the filing and approval of AWAs, investigating alleged breaches of AWAs, alleged contraventions of Part VID and any other complaints relating to AWAs and providing free legal representation to a party to a proceeding under Part VID if the Employment Advocate considers that would promote the enforcement of the provisions of that Part.(26)

(h) Division 8 of Part VID provides limited immunity for industrial action taken in relation to the making of an AWA, subject to some qualifications specified in the Act.(27) The Act also provides protection against dismissal or other prejudicial conduct for members of employees engaging, or intending to engage, in AWA industrial action.

The no-disadvantage test

23. Apart from the other requirements relating to AWAs, employees are protected by the requirement that an AWA must pass the no-disadvantage test (other than in exceptional circumstances). An AWA passes the no-disadvantage test if it does not disadvantage employees in relation to their terms and conditions of employment. Subject to some specified exceptions,(28) an agreement disadvantages employees in relation to their terms and conditions of employment:

... only if its approval or certification would result, on balance, in a reduction in the overall terms and conditions of employment of these employees under:

(a) relevant awards or designated awards; and

(b) any other law of the Commonwealth or of a State or Territory, that the Employment Advocate or the Commission (as the case may be) considers relevant.

A “relevant award” is an award (made by the AIRC or a state tribunal) regulating any term or condition of employment of a person to whom an agreement will apply. A “designated award” means an award determined by the Employment Advocate or the AIRC to be appropriate for the purpose of deciding whether an agreement passes the no-disadvantage test.(29) The Employment Advocate is required to designate awards when there is no relevant award applying to the employment of a person or persons whose employment is to be covered by an AWA.(30)

24. The no-disadvantage test is applied by the Employment Advocate,(31) and if the Advocate has any unresolved concerns about whether a particular agreement passes the test, the agreement must be referred to the AIRC.(32) The AIRC is then responsible for determining whether the test is met and, if not, whether to approve the agreement on public interest grounds.(33) Before commenting on the ACTU's claims, it is worth noting that as of 5 December 1997, AWAs had been approved for 4,177 employers while 1.74 million employees are covered by certified agreements.(34)

Comments on the ACTU's claims

25. At paragraph 6(a) of its letter, the ACTU states that “An AWA wholly displaces a federal or state award which would otherwise apply to the employment concerned.” The ACTU asserts that “collectively negotiated conditions may be totally replaced by different arrangements determined on an individual basis.” At paragraph 6(b), the ACTU states that “An AWA wholly displaces a certified agreement or other collective instrument made pursuant to state legislation.” The ACTU appears to have overlooked some important features of the legislative scheme.

26. Under the WR Act, a number of interrelated provisions operate to ensure an appropriate balance between voluntary collective bargaining and voluntary individual agreements. Importantly, when a collective agreement has been certified and is in operation, that agreement prevails over an inconsistent AWA which takes effect during that period unless the certified agreement expressly permits the AWA to prevail.(35)

27. If an AWA is in operation before a certified agreement takes effect, the certified agreement prevails if the AWA has passed its nominal expiry date. If the AWA has not passed that date, then it will exclude the certified agreement,(36) but once it passes its nominal expiry date, the AWA may be terminated on application to the AIRC.(37) Once the AWA is terminated, any certified agreement applicable to the employee will operate according to its terms.

28. The ACTU expresses concern that after a certified agreement has passed its nominal expiry date, an AWA may be made which prevails over the certified agreement. The Government considers that it is unexceptional for an agreement that has passed the period chosen by the parties for its operation as (effectively) a “closed”(38) agreement, to be replaced by another agreement, whether collective or individual.

29. The ACTU comments that an AWA wholly displaces:

(a) a certified agreement;

(b) agreements made under state law; and

(c) federal or state awards.

30. The relationship between an AWA and a certified agreement has been discussed in paragraphs 26 and 27 above. The ACTU's claim that an AWA displaces a certified agreement is only correct in the circumstances outlined therein.

31. During its period of operation, an AWA does exclude state awards and agreements, and, subject to limited exceptions, federal awards.(39) However, before an AWA takes effect, it must satisfy the no-disadvantage test. In other words, the employee must not, overall, be worse off than he or she would be under relevant or designated awards and other relevant laws.

32. It should also be noted that it is an ordinary effect under Australia's constitutional arrangements for a federal law or an instrument made under a federal law to prevail over inconsistent state laws (see section 109 of the Australian Constitution). An important (and for constitutional reasons, carefully framed) exception is provided by subsections 152(3)-(5) of the WR Act. These expressly provide for agreements made under state industrial laws to displace federal awards. Under section 152(5), a state agreement may only have this effect if it meets a no-disadvantage test, is genuinely made by consent and it covers all employees whom it would be reasonable to cover.

33. In the Government's view, these provisions operate as a reasonable balance between voluntary collective bargaining and voluntary individual agreements. In addition, they emphasize that awards provide an underpinning for agreements, thereby giving proper emphasis to bargaining.

The role of trade unions in the AWA process, etc.

34. At paragraph 6(d) of its letter, the ACTU states that “[t]he limited role for trade unions in the AWA process, together with the lack of any public hearing associated with approval, makes them an attractive option for unscrupulous employers.”

35. The legislation does not result in a situation where unions are excluded from effectively representing their members, however few members there may be at a particular workplace. Although a trade union cannot be a party to an AWA (reflecting its nature as an individual agreement between an employer and an employee), an employee may appoint a trade union to represent that employee during the bargaining process.(40) As previously noted, an employer must not refuse to recognize a bargaining agent duly appointed by an employee and must not coerce, or attempt to coerce, an employee to appoint or not to appoint a particular bargaining agent, or to terminate such an appointment. Also relevant in this context are the employee protections afforded by Part XA of the WR Act which prohibit victimization on the basis of union membership. The WR Act, therefore, provides for and protects the right of individual employees to be represented by trade unions in negotiations for AWAs.

36. As noted earlier in this response, the trade union movement in Australia is well established and organized; it is therefore well-equipped to ensure that employees are aware of their right to be represented by a union for the purposes of negotiating AWAs and that its services are available to those employees who want them. It is relevant in this context that the statutory employee information statement referred to in paragraph 22 above sets out employees' rights in relation to the appointment of bargaining agents. As previously noted, employers must provide this information statement to employees with whom they wish to make AWAs. In addition, as parties to awards, unions can have a significant role in relation to maintaining the benchmarks against which AWAs are assessed for the purposes of the no-disadvantage test.

37. It is also relevant to note that section 170WF of the WR Act, which prohibits the use of threats or intimidation with the intention of hindering AWA negotiations, makes clear that the prohibition does not apply to conduct authorized under the Act by or on behalf of a registered trade union for the purpose of negotiating a certified agreement.

38. As to the absence of public hearings in relation to the approval of AWAs, the Government notes, first, that the principles of collective bargaining do not require any form of public hearing in relation to the making of collective agreements (although this is provided for under the WR Act). Given the individual nature of AWAs, no need is seen for a public hearing. An AWA does not confer rights or obligations on a person other than a party to the AWA (apart from the rights and duties of the Employment Advocate). Secondly, Division 5 of Part VID of the WR Act contains specific and detailed requirements for the approval of an AWA by an independent statutory officer, the Employment Advocate, or, in appropriate cases, the AIRC. Unless those requirements are met, an AWA will not be approved. The Employment Advocate is an independent and impartial person appointed by the Governor-General under Part IVA of the WR Act. He or she is not subject to direction by the Government in respect of the approval of AWAs: see section 83BC. Similarly, the AIRC is an independent and impartial tribunal established by the Act.

39. The functions of the Employment Advocate include providing assistance and advice to employees about their rights and obligations under the WR Act, providing advice to employers and employees, in connection with AWAs, about the relevant award and statutory entitlements and about the relevant provisions of the WR Act and securing compliance with agreements. The Employment Advocate is required to have particular regard to the needs of workers in a disadvantaged bargaining position (for example, women, people from non-English-speaking backgrounds, young people, apprentices, trainees and outworkers).

Lack of requirement to bargain collectively

40. At paragraph 6(e) of the ACTU's letter, it states that “[t]here is no requirement in the Act for employers to bargain collectively, even if this is the desire of the workplace”. At paragraph 7 of its letter, the ACTU claims that employers can, in effect, refuse to negotiate collectively and the fact that the legislation permits this is inconsistent with Article 4 of the Convention.

41. In fact, the WR Act establishes a framework which facilitates collective bargaining. In relation to awards, as noted, registered organizations are able to seek to have collectively bargained agreements made by the AIRC as consent awards (with arbitration being available where parties remain in dispute). Registered organizations are also able to make collective agreements with employers and to have them certified under the WR Act. They may organize and take industrial action in pursuance of an agreement with an employer (or employers), and such action, taken in accordance with Part VIB of the Act, is protected from civil liability.(41)

42. During a bargaining period under the Act (in which immunity from civil liability applies), the AIRC may not arbitrate, but it is able to assist bargaining by exercising compulsory powers of conciliation.

43. Registered organizations are also free to bargain collectively outside the Act.(42)

44. Whilst the WR Act does not require collective bargaining for AWAs, it does not prohibit or prevent collective bargaining for that purpose. Collective bargaining is supported by the availability of the right to engage in industrial action free from civil liability. In addition, section 170VE clearly envisages that AWAs may be negotiated by a process of collective bargaining. The section provides, in part, that:

... 2 or more agreements that have been negotiated collectively may be included in the same document if the same employer is a party to all the agreements. The agreements need not be in the same terms.

45. In the Government's view, it is misleading to suggest that employees who do not wish to participate in collective bargaining should be denied access to an enforceable individual agreement, where they genuinely wish to be party to such an agreement. Such an arrangement could not reasonably be regarded as incompatible with Article 4 of Convention No. 98.

Senate Economics References Committee — Inquiry into the Workplace Relations and Other Legislation Amendment Bill 1996 (the WROLA Bill)

46. At paragraph 9 of its letter, the ACTU reproduces an extract from a submission by the International Centre for Trade Union Rights to the Senate Inquiry into the Workplace Relations Bill. The thrust of that extract is that the legislation “gives primacy to individual representation and individual agreements”.

47. The Government does not agree that the WR Act gives primacy to individual representation and individual agreements, and refers to the discussion of the AWA scheme and the relationship between AWAs and collective instruments above.

48. It is also important to note that the WROLA Bill was extensively amended by the Senate following the Senate Inquiry to which the ACTU refers. Substantial amendments were made to the AWA provisions, notably the inclusion of the no-disadvantage test. The provisions relating to certified agreements were also substantially amended. The Senate amendments were agreed to by the House of Representatives and the Bill was passed in its amended form. Any views expressed by members of the Senate Committee or persons making submissions to the Committee should be treated with particular caution given that they relate to the Bill as introduced in its unamended form.

Case No. 1698 (New Zealand)

49. In support of its contention that Part VID of the WR Act is inconsistent with Convention No. 98, the ACTU refers to the finding by the Committee on Freedom of Association that the New Zealand Employment Contracts Act (the NZ Act) breached ILO principles on collective bargaining.

50. The Australian and New Zealand systems are difficult to compare because each country has markedly different law and practice. The Australian situation does not come within the principles referred to in Case No. 1698. Among other things, it should be noted that:

– under the WR Act, AWAs are underpinned by awards (through the “no-disadvantage test” described above), whereas the NZ Act provides no such protection: in the absence of a collective contract, employers and employees may enter into such individual contracts as they think fit (subject to statutory requirements concerning such matters as minimum wages, holidays and discrimination);

– unlike the NZ Act, the WR Act provides for the voluntary registration of organizations of employers and employees; registration gives an organization various benefits under the Act, including corporate status which facilitates collective bargaining by enabling a registered organization:

– to be a party to an award or certified agreement in its own right;

– to exercise legal rights to bargain with assistance (including compulsory arbitration) from the AIRC; and

– to enforce those awards and agreements.(43)

51. Consequently, the Government does not agree with the assertion made by the ACTU at paragraph 15 of its letter that the findings of the Committee on Freedom of Association in Case No. 1698 are “even more relevant to the Australian system”. Nor does the Government agree with the assertion in paragraph 15 that the WR Act “actually favours individual over collective agreements”. The legislation does not favour AWAs over collective agreements. As noted earlier, the provisions for AWAs do not replace voluntary collective bargaining for individuals which is underpinned by awards which are themselves the product of a form of collective bargaining.

Bell Bay Case

52. At paragraph 16 of its letter, the ACTU refers to the decision of a Full Bench of the AIRC in Re Aluminium Industry (Comalco Bell Bay Companies) Award 1983 (1994) 56 IR 403 (the Bell Bay Case) in which the commission rejected an attempt by the employer to introduce a system of individual contracts. The commission found, in the circumstances of the case, that the measure was “... one which is at variance with our system of industrial relations, a system which, since its inception, has been based upon collective processes ... in which registered organizations of employers and employees acting as parties principal are an integral part of the collective processes which operate under the Act”.

53. In the Government's view, that case is not relevant to the current legislation. At that time, the relevant legislation (the IR Act) was quite different in a number of fundamental respects. Among other things, it relied upon a narrower range of constitutional powers (hence the AIRC's reference to the nature of the system). The IR Act made no provision for individual agreements of any kind and, in addition, the employer in that case was seeking completely to exclude trade unions from the process of negotiating such contracts. As explained earlier, Part VID of the WR Act enables an employee to appoint a trade union as a bargaining agent for his or her AWA and such an appointment must be accepted by the employer. Similarly, a member of a registered union is entitled to insist on the involvement of the union in negotiating a certified agreement if a union is not already involved.

54. It is, however, relevant to note that the AIRC has accepted individual contracts in a number of cases under the IR Act.(44)

Australian Centre for Industrial Relations Research and Training (ACIRRT) study

55. The ACTU asserts that “there is some evidence that employees are being disadvantaged by AWAs” and, in paragraph 23 of its letter, refers to an examination of a number of AWAs by the Australian Centre for Industrial Relations Research and Training (ACIRRT) at the University of Sydney. ACIRRT released their findings on 6 July 1997 in a report entitled the Agreements Database and Monitoring (ADAM) Report 13. The Government has examined the report and does not consider that it provides reliable evidence that employees are being disadvantaged by AWAs. The Government notes, in particular, that;

– the report was based on as few as ten AWAs, only five of which were believed to have been approved by the Employment Advocate;

– the report's examination of particular AWAs does not take into account any undertakings that may have been given in connection with the operation of those AWAs(45) and therefore may not represent an analysis of all relevant employment conditions.

– that figure represents less than 1 per cent of the AWAs approved at the time the report was released;

– the report refers to some agreements as “fixed price contracts for wages” but provides no information about the quantum of initial changes in rates of pay for the employees moving to those agreements, nor does it acknowledge the similarity of such arrangements to the “no extra claims” provisions which are found in almost 70 per cent of certified agreements; and

– the report identifies a focus on hours of work and flexible work arrangements in AWAs, but the Government notes that focus is not unique to AWAs and simply highlights the importance of such issues to employers and employees, continuing the trend that has been evident in certified agreements for some time and which is acknowledged in the report (in the March quarter 1997, around 82 per cent of certified agreements contained matters pertaining to hours or work).

Other matters

56. At paragraph 18 of its letter, the ACTU asserts that there is evidence that AWAs are being used to weaken or eliminate the role of trade unions and to reduce terms and conditions of employment. A similar assertion is made in paragraph 21 of the ACTU's letter. These assertions lack foundation. They are not supported by any analysis of AWAs that have been made and approved by the Employment Advocate.

57. The Government notes that the Office of the Employment Advocate is undertaking a research project on AWAs. The project will examine trends in AWAs and their content, and the experience of employers and employees in making and implementing them. It will include a number of case-studies in workplaces that have made AWAs, examining issues such as how the AWAs were developed, their content and effect, including on employees in a disadvantaged bargaining position, and participants' assessments of the process. A copy of the Employment Advocate's media release announcing the project is attached. Further information can be provided, if required, when the results of that research become available.

58. At paragraph 22 of its letter, the ACTU states that, because AWAs are not made public, it is difficult to obtain accurate information about their contents. The Government draws attention to section 83BS which provides that information about an AWA that would identify the parties to the AWA must not be disclosed by an ”AWA official“ (i.e. the Employment Advocate or official authorized by the Employment Advocate) except as permitted by subsection 83BS(2). Subsection (2) permits disclosure when, amongst other things, it is authorized in writing by the party or it is authorized by the regulations. In that regard, regulation 8D of the Workplace Relations Regulations authorize disclosure for the purpose of:

– providing analysis of trends in agreement making; or

– preparing reports on enterprise bargaining for the purposes of section 358A of the WR Act.

Subject to section 83BS, the Employment Advocate may publish or make available copies of, or extracts from, AWAs. It should also be noted that the prohibitions on disclosure do not apply to the parties to AWAs “ parties are free to disclose the content of their agreements as they wish.

59. Section 358A requires the preparation of biannual reports (except for the first report, which is to cover the period from the commencement of the legislation to 31 December 1997) to the Minister for Workplace Relations and Small Business about:

– developments in bargaining for the making of agreements under Parts VIB and VID of the Act; and

– in particular, the effects of such bargaining on the employment of women, part-time employees, persons from non-English-speaking backgrounds and young persons.

60. In addition to the statutory reporting requirements, the Office of the Employment Advocate has also published statistical information relating to AWAs.


61. The Australian Government considers that the ACTU's claim that the AWA provisions of the WR Act are incompatible with Article 4 of Convention No. 98 is without foundation. As emphasized in the foregoing comments, AWAs do not replace collective bargaining, but simply provide an alternative within the formal federal system for those parties who do not wish to bargain collectively. The WR Act continues to promote voluntary collective bargaining, and confers significant enforceable rights upon registered organizations and their members, including protection when bargaining collectively.

In addition a Government representative stated that the Government was most disappointed with the Committee of Experts' observation in relation to the application of the Convention. It was concerned about both the process and the conclusions reached, and its concerns were now compounded by the requirement to appear before the Conference Committee. The circumstances in which it was called to appear were a matter of serious concern because the Government had met the reporting requirements and the Committee of Experts had yet to complete its consideration of the material submitted by the Government. The Government expressed the hope that this would not become an entrenched practice of the Conference Committee. He pointed out that Australia was a federation comprising various States and territories with their own legislative systems. The Committee of Experts' observation related not only to the Commonwealth legislation, that is, the legislation passed by the national Parliament, but also to the industrial relations legislation in several Australian States, namely Queensland, New South Wales, South Australia and Western Australia. He pointed out that the observation had been referred to the relevant state governments for their comment. Proposed legislation in Western Australia had also been the subject of correspondence between the Australian Council of Trade Unions (ACTU) and the Office. The Western Australian Government submitted the following statement: “On 13 June 1997, the International Labour Office provided a direct response to the ACTU on its request for comments on the Western Australian Labour Relations Legislation Amendment Bill, 1997. The advice was provided without the benefit of input from the Western Australian Government on the specific legislative provisions. The Western Australian Government has serious concerns as to the appropriateness as to the ILO providing such direct comments and considers comments should only be made as part of the normal reporting process.”

The Government representative emphasized that his Government was committed to meeting its obligations as an ILO Member. This was achieved through consultation with state and territory governments and the main representative bodies of employers and workers. The Government was concerned that this practice could not be properly implemented where there was a premature and necessarily incomplete examination of the observation. The Government disagreed with the Committee of Experts' comments. It noted that, in examining the Government's report, the Committee had had before it comments of the ACTU, but the Government considered those comments to be without foundation, and it had responded to them in a submission to the Committee of Experts which supplemented the information already given in the usual article 22 report form. However, the Committee of Experts had dealt with the report without taking into account the Government's supplementary submission, as was specifically acknowledged in the observation. The Government's supplementary written comments had now been circulated for the information of this Committee. The speaker emphasized that this document had been prepared in response to the ACTU's comments and was intended to be read by the Committee of Experts in conjunction with Australia's report on the application of the Convention. It was not Australia's response to the Committee of Experts' comments.

The Government representative pointed out that the Commonwealth legislation was new and complex, requiring careful and detailed consideration. The provisions addressed in the observation should be examined in their proper context. This would necessitate a careful analysis of the relationship between the various provisions of the Commonwealth legislation, the application of legislation by the Australian courts and tribunals, as well as the relationship with relevant state legislation and the common law. The Government intended to provide the Committee of Experts with further information to assist it to undertake this analysis. The many important changes that the legislation had made to strengthen freedom of association and collective bargaining included the fact that it was now easier for new workers' organizations to become registered and to gain the benefits of registration under federal law. Registration was voluntary and was not a precondition to the formation or operation of a workers' organization. For those organizations wishing to register, the requirements were easier to satisfy than those of the previous Act. It was also easier for registered organizations to alter their rules relating to eligibility for membership. In addition, the legislation utilized a wider range of constitutional powers than the previous Act. In doing so, it broadened the scope of the freedom of association provisions so that employees were now protected in a wider range of circumstances than had been the case under the previous Act. The new provisions were easier to enforce because civil rather than criminal standards of proof now applied. They also provided for more effective remedies than those previously available, including higher penalties, injunctions, compensation and reinstatement. Specific provision was made to prohibit an employer from dismissing or engaging in other prejudicial conduct against an employee because the employee had engaged in protected industrial action. These provisions appeared to have been overlooked by the Committee of Experts in its examination of the legislation.

The use of a wider range of constitutional powers also made it easier for unions registered under the Act to enter into collective agreements with employers. Previously a collective agreement made by a union could be certified under the Act only in settlement of an industrial dispute. This involved complex legal rules. The legislation also strengthened the powers of the independent Australian Industrial Relations Commission (AIRC) to assist parties to bargaining who were unable to reach agreement. Parties were able to ask the AIRC to conduct hearings and make recommendations, binding on the parties, about particular issues to facilitate bargaining. Like the previous Act, the new legislation gave special encouragement to the making of agreements at the workplace or enterprise level. Certain other arrangements applied to the certification of agreements to which several employers were parties. However, the requirements to be met were not onerous: the AIRC simply had to be satisfied that it was in the public interest to certify such an agreement. Experience with the operation of the Act demonstrated that applications for those agreements had been readily granted in appropriate circumstances. It was also relevant that parties were free to bargain outside the formal system. The Commonwealth legislation, for the first time, expressly recognized the capacity of parties to bargain outside as well as within the formal system.

He pointed out that the legislation put in place a formal scheme for making individual agreements called “Australian workplace agreements”. This scheme was a matter of some concern to the Committee of Experts, but those concerns appeared to have been based on a misunderstanding of the legislation. The written reply submitted by the Government in response to the ACTU's comments explained the arrangements for individual agreements in some detail. The Government was confident that, viewed in their proper context, these arrangements would not be seen to detract from the provisions of the Act that promoted and encouraged collective bargaining. Individual agreements did not replace collective bargaining, but simply provided a new alternative within the formal system for those who did not wish to bargain collectively. He stressed that almost 2 million employees were covered by collective agreements certified under the Act. There were also significant numbers of employees covered by other forms of collective instruments, such as agreements under state legislation, agreements made outside the formal system and awards, which were collective instruments made by independent industrial tribunals by consent or by arbitration. Since the provisions for Australian workplace agreements had taken effect, 17,500 employees had chosen to make such agreements. The Act prohibited duress in making them. Every Australian workplace agreement made under the Act was underpinned by an award, itself a collective instrument. Awards bound employers and unions. An Australian workplace agreement was not permitted to disadvantage an employee when compared with wages and working conditions in relevant awards. Another significant feature of the scheme was the nature of the relationship between Australian workplace agreements and collective agreements certified under the Act, a relationship that was not recognized by the Committee of Experts. The Act provided that when a collective agreement had been certified and was in operation, it prevailed over an inconsistent Australian workplace agreement which took effect during that period. An Australian workplace agreement could prevail only if the certified collective agreement expressly permitted this. If an Australian workplace agreement was in operation before a certified collective agreement took effect, the latter prevailed when the Australian workplace agreement had passed its specified expiry date. The Act also provided that once an Australian workplace agreement passed its specified expiry date, it could be terminated on application to the AIRC. Any certified agreement applicable to the employee would then operate.

The Government looked forward to the Committee of Experts' reconsideration of the legislation. However, the Government considered it inappropriate and premature that it should be required to appear before the Conference Committee before the Committee of Experts had been able to give the legislation the detailed consideration which was required. Moreover, although the Government regarded the matters raised as important, it submitted that, when viewed objectively, they were not of such seriousness as to warrant urgent consideration in this forum. It intended to respond to the Committee of Experts' observation in accordance with normal procedures in its next report on the Convention. Noting that the Committee of Experts had stated that the impact of the legislation would not be fully clear for several years and that it would welcome regular reports on future developments, the Government undertook to provide these reports in accordance with its normal constitutional obligations. It was confident that the practical operation of the legislation would demonstrate that it was fair and balanced, and that the ACTU's apprehensions about its operation were without foundation.

The Workers' members thanked the Government representative for the information as well as the written document provided. It was important that the Committee of Experts had been able to draft its observation on the basis of the report received from the Government and especially on the basis of the legislation. The Committee of Experts had also received comments from the ACTU and the Australian Chamber of Commerce and Industry. It had thus been able to analyse the case using different sources of information. That was an important point for the discussions in the present Committee. In other cases, the Conference Committee was at times obliged to base its discussion and its conclusions on more fragmented sources of information. The Workers' members were therefore surprised that the Government complained that this case was being examined in the present Committee since the Committee of Experts had taken account of the Government's report. In the written information supplied, the Government only reacted to the ACTU's comments submitted on 6 August 1997, and which had been transmitted to the Government on 27 August 1997. Apparently the Government had not replied within a reasonable time, because the Committee of Experts had received it too late — probably during the Committee of Experts' meeting in December — to be considered. The Workers' members deeply deplored this negligence on the part of the Government. The replies given in the written document submitted were complex and long, and the Workers' members, while awaiting a fresh examination by the Committee of Experts, limited themselves to four comments. First, the Government appeared to have forgotten that the Committee of Experts raised many issues in its report. The Government did not reply to the questions put concerning specific points in the legislation. Second, the Committee of Experts had noted that the legislation contained shortcomings, particularly in relation to the scope of persons protected against anti-union discrimination. The report did not supply additional information on these points. Third, the reply was limited to a very theoretical overview of the operation and practical effects of the legislation. What was, for example, the percentage of workers who used a negotiating agent to assist the worker or workers during negotiation of a workplace agreement? Was not the new legislation having the effect in practice that employers were seeking an alternative to collective bargaining, even in the enterprises where trade unions had been established for a long time, instead of simply complementing the collective bargaining system? The media and the international community had been able to follow the dispute at Patrick Stevedores. The Federal Court and the High Court had confirmed that the company in question had tried to use individual workplace agreements in combination with other instruments to avoid collective bargaining. Fourth, the Workers' members were uneasy with the tone and the approach of the reply. It appeared that instead of looking for dialogue and collaboration with the supervisory bodies and the social partners, the Government was bent on controversy with the unions and wanted to win no matter what.

The Committee of Experts had analysed the new legislation. The Acts were available to everyone and were sources of objective information. Nobody could doubt that. The Committee of Experts was comprised of eminent and highly qualified lawyers, and its working methods were based on the principles of impartiality, neutrality and objectivity. In this regard, they referred to paragraph 8 of the Committee of Experts' general report. The Committee of Experts observed that the Workplace Relations Act was long and complicated; they doubted whether the workers and employers involved knew of the Act, its machinery and its balances.

The Committee of Experts noted at the outset that the Act excluded from its scope major categories of workers concerning adequate protection against acts of anti-union discrimination. This was particularly the case for workers in small and medium-sized enterprises and for employees whose remuneration passed a certain threshold and for fixed-term workers. Such exclusions were not foreseen in Article 6 of the Convention. Moreover, according to the Act, protection against anti-union discrimination was only partial in the case of bargaining on multiple-business agreements. Such a distinction was not foreseen in the Convention. The Act sought indirectly to discourage multiple-business collective agreements. On these two points, the Committee of Experts asked the Government to take the necessary measures and this Committee ought to repeat these requests.

The Workers' members requested that their concerns appear in the conclusions. The new system, even taking into account the Government's explanations, favoured generally the conclusion of individual work contracts and weakened the bargaining of collective agreements even in enterprises where trade unions had had a long presence. The Workers' members had received information that, in practice, the system was eroding collective bargaining and was not of a complementary nature as suggested by the Government. Intervening in a specific case (Pacific Access v. Community and Public Sector Union), the Minister of Industrial Relations had specifically stated that the new Act permitted an employer to choose whether to accept collective bargaining and to choose with which union to bargain. And yet, in practice, new and young workers had the choice between an individual agreement or unemployment. The Committee of Experts observed that the AIRC could determine the level of bargaining and that it favoured enterprise-level bargaining. However, the General Survey on Freedom of Association and Collective Bargaining of 1994 had confirmed that it was for the parties to decide the level of bargaining. The parties should also be free to decide on the scope of the issues to be negotiated. This Committee as a whole had agreed with this point of view. On this point too, the Committee of Experts rightly asked the Government to indicate in its report all the measures taken to change the legislation so as to ensure the promotion of collective bargaining in conformity with Article 4 of the Convention. In addition, the Committee of Experts requested changes in the legislation and initiatives from the Government in this direction. The Workers' members asked that these points be taken into account in the conclusions of the present Committee. The Government should also supply detailed information, including statistics, on the practical effects of the new legislation as a whole, at the level of the states as well. This information should enable the Committee of Experts to observe how in practice and to what extent the new legislation favoured collective bargaining and the development of fair industrial relations.

The Employers' members noted that the case concerned extensive legislative changes at the federal and state levels. Australian trade unions considered that the new legislation, in particular the Workplace Relations Act, 1996, had considerably altered the legislative foundation of industrial relations at the federal level. The Committee of Experts' observation, however, was grounded only on trade union allegations. In contrast, the Government had had no opportunity to express its opinion on the matter which was, in the Employers' members' view, a violation of the principle that all parties involved should be heard before final conclusions could be drawn. The Employers' members thought that this case embodied various interesting problems, but that the main problem consisted in the Australian workplace agreements which had been introduced by the Workplace Relations Act. According to the Committee of Experts, one of the Act's principal objectives, set out in section 3(b), was to ensure that primary responsibility for determining matters affecting the relationship between employers and workers rested with the employer and worker at workplace or enterprise level. The Employers' members, however, noting the following subsection of the same section 3, emphasized that any clear preference for workplace or enterprise-level bargaining, as seemed to be evidenced in section 3(b), was not in fact there. They pointed out that in assessing whether the Australian legislation was not in compliance with the Convention, the pertinent Article 4 of the Convention should be read attentively. Since it provided for appropriate measures to encourage and promote the full development and utilization of machinery for voluntary negotiations between employers' and workers' organizations, it consequently could be applied through all sorts of collective agreements. In addition, Article 4 called for measures appropriate to national conditions. The Employers' members were of the opinion that the matter needed to be clarified before a final conclusion could be drawn. This Committee should follow its own working methods, namely not to evaluate the matter before the Committee of Experts had examined all information available on the case. In this respect they recalled that the Government had supplied some information to this Committee in a document. They also wondered why, when the Committee of Experts acknowledged that the impact of the legislation would not be fully clear for several years, it already went ahead with proposing amendments to the new legislation. The Employers' members emphasized that the observation of the Committee of Experts was based only on the allegation of Australian trade unions and that, accordingly, an opportunity should be given to the Government to supply detailed information on the matter. This should be reflected in this Committee's conclusions.

The Worker member of Australia stated that it was regrettable that the Australian workers had to appear before this Committee to complain against the legislation and actions of their Government. Australian governments of varying political persuasions had traditionally respected the ILO and its standards; today, however, he could no longer make such proud assertions about the present Government. He considered that the enactment of the Workplace Relations Act in 1996 and the subsequent implementation of its provisions contravened the Convention. He explained that on 6 August 1997, the ACTU had written to the ILO bringing a number of provisions of the Act to the notice of the Committee of Experts. At its November-December 1997 session, the Committee of Experts had made a number of comments about the legislation, including that the provisions did not promote collective bargaining as required under Article 4 of the Convention. Immediately this finding was known in the country, the Minister for Industrial Relations publicly described the Committee of Experts' decision as being incorrect and gratuitous, but did not give any supporting evidence or reasoning to substantiate his views. The legislation breached the Convention in four main ways: Australian workplace agreements wholly displaced pre-existing collective instruments which had traditionally been of legal force (known as “awards”) and also displaced pre-existing enterprise-specific collective agreements (known as “certified agreements”) in certain circumstances; unions only had a limited role in the negotiation of individual work agreements and there was no public scrutiny of such agreements; there was no requirement that employers bargain collectively, even when that was the wish of the employee; and an employer could require an employee to sign an Australian workplace agreement as a condition for commencing employment and for obtaining job promotion. Indeed, the May 1997 speech of the Minister of Industrial Relations had made it clear that the Government supported strategic decision-making between collective and individual agreements. Even at the time of the adoption of the Act, a senate inquiry had indicated that the proposed legislation did not encourage and promote collective bargaining and therefore was not in compliance with the Convention. In disregarding the Senate's view, the Government had followed the approach taken in New Zealand's Employment Contracts Act. He highlighted three sectors where the signing of Australian workplace agreements had become mandatory for employees to keep or gain employment: in the government agency Employment National; in the giant mining company Rio Tinto; and during the nationwide maritime dispute at Patrick Stevedores.

The Employer member of Australia observed that, although the Committee of Experts commented on a variety of matters, the real substance of its concerns related to the alleged preference given by the federal Workplace Relations Act, 1996, to individual agreements over collective agreements and collective bargaining rights. On this issue he supported the statement of the Government representative and of the Employers' members. The new stream of agreements, known as Australian workplace agreements, coexisted with two other traditional instruments of the Australian industrial relations system, namely industry-based awards made by the AIRC as a result of collective processes, and certified agreements which were collective agreements applicable to one or more establishments. He considered that the Committee of Experts' observation was misconceived and that the provisions of the Act were in conformity with the requirements of the Convention. The Experts might have come to that conclusion themselves had they had the benefit of perusing the written information submitted. He stressed that Australian workplace agreements could also be the outcome of collective bargaining, particularly in small and medium enterprises. The Act deliberately provided for current certified agreements to prevail over them unless the certified agreement provided to the contrary. Federal awards, which were collective, industry-based instruments of general application, laying down minimum wages and conditions, also prevailed over workplace agreements unless the AIRC decided that it was in the public interest for the workplace agreement to prevail. There was also a very strict and extensive test against which they had to be assessed before they could be approved to operate: the “no disadvantage” test meant that if an Australian workplace agreement, when compared to a relevant award, was found to provide for a reduction in the general terms and conditions of employment as set out in the award, that agreement would not be approved until the parties either amended it or gave undertakings to remove the disadvantage. He stated that unions had an important role to play in relation to certified collective agreements and workplace agreements where they had members and where those members authorized them to act. While there was no obligation to bargain, unions and employees did have the right to initiate formal bargaining periods and to seek collective or individual agreements as they wished. Individual bargaining might now be permitted by the 1996 Act, but it was clearly not promoted in the legislation to the same extent as collective bargaining was. He emphasized that a system that allowed for individual agreements could not be said, for that reason alone, to be in conflict with the provisions of the Convention, particularly when they could themselves also be instruments giving effect to a collective bargaining outcome. Balance, in the context of the whole industrial relations system, was the critical issue. He asked that the Committee's conclusions reflect these points.

The Worker member of New Zealand stated that the Committee of Experts was unequivocal that the Workplace Relations Act and related legislation gave preference to individual agreements over collective agreements and that the Act and its interrelation with the Industrial Relations Act did not create a system whereby collective bargaining was effectively promoted. The Government was in breach of its obligations under the Convention. In its written response to this Committee, the Government had used comparisons with the New Zealand Employment Contracts Act to refute claims that its industrial relations legislation violated the Convention. She agreed, however, with the Australian Government up to a point: the New Zealand Act was undoubtedly in total breach of the Convention and of the fundamental principles to which all Members of the ILO subscribed by virtue of their membership of the Organization. The Australian industrial relations regime — as did that of New Zealand — gave preference to individual contracts over collective contracts. The intention of the Australian legislation — as that of the New Zealand Act — was to promote single enterprise and workplace agreements over multi-employer awards. There was also a parallel with New Zealand concerning the issue of “protected action” in cases of strikes and other industrial action, which only applied in negotiations towards a single business certified agreement. But the Australian scheme went beyond New Zealand in one area: workers and employers could not determine by mutual agreement that they would negotiate and sign a multi-employer agreement, as it was only the AIRC that could so determine. She added that, according to the Government's written information, paid rates awards (awards setting out actual as opposed to minimum terms and conditions of employment) were no longer permitted, and that too went well beyond the New Zealand legislation which theoretically allowed any form of agreement. The claim that there was a safety net through the underpinning awards and the “no disadvantage” test was naive at best and certainly misleading. National, multi-employer and industry-wide collective agreements or awards rapidly lost their relevance as employers opted out of them and refused to participate in their renewal. Neither the Australian nor the New Zealand legislation placed any requirement on the employer to negotiate a collective agreement even where every employee to be covered had voted for a collective contract. Both the Australian and New Zealand legislation shifted the balance of power in the workplace to the employer. She could not agree with the proposal of the Employers' members to await the Committee of Experts' further examination of the Government's latest information because measures should be taken before the damage was done; the New Zealand experience demonstrated that action had to be taken swiftly.

The Employer member of the United States stated that this case had several features affecting the credibility of the standards supervisory process. First, the report of the Committee of Experts had been supplemented by a written document from the Government offering sound and credible information, which had to be considered carefully by the Experts. Second, the Experts' conclusion that the 1996 Act did not promote collective bargaining was premature and one-sided. He could vouch that, as demonstrated in the written document and by experience of American companies having affiliates in the country, Australia had for a long time actively encouraged, supported and enforced the right to organize and bargain collectively. Third, Conventions Nos. 87 and 98 were closely linked and employees should be able to choose freely and, as stated in Article 4 of the Convention, bargain voluntary agreements. Fourth, it was clearly established within the ILO that employees also had the right to choose not to associate and not to be represented by unions. The Australian legislation appeared to recognize this right while still encouraging and promoting collective bargaining, but the Committee of Experts ignored this point. He recalled that, in 1982 during tripartite discussions of the Termination of Employment Convention, it had been stated that Convention No. 87 contemplated freedom not to be represented; the Committee of Experts needed to consider that point in this case. Fifth, the Australian legislation recognized the evolving diversity of work relationships. The focus on workplace and enterprise-level bargaining was a successful emerging approach in many countries. It was important to note that the emphasis on workplace bargaining could result in an increase in productivity and improve the living standards of workers. Basic, in this case, is the paramount principle of employee free choice, whether it is for workplace level collective bargaining or for individual self-representation. Both approaches are effective. The Committee of Experts therefore needed to consider carefully the written information provided by the Government, failing which its conclusions were premature and one-sided and weakened the credibility of the supervisory system.

The Worker member of Japan expressed his strong resentment at the Workplace Relations Act and at attempts at trade union busting. The Government had defended the legislation, arguing freedom of choice and a fair balance, but the Act undermined equality and real freedom. Respect for genuine labour relations and trade union rights was the vital issue. Recalling the historical background of the right to bargain collectively and freedom of association, he considered that it was important to review the situation. He did not agree with the Government's statement that the situation did not warrant urgent consideration in this forum. It was precisely because of the urgency of the situation that the Experts had asked for a review and amendment of the Act. Regarding the Government's reference to the Committee of Experts' statement that the impact of the legislation would not be fully clear for several years, he wondered why this Committee should wait and for how many years. The Committee should not remain complacent. The Committee of Experts had made a careful analysis of the legislation and he urged the Government to recognize this. Noting that globalization also affected labour-relations systems, he pointed to the importance of Australia in the Asia-Pacific region and warned that if the situation was not dealt with, it could spread throughout that region. He called on the Government to acknowledge that a problem existed and to take steps immediately to review the Workplace Relations Act.

The Employer member of South Africa had listened with great interest but also with disquiet to the discussion of this case, which was a significant one for the country and for collective bargaining in numerous industrialized countries. He warned, however, that if this Committee arrived at inappropriate conclusions, that bode badly for its role as a custodian of international labour standards and for the process for their supervision. The Employers' members had already stated that they were puzzled by the findings in the report of the Committee of Experts; it was perhaps because the Experts had not considered all the elements. The Government's written document was closely argued and the observation of the Committee of Experts referred to specific provisions of the Act in isolation. For example, the Experts mentioned section 3(c) but not section 3(b) or (e), which also were relevant to the aim of the legislation. Similarly, they referred to section 88A(d) of the Act, but failed to mention subsection (b). As regarded the level of bargaining, the approach of the Committee of Experts could have unintended consequences for other countries, including his own. He insisted that all the parties needed to be heard and their arguments properly considered, although the Committee of Experts did not appear to have done so. For countries not having ratified the Convention, the approach of the present Committee was helpful. The way it was seen to arrive at its conclusions was important, so there should be no decision here until the Committee of Experts had received further information from the Government and the social partners. Until then it was premature to treat the case.

The Government representative noted that the Employers' members had endorsed the points he had made earlier. He added that the Government had not been negligent regarding its reporting obligations; its written document had been provided to the Committee of Experts to enable them to understand the law better and constituted a response to the ACTU; since the waterfront dispute mentioned by two speakers was currently before the courts he could make no comment on it; the Australian workplace agreements did not replace collective bargaining. The Act encouraged collective bargaining and free choice. His Government would provide more detailed information so that the Committee of Experts would fully understand that it was complying with the Convention.

The Workers' members noted that the intervention by the Employers' members had referred more to procedures than to substance. Regarding the plea to hear all sides in this case, they pointed out that the Committee of Experts had done just that, basing its comments on information from the ACTU and the Australian Chamber of Commerce and Industry. It had been in possession of the text and had analysed it thoroughly in paragraphs 1, 2, 3 and 4 of the observation. Regarding its statement in paragraph 10 that the impact of the legislation would not be fully clear for several years, this could be said of many other pieces of legislation as well. They stressed that the process adopted in this case was identical to that used in other cases, namely written information was noted and transferred to the Committee of Experts for analysis and further information requested to clarify the situation. The fact that there was both written and oral information had never prevented this Committee from drawing conclusions.

The Employers' members emphasized that in this Committee the views were completely different, not only in respect of certain aspects, but all essential questions on the case. They pointed out that the Committee of Experts had not observed the principle of hearing all parties involved. This fact, however, had no influence on the content of the questions which had been discussed and evaluated differently in this Committee. Since it was not possible to vote upon the conclusions, the fact that contrary views were held should be reflected in the conclusions. It would not be correct to state in the conclusions that this Committee was of the opinion that the Convention had been violated by the legislation. The only conclusion which could be drawn was that this case was a very important one, that this Committee's views were completely different as regards its evaluation, and that additional information should be provided by the Government.

The Committee noted the written information communicated by the Government and the statement made by the Government representative, as well as the discussion which took place in the Committee. The Committee took due note of the observation of the Committee of Experts in which it pointed out that several provisions of the 1996 Federal Workplace Relations Act called into question the application of Articles 1 and 4 of the Convention by excluding certain categories of workers from the scope of the legislation and limiting the scope of trade union activities covered by the provisions concerning anti-union discrimination, as well as giving primacy to individual contracts over collective relations through the Australian workplace agreements procedure. The Committee of Experts further recalled that certain state legislation similarly called into question the application of the Convention. The Committee expressed the hope that the Government would supply a detailed report to the Committee of Experts on the questions put in its observation. If necessary, the Committee would pay attention to this case next year.

Brazil (ratification: 1952). A Government representative of Brazil said that his country attached great importance to the work of the Committee, as illustrated by the support that it gave at the international level for the ILO, which it considered to be the appropriate forum for labour issues. Brazil had also provided one of the highest numbers of reports to the Committee of Experts and had not failed to reply to any of its observations. Even so, and perhaps for that reason, it had often been called upon to provide additional information to the Conference Committee on the observation made by the Committee of Experts. With regard to the communication from the Sindicato dos Arrumadores de São Sebastião in June 1997, he stated that information had been provided to the Committee in the context of the application of Convention No. 137, in relation to which the Committee of Experts had stated that it would examine the information provided at its 1998 Session due to the large number of documents which it had received. Without the comments of the Committee of Experts on this question, discussion of this matter would be prejudiced. Nevertheless, he stated that the Ministry of Labour had established a mobile mediation unit for the maritime and port sectors which would help improve industrial relations in those sectors. With regard to Article 4 of the Convention, he stated that section 623 of the “Consolidation of Labour Laws” (CLT) was not an obstacle to free negotiation, since Interim Provision No. 1540 of June 1997 clearly covered collective bargaining until a constitutional reform was undertaken, which would require a long time, many consultations and a long legislative process. Meanwhile, the Government had started to promote a serious labour reform based on the expansion of areas of negotiation and the strengthening of trade union organizations, with the objective of making it possible to ratify Convention No. 87. The Government representative stated that the key points of this reform included the reaffirmation of the role of tripartism in the formulation of labour policy, even though trade unions and sectoral unions participated fully in the various councils and committees, and particularly in the council which administered the most important social fund in the country. Another key point in the reform was the expansion of the scope of negotiations, with the transfer to direct negotiations between employers and workers of a number of rights and duties which were regulated automatically by law, including wages, working time and participation in the profits and results of the enterprise, in accordance with the Convention. Further elements of the reform included the abolition of rules respecting trade union monopoly, territorial restrictions and compulsory contributions with a view to strengthening the legitimacy of trade unions, within the spirit of Convention No. 87, and a reduction in the power of labour tribunals to prevent their legal intervention before negotiation procedures had been exhausted, in accordance with a recommendation by the Committee of Experts and the Committee on Freedom of Association. Convention No. 98, as well as Convention No. 87 to a certain extent, were currently central to the Government's preoccupations with the objective of strengthening trade union organizations. In any event, the programme for the modernization of industrial relations subjected all decisions on new forms of contracts to the presence and authorization of trade unions.

With regard to Articles 4 and 6 of the Convention, he recalled the information provided to the Committee of Experts, which understood that the country was undergoing a far-reaching reform programme and that it would be necessary to wait a while for the results. The Government was committed to transforming the State to make it more efficient and responsive to the needs of its citizens. It was seeking greater flexibility in relation to public employees and opening up the opportunity to adopt different systems for the functions and careers which were not typical for the State, which could in turn facilitate the adoption of more modern practices of administration and co-administration.

He said that the Government had proposed a substantial series of reforms to consolidate the economic stabilization plan, to which reference was made in the observation, which had given positive results that had benefited workers. These measures had been adopted within the framework of respect for democratic principles, which required debate, negotiation and a full legislative process, as well as in a context of international financial instability, which had made it impossible to progress more rapidly and with fewer social costs.

The Workers' members thanked the Government representative for the explanations provided and recalled that the Committee of Experts had been commenting on the case for many years. It had last been examined by the Conference Committee in 1991. Despite the detailed report to which the Government representative referred, it had to be noted that the Committee of Experts had once again needed to return to several difficulties in the application of the Convention bearing on very important problems of principle which had a serious impact on the collective bargaining system. Intervention by the authorities in collective bargaining and the determination of wages and conditions of employment, whether in the para-public sector or the private sector, appeared to be a structural feature of the Brazilian system of industrial relations. In effect, the problem was not limited only to a few transitional or isolated provisions, but involved a series of processes and practices which had their origin in the labour codes of dictatorial regimes inspired by Mussolini's Labour Code. The Committee on Freedom of Association had also dealt with several cases which illustrated the inadequacy of the collective industrial relations system, including Cases Nos. 1866 and 1889. It was evident that, as the 21st century approached, such legislation was not compatible with the existence of a modern industrial relations system and social rules adapted to economic globalization. Despite the changes adopted to the legislation and machinery, the authorities retained their fundamental capacity to intervene in the broadest sense of the term in negotiations and the implementation of collective agreements.

During its discussion of this case in 1991, the Conference Committee had indicated its grave concern at the continued application of section 623 of the “Consolidation of Labour Laws”, which gave the authorities broad powers to annul collective agreements or arbitration rulings which were not in accordance with the Government's wage policy. The Committee of Experts had been obliged to return to the matter once again this year and to call for the formal repeal of a provision, which the Government stated had not been applied in recent years. The Workers' members agreed that this provision should be repealed formally. Section 623 had already been amended or supplemented, but the public authorities in the broad sense of the term had other means available to them to intervene in the collective bargaining process, particularly through specific labour tribunals. In 1991, the Government representative had stated that an employer could have recourse to the labour tribunals to seek to annul or amend collective agreements. The Workers' members considered that the tripartite composition of the tribunals did not provide sufficient guarantees against interventions in the negotiation process and its results. Everything depended on the functions and objectives assigned to these tribunals and their operation in practice. They sometimes appeared in various ways to be an instrument of state interference in collective bargaining. Furthermore, the succession of temporary economic stabilization plans which had been adopted in recent years also established possibilities for direct or indirect intervention in collective agreements.

In its conclusions in 1991, the Conference Committee had emphasized that it was aware of the seriousness of the economic and financial situation in the country, but had recalled that any economic stabilization policy had to be the product of dialogue, not constraint. The Committee of Experts had also rightly reminded the Government once again of the need to take measures to promote the development of a complete collective bargaining procedure for the determination of the conditions of employment of public officials not engaged in the administration of the State.

For many years, the Government's reports and statements had referred to various projects for the amendment of the legislation. In 1995, a labour legislation commission had been established under the Ministry of Labour to examine priority draft legislation. The Government representative had once again reported several draft texts on collective bargaining and had said that they had reached various procedural stages. It was necessary for the Government to provide information on the progress of these draft texts and to transmit a copy of the laws that were adopted, as requested by the Committee of Experts. A country that was as important as Brazil should have the required competence in the formulation of laws and the measures necessary to adapt and modernize its industrial relations system in accordance with the recommendations of the supervisory bodies. Evidently, it could call for ILO technical cooperation for this purpose, but only if it had the true political will to make real changes in the law as a whole. The Workers' members were bound to insist that the industrial relations system be brought into conformity with international labour standards and that the traces of an authoritarian conception of industrial relations inherited from dictatorial regimes be eliminated from the labour legislation.

The Employers' members also recalled that the Conference Committee had last examined the application of the Convention by Brazil at the beginning of the decade. Since then, the Committee had examined other problems related to the application of Conventions by Brazil. The promotion of voluntary collective bargaining processes was the central objective of the Convention under discussion. Such processes should be developed and applied as much as possible by the countries concerned. In general, the legislation in Brazil appeared to provide the necessary legal basis. However, the relevant provisions were contained in a very complex network of cross-references between various texts, with the added complexity of the requirement to observe wage indices agreed on by the social partners or, if they could not agree on such indices, those formulated by the State. In addition, section 623 of the “Consolidation of Labour Laws” entitled the authorities to nullify collective agreements which did not comply with government wage and economic policies. The basis of the criticism levelled against the Government was that this power ran counter to the objective of the Convention, namely the promotion of voluntary collective bargaining, by allowing considerable room for government interference. In the past, the Government had stated that this provision was only “virtual”, whatever that might mean in legal terms, and had not been applied in recent years. The Employers' members agreed with the response of the Committee of Experts, which had been that if the provision were “virtual” it could be repealed so as to ensure that collective bargaining was not hampered. The Government representative had not added many new elements. It was clear that the country was undergoing a fundamental process of reform, although it was not evident which direction the reform would take or what its results might be. The Employers' members called for the reforms that were being adopted to proceed in the desired direction.

The second point raised by the Committee of Experts concerned the need for the Government to take measures to promote voluntary negotiation by public servants not engaged in the administration of the State. The Committee of Experts had noted the Government's indication that the Supreme Federal Court had declared unconstitutional the section of Act No. 8112 of 1990 which granted public servants this right. In its reports, the Government had referred to the administrative reform that was being carried out and the measures that were now before Congress.

On both of the above issues, the Government should be requested to report on the progress achieved. The Employers' members pointed out that the issues, particularly with regard to wage negotiation, were not isolated and could not be resolved independently of other economic questions. Total freedom of collective bargaining did not exist anywhere. The State could always intervene in various ways, for example indirectly through financial and fiscal policy, which could not be construed as being interference in the collective bargaining process. However, it was important for the basic trend to be towards greater opportunities for free collective bargaining, rather than greater limitations on it. The Government should therefore review the obstacles to collective bargaining and examine whether state interference was necessary, or whether the objectives of the Government could be achieved in other ways. The Government should be requested to provide a detailed report on the measures that were being taken so that the Conference Committee could examine the matter once again in the near future in the light of the new information provided.

The Worker member of Brazil congratulated the Committee of Experts for its treatment of this case, which reflected the most important aspects. Brazil, according to the speaker, had not applied the Convention since the time of its ratification 46 years ago. Several facts had to be understood in order to understand the case fully. First, the country had undergone five economic structural adjustment programmes within the past 12 years. Most of them had resulted in interference with collective agreements, changed negotiated working conditions, and upset negotiated wage increases. Under these programmes, an economic agenda had taken precedence over the obligation to observe Convention No. 98. Second, while it was true that section 623 of the “Consolidation of Labour Laws” had not been applied by the Government in recent years, labour courts continued to apply it. There were also no guarantees that the Government itself would not resume applying it. It was therefore incorrect to say that section 623 was only a “virtual” law. Third, it was important to recall that public servants continued to be excluded from the right to collective bargaining. The Supreme Federal Court had found that such a right was unconstitutional and it was clear that the purely administrative reforms suggested by the Government would provide no solution to the problem. Fourth, labour courts were given special powers by the Constitution. They were engaged in the compulsory settlement of collective disputes and sometimes used legal procedures which did not follow legal due process. Stressing the Government's failure to apply the fundamental standards of the ILO and the recommendations formulated by its supervisory bodies in respect of the Convention, he asked the Committee to recommend once again that the Government make the necessary changes so as to apply fully freedom of association and voluntary collective bargaining.

The Worker member of the United States commended Brazil for having ratified, along with 136 other member States the Convention and for its intention, at least at the date of ratification in 1952, to bring its labour law into conformity with the principles of freedom of association and genuine collective bargaining. He supported the Committee of Experts' recommendations concerning this case, in particular that public servants not engaged in the administration of the State should be given full collective bargaining rights. The Supreme Federal Courts' 1994 decision denying these rights was in direct contravention of the Convention and the National Congress should be pressed by the Government to pass the necessary laws to ensure compliance with the Convention. It appeared that there had been no collective bargaining between public servants and the Government for the last three years. The speaker observed that the Committee of Experts' comments dealt with the issue of whether section 10 of Interim Provision No. 1079, which provided for free collective bargaining over wages and other conditions of employment, would not be pre-empted by the provisions of the ”Real Plan“, the Economic Stabilization Plan adopted in 1994, and whether section 623 of the “Consolidation of Labour Laws” had been suspended. According to section 623, the authorities had extensive powers to cancel collective agreements or arbitration awards which were not consistent with the rules set by the Government's wages policy. In fact, the text referred to any provision which “directly or indirectly” conflicted with the entire economic/financial policy of the Government. This was so broad that it could be invoked to invalidate a collective bargaining agreement which included new and improved conditions for workers. Section 623 effectively invalidated free collective bargaining. Reference by the Government to section 623 as merely “virtual” was interesting in so far as it would make common sense to repeal the law if it did not, in fact, exist in the first place. The Government should, therefore, take steps rapidly to repeal section 623.

The Worker member of Argentina noted that, despite the information provided by the Government, the real situation was different. In practice, public servants had not been able to negotiate collectively since 1994, by decision of the Supreme Federal Court. This had resulted in the freezing of wages, which had not been adjusted since January. It was a cause of concern that collective bargaining could not be used as a means to freely determine conditions of work, since section 623 of the “Consolidation of Labour Laws” severely restricted free negotiation by binding it to the Government's economic and financial policy. The compulsive intervention of the courts in collective disputes prevented the free negotiation of wages and subjected them to government policy. The reforms proposed by the Government did not limit the power of the labour courts to intervene in disputes and therefore seriously weakened the freedom of negotiation guaranteed by the Convention. The Conference Committee needed to insist on the continuation of the reforms that were under examination in order to achieve the objective of unconditional and unlimited collective bargaining. The democratization of industrial relations in the countries of the Southern Cone of Latin America was essential for the integration of their markets. He therefore urged the Government to facilitate the implementation of the social dimension of MERCOSUR, which would benefit all workers in the region.

The Worker member of Uruguay said that the situation of the legislation on collective bargaining, and in particularly section 623 of the “Consolidation of Labour Laws”, was a cause of concern for all the workers in the countries of the region, since it was not in accordance with the agreement to coordinate labour legislation and respect core ILO Conventions. The ILO had provided technical assistance with the objective of achieving this coordination in labour matters. Economies could not be modernized if workers' basic rights, such as collective bargaining, were sacrificed. Collective bargaining was the most efficient method of regulating markets and it was unacceptable for economic restructuring to be achieved at the cost of the social dimension, as envisaged by section 623 of the CLT. Although the Government stated that it did not apply section 623, the provision was in fact given effect by the labour courts, which used it to restrict and undermine collective agreements. The situation was even worse for public employees, who did not enjoy the right to collective bargaining, as if they were second-class citizens.

The Government representative thanked the speakers for their contributions to the debate. He recognized the “profound knowledge” demonstrated by the Workers' members concerning the labour situation in Brazil, but deplored that they were out of date regarding the most recent changes in the world of work. The labour court, for example, was applying an internal instruction according to which unilateral measures in labour disputes would not be receivable until all necessary steps had been taken to achieve collective negotiation and conciliation. He had noted the comments and said that they would be examined carefully. When new measures were taken, the Committee would be duly informed. He recalled the information provided, including the progress made by the Government in modernizing the labour laws and denied the existence of any intervention in industrial relations, contrary to what some Worker members had stated.

The Committee noted the oral information communicated by the Government representative as well as the discussion which took place thereafter. The Committee observed with concern that despite the repeated and long-standing comments made by the Committee of Experts on the need to amend the legislation in order to promote free collective bargaining, no tangible progress had yet been made. It noted the Government's assurances that draft legislation was now in preparation in order to applyArticle 4 of the Convention. It recalled the importance it attached to the implementation of this fundamental Convention and urged the Government to provide a detailed report to be examined by the Committee of Experts in order to allow an evaluation of the extent to which real and substantial progress has been made in law and in practice. The Committee recalled that the International Labour Office was at the Government's disposal to provide the technical assistance which might be necessary in order to ensure that legislative obstacles to free collective bargaining in both private and public sectors covered by the Convention are removed.

The Government representative stated that it was exaggerated for the conclusions to state that tangible progress had not been made when there had been numerous examples of progress and significant measures adopted by the Government, such as the training of 1,700 mediators from the public and private sectors with the support of the ILO's International Training Centre in Turin.

He had noted the conclusions and would not take up more of the Committee's time.

Indonesia (ratification: 1957). A Government representative informed the Committee that, in the momentum and spirit of reform, the Government had taken several important steps to ensure full compliance with the Convention. These included the signature the previous week by the President of the Republic of a decree for the ratification of Convention No. 87, which would be followed by the drafting of a new Trade Union Bill. On 27 May 1998, the Minister of Manpower had issued a new Ministerial Regulation (No. 5 of 1998) which cancelled the previous Ministerial Regulation (No. 3 of 1993) on the registration of trade unions. The new Regulation permitted national and regional trade unions to seek registration at the company level at the relevant government office by tabling with the request the list of its executive officers, constitution and members. This new system had allowed the trade union known as Serikat Buruh Sejahtera Indonesia (SBSI) to be recognized at last as an independent trade union; its representatives had been included in the Indonesian tripartite delegation to this session of the Conference.

With reference to the newly adopted Act No. 25/1997, she stated that it set out the basic principles of labour which would be further elaborated in implementing regulations, of which 12 were currently being prepared. They were expected to be finalized by the beginning of October 1998, so that the Act could enter into force. Act No. 25 not only encompassed the principles of the ILO's seven basic Conventions, but also facilitated ratification of the remaining four basic Conventions which her Government had not yet ratified. The Government had already ratified Convention No. 87, and was preparing the instrument of ratification for Convention No. 138. The others would be considered in due time. She therefore hoped that her Government would be in a position to respond fully to the concerns expressed by the Committee of Experts on the issues of protection against acts of anti-union discrimination, protection of workers' and employers' organizations against acts of interference by each other and restrictions on collective bargaining. With regard to the freedom of association of public servants, she stated that the Government fully recognized the right of every worker to associate freely, as set out in Convention No. 87.

In conclusion, she endorsed the appeal made in the Conference Committee by Mr. Muchtar Pakpahan for ILO technical assistance in the drafting of new labour legislation and hoped that such assistance could be provided by the Secretariat in Geneva or the South-East Asia and the Pacific Multidisciplinary Advisory Team. The Government, together with the social partners, would continue to identify the remaining regulations which were not consistent with the spirit of reform.

The Workers' members thanked the Government representative for the information furnished and said that they had been following the situation in Indonesia very closely. The freeing of Muchtar Pakpahan (whose speech before the Committee is reproduced at the end of the discussion of this case), the recognition of the SBSI and the ratification of Convention No. 87 were all signs of progress in the observance of trade union rights which made it possible to look forward to a more constructive collaboration with the ILO than had existed in the past. The effective application of fundamental standards, and in particular Convention No. 98, sometimes required significant changes in legislation, institutions and practices in order to establish the rule of law which was essential for the exercise of civil and political rights and freedoms. The “security approach”, which had long influenced the industrial relations system, urgently needed to be replaced by measures guaranteeing the rule of law. This case had been one of the most well-known discussed by the Conference Committee, which had examined it on five occasions since 1991 and the Committee on Freedom of Association had issued very firm conclusions and recommendations in several related cases. The Conference Committee had insisted, as had the Committee of Experts, that specific legislation be adopted providing effective protection for workers against acts of anti-union discrimination, as well as protecting unions against interference by employers, public authorities or the security services. Moreover, the Government needed to establish a solid legal framework, instead of regulating fundamental aspects of industrial relations through decrees or circulars. The Committee of Experts had indicated in this regard that the draft legislation of 1997 contained several elements which were not in conformity with the Convention. The draft legislation did not improve the protection of workers against acts of anti-union discrimination. It did not contain any provision guaranteeing the protection of trade union organizations against acts of interference by employers. In sections 48 and 49, it placed excessive restrictions on the registration of enterprise-level unions and their federations, which amounted to restrictions on collective bargaining which, in contrast, needed to be promoted. Moreover, it was absolutely necessary to clarify the methods for the determination of the conditions of employment of public officials. In view of the recent changes, it was necessary to urge the Government to embark without delay on the far-reaching reforms needed to establish a really democratic system of industrial relations. Effective guarantees of civil and political rights were indispensable for the full respect of freedom of association and the right to collective bargaining. The ILO's technical assistance, which had been requested by the Government representative, could certainly assist in the substantial tasks which needed to be accomplished. However, a direct contacts mission would be necessary to better identify the principal priorities and accelerate the necessary changes.

The Employers' members, recalling that restrictions of freedom of association affected both employers and workers, observed that the shortcomings in the application of the Convention had been examined on five occasions since 1991, and most recently in 1997. The problems raised related to three areas: protection against acts of anti-union discrimination; protection of employers' and workers' organizations against acts of interference by each other; and excessive restrictions on trade union's functioning and activities and on the collective bargaining process. In the past, Government representatives had referred to various regulations and draft legislation designed to improve the situation, but the Committee of Experts had still been of the opinion that the Labour Bill of 1997 was not sufficient to meet the requirements of the Convention in a number of areas. One of these concerned the restriction that collective bargaining could only be conducted by registered trade unions with the support of the majority of workers within the company concerned. It was not clear whether this meant that the majority of workers in the enterprise had to support the collective bargaining efforts of the trade union, or whether the trade union needed to have the membership of a majority of workers in the enterprise. There had nevertheless been positive developments since 1991, although they had not been considered by the Committee of Experts to be fully satisfactory. The Government representative had informed the Committee of further changes, which were not surprising in view of recent events. These constituted important beginnings of major reforms. However, emphasis would have to be placed on making much broader changes in labour law in the near future. The Employers' members welcomed the Government's acceptance of the comments made by the Committee of Experts which demonstrated a considerable advance in its approach. Real progress now needed to be made in the country itself. They therefore hoped that these expectations would be fulfilled and that the Government would make considerable efforts to resolve the shortcomings noted in recent years. Although the Government had requested technical assistance, it should be urged to accept the help that could be provided by a direct contacts mission.

The Government member of Iceland recalled that the previous year he had spoken on behalf of the Nordic countries, the Netherlands and the United Kingdom in support of the urgent appeal to the Government to take the necessary measures to bring the situation into conformity with the Convention and to release from prison the independent labour leader Muchtar Pakpahan. This year, speaking on behalf of the Nordic Governments of Denmark, Finland, Iceland, Norway and Sweden, as well as the Governments of Austria, Belgium, Canada, Germany, Italy, Japan, the Netherlands, Portugal, Turkey, the United Kingdom and the United States, he expressed particular pleasure at the positive developments in the present case. These included the decision by the Government to ratify Conventions Nos. 87, 105, 111 and 138 and to release Mr. Pakpahan, who had addressed the Conference Committee two days earlier. He urged the Government to release other prisoners who were still detained for their ideals. Moreover, they recognized that there was still room for further progress to be made so that the fundamental rights set forth in the Convention were respected in law and in practice. He looked forward to such progress and would monitor further developments closely. He also welcomed the request by the Government for ILO technical assistance.

The Worker member of the United States observed that this case was one which offered new hope and promise after years of stagnation and frustration. The case had been discussed five times over the past six years and it was only now, in the wake of dramatic events in the country, that real change appeared on the horizon. For decades, the Government had imposed a military-controlled trade union monopoly on the workers. The statements made by the Government representative which indicated that those days were over were inspirational and reassuring. In order to bring the country into compliance with the Convention, however, the Government had to accept the fact that remnants of the old system still existed in workplaces throughout the country and would pose a serious obstacle to organizing unions of workers' own choosing, independent of government, political parties and employers. This situation required proactive measures by the Government to create a climate in which workers would feel free and secure to choose for themselves. The Experts had provided a good outline of the legal changes needed to reform the labour law in order to create such a climate: the need to strengthen the protection of workers against discrimination for legitimate union activity, especially in the area of attempting to organize new unions and recruit new members; the need to protect workers' organizations from employer interference; and, the need to remove restrictions on collective bargaining not in compliance with the Convention. As concerned the second area, current law allowed for the creation of enterprise level unions or SPTPs. There had been a well founded concern that many if not most of the SPTPs organized during the past few years were employer-dominated or yellow unions. This practice should no longer be encouraged if unions which could really speak for workers were to emerge. He believed that in order for the Government to begin to take positive steps to overcome its economic crisis it would need to build a social consensus for measures which would be painful and would affect the daily lives of millions of people. The key to building such a consensus would be the perception that the pain would be shared equitably by all sectors of society and that workers, through their unions, were participating in the development and implementation of an economic recovery plan. A new labour law which not only permitted but encouraged the emergence of a social partner to fulfil this role would be essential for the country's economic recovery. The American trade union movement had followed closely developments in Indonesia for many years. It had used all means available to secure the release of Muchtar Pakpahan and other imprisoned trade unionists, many of whom remained in prison. He asked the Government to move quickly to secure their release. The American trade union movement, in solidarity with the international movement, would continue to provide its support to the SBSI and other independent unions organized by workers to help them develop quickly their capacity to represent the interests of their members during such difficult but hopeful times for the country.

The Worker member of Spain welcomed the liberation of the trade union leader of SBSI, Mr. Muchtar Pakpahan, and considered that demands should be made with the same force for the liberation of other detained trade unionists. He said that now, more than ever, it was necessary to undertake in-depth reflection on the role of the ILO and of the Conference Committee in particular. The country was undergoing a financial, political and economic crisis with grave consequences for the economies of other countries, not only in Asia, but also in Latin America and Africa. He emphasized that prolonged reflection was required on the possibilities for ILO action at the present time in view of the changes facing those economies. Growth in Indonesia had been based on the violation of trade union rights and the denial of the basic rights of workers. This was a model which did not work and had a negative effect on the rest of the world. He emphasized in particular that the fundamental role of the ILO was to prevent social injustice. If the ILO's principles were not applied, crises such as the one which had happened in Indonesia, would continue to occur. In conclusion, he observed that reflection of this nature was particularly necessary as the twenty-first century approached and in view of the globalization of the economy, if the ILO wished to prevent social crises the world over.

The Worker member of the Netherlands congratulated the Minister of Manpower for commencing his political career with such a stirring deed as the ratification of Convention No. 87. He hoped that the Minister would address the problems relating to the application of Convention No. 98 with similar urgency. Many of these problems had been raised by the Committee of Experts for many years, yet the Government had done virtually nothing over the previous 12 months to respond to these criticisms. The major development during that time had been the adoption of a new Labour Bill. The previous year, he had personally requested the Government to request the views of the Office on the Bill and to transmit those views to Parliament. Unfortunately, the Government had not done so and the Office's comments on the draft text had not been taken into account. As a result, the Minister of Manpower had to face up to a situation in which the new legislation did not provide better protection of the rights guaranteed by the Convention. Moreover, the Bill conflicted with many of the fundamental provisions of Convention No. 87, which the Government had just decided to ratify. He therefore welcomed the Government's request for ILO technical assistance. He called upon the Government representative to answer a number of points: first, while welcoming the ratification of Convention No. 87, he noted that the question of ratification had not been submitted to Parliament and that trade unions and employers had not been consulted on this very important matter. He therefore hoped that the Government would not ratify other Conventions in the same hasty manner, but that it would do so after due consultation with the competent authorities and the representative organizations of workers and employers. Second, was the Government aware that many of the basic elements of the national situation were not in conformity with Convention No. 87 and would a new Labour Bill be developed which took its provisions into account? Did the Government agree that such important guarantees as the right to organize should be contained in the basic labour legislation, rather than in ministerial regulations, as was currently the case? Regarding the introduction of trade union pluralism in practice, would the SBSI only be able to be present in enterprises in which other trade unions (such as the SPSI, which had been the official single trade union) were not established? That would give the SPSI, which had enjoyed a government-granted monopoly position, an unjustified advantage. He suggested that a vote might be organized in the various workplaces so that the workforce could determine the organization by which it wished to be represented or that the workforce might be represented in collective negotiations by more than one organization. The resolution of these questions was vital for the development of genuine industrial relations in the country in the coming years. Moreover, while welcoming the Government's decision to extend the right to organize to civil servants, he wondered how their long-standing government-imposed attitude of neutrality and abstension of independent interest representations by representative trade union organizations would be overcome in practice. This was a practice of more than 30 years. He also wondered what would be done to overcome the more serious problem of all: the Government's security approach to industrial relations, which consisted of military supervision and interference in all trade union activities including strikes, demonstrations, presence at union meetings and the holding of union office by retired military personnel. This attitude of oppression and dependence instilled into the workers over the past three decades could not be abolished overnight. Finally, he requested the Government to indicate its attitude with regard to the continued imprisonment of political prisoners, and particularly trade union activists, including Dita Indah Sari, head of the Centre for Indonesian Workers' Struggle, who was kept under appalling conditions and three members of the SBSI local of Serang, West Java supported by a project of his organisation, namely Messrs. Sumantri, Suseno and Mahmud Hadi who had been released after a period of detention last Spring, but who were now facing criminal charges for activities which, according to ILO standards, were purely trade union activities. In conclusion, he appealed to the Government and the Office to further much more ILO involvement in IMF policies in the country so as to ensure that the social consequences for workers were taken into account when designing structural adjustment policies in the present traumatic economic development.

The Worker member of Greece recalled that Indonesia had been at the top of the list of countries which did not respect any freedoms since at least 1968. The Conference Committee had had occasion to confirm this when examining the application of other Conventions, including Convention No. 29. The changes which had occurred since the last session of the Committee of Experts offered real hope in this respect. They had already had an affect on the situation in practice, as illustrated by the liberation of Muchtar Pakpahan, whom the Conference Committee and the plenary had both had the opportunity to welcome. This progress should be recognized without any false euphoria. All the prisoners of conscience and opinion had to be freed, not just trade unionists. In the same way, workers from neighbouring countries needed to be treated with dignity. A direct contacts mission would be a sound initiative, since no delay in the provision of technical cooperation should be allowed to serve as a pretext for putting off the necessary measures. Admittedly, it would be premature to demand firm and detailed responses immediately from the Government on all the aspects of the case. Nevertheless, the Committee's conclusions should emphasize the need to give real effect in practice to ratified Conventions. They should also take note of the new developments and provide for a re-examination of the case next year to ascertain whether the promises which had been made had been put into practice.

The Employer member of the United States supported certain points made by the Worker member of the United States. He hoped that the Committee's report would emphasize the importance of workers being able to choose freely organizations to represent their interests and that employer-dominated organizations were counterproductive to a sustainable successful enterprise. He felt also that balanced legislation would help enable cooperation in the workplace, leading to economic success and, in turn, social well-being.

Another Government representative endorsed the concern expressed by the previous speakers that it had been necessary to spend so much time on this case, which had been examined by the Conference Committee on at least five occasions. Although the Government had reaffirmed its commitment to review the labour legislation, it needed to be understood that many of the labour laws had been inherited from periods long ago. For this reason, it had accepted the ILO's direct contacts mission in November 1993 to assist in clarifying the situation. One of the objectives of the new Labour Act No. 25/1997 had been to replace all the various Ordinances and Acts from previous eras, as well as to cover more recent issues such as labour market information, manpower planning and productivity. He reaffirmed that the advice given by the ILO direct contacts mission had been used and consultations had been held with the social partners and the relevant institutions concerning the Act. The process of formulating legislation in his country was similar to that in most other countries, in that draft texts were prepared by the Government after consultation with the competent institutions, including the social partners, before being enacted by Parliament. On this issue, Parliament had consulted the representatives of employers' and workers' organizations, including the SBSI, and NGOs. In addition, the comments made by trade unionists from all over the world had been passed on to Parliament and taken into consideration. The outcome of discussions between members of Parliament and the Government had been Act No. 25/1997, and the Government had done its best to accommodate the interests of all sectors of society. The Act would soon be followed by two Bills, the first on trade unions and the second on labour disputes. Detailed provisions relating to industrial relations could be included in these texts. The Minister of Manpower had set up a team the previous week to begin the process of the drafting of the Trade Union Bill. The new Minister had therefore made substantial progress in his short time in office. In response to the questions put by the Worker member of the Netherlands, he stressed that, in the context of the discussions that had been held with the social partners concerning the ratification of the four remaining basic ILO Conventions, it had initially been intended to ratify Convention No. 138 before the others, but had then been decided that Convention No. 87 should be ratified first in order to prepare the ground for the withdrawal of Ministerial Regulation 3/1993, which had been the subject of many of the Committee of Experts' comments. The Government would then proceed to the ratification of the remaining basic ILO Conventions in discussion with the social partners. With regard to the comments concerning trade union monopoly, he noted that there were over 1,000 independent trade unions in the country at the company level. Of the 160,000 enterprises in the country with 25 or more employees, the SPSI was represented only in 10,000, leaving much scope for independent trade unions in the remaining enterprises. In this respect, he pointed out that Act No. 25/1997 facilitated the possibility of having more than one trade union in an enterprise. More details on this issue could be included in the new Trade Union Bill, mentioned above. On the subject of prisoners, he reaffirmed the Government's commitment to review the situation of all those held in prison, especially for political reasons or because of their trade union activism. A progressive release of prisoners had been commenced, with more to come. He added, that the so-called “security approach” to trade union activities could now be discounted. In conclusion, he expressed his appreciation of all the comments made by the members of the Committee and emphasized that significant progress had been made by the new Government over a very short period, including the release of Mr. Pakpahan, the withdrawal of Ministerial Regulation 3/1993 and the ratification of Convention No. 87. His Government would welcome ILO technical assistance to speed up the work of complying with the comments of the Committee of Experts. The Government was endeavouring to do its best, but it had to be realized that it was not possible to change everything in such a short time.

The Committee noted the statement made by the Government representative and the discussions which took place in the Committee. It recalled that the Committee of Experts had been formulating comments for several years on the lack of sufficient measures to ensure protection against anti-union discrimination and interference, as well as the divergencies between the legislation and the promotion of collective bargaining called for by Article 4 of the Convention. The Committee noted with interest the positive steps recently taken by the Government, including the release from prison of some but not all trade union leaders and activists and the ratification of Convention No. 87. The Committee noted, however, that there were still a number of obstacles in the legislation impeding the full application of Convention No. 98. In these circumstances, the Committee urged the Government to take the necessary measures to repeal the severe restrictions imposed on free collective bargaining. It further urged the Government to take sufficient steps to ensure full protection of workers against acts of anti-union discrimination and to protect workers' organizations from acts of interference by the employer. The Committee noted that the Government had requested ILO technical assistance. The Committee expressed the firm hope that with the assistance of an ILO direct contacts mission the legislative and practical obstacles to free collective bargaining and a full application of the Convention would be removed. It trusted that the Government would supply next year a detailed report to the Committee of Experts on the concrete measures taken to bring the legislation into conformity with the Convention.

* * *

PART TWO (cont.)

1. Whilst AWAs are essentially individual agreements, they may be negotiated collectively — see s. 170VE of the WR Act.

2. Committee on Freedom of Association, Case No. 1698 [see 292nd and 295th Reports of the Committee on Freedom of Association at paras. 675-741 and 132-262 respectively].

3. However, provision is made for the conversion of existing paid rates awards to minimum rates awards without loss of the additional entitlements to remuneration: see Part 2 of Schedule 5 to the WROLA Act.

4. Committee on Freedom of Association, 277th Report, para. 229.

5. See Part VIB of the Act.

6. Awards and formal agreements made under federal or state law prevail over those contracts, but do not form part of them — see Byrne v. Australian Airlines (1995) 185 CLR 410.

7. However, some of these may be subject to informal over-award bargaining.

8. Subsections 170LK(4) and (5) and 170M(3) of the Act.

9. Subsections 170LJ(2), 170LK(1) and section 170LR. The term “valid majority” is defined in section 170LE of the Act. The valid majority approval requirement reinforces the voluntary nature of collective bargaining under the Act.

10. Section 170NB of the Act.

11. Sections 170LJ, 170LL and 170LO of the Act.

12. Subsections 89A(1) and (2). Awards made by the Queensland Industrial Relations Commission are similarly limited.

13. Subsection 170LU(5) of the Act.

14. Section 170VF.

15. Section 170VG.

16. Subsection 170VPB(1).

17. Subsection 170VPA(1).

18. Paragraph 170VPA(1)(d).

19. Paragraph 170CK(2)(g).

20. Paragraph 170VPA(1)(e).

21. Subsection 170VK(1).

22. Subsection 170VK(2).

23. Subsection 170VK(4).

24. Subsection 170VK(5).

25. Subparagraph 170VO(1)(b)(ii).

26. Section 83BB.

27. Sections 170WB and 170WC.

28. The exceptions are AWAs for employees eligible for the Supported Wage System (section 170XB); employees undertaking approved traineeships (section 170XC); and employees undertaking approved apprenticeships (section 170XD) in respect of whom modified arrangements apply.

29. Section 170X.

30. Section 170XE.

31. Section 170VPB.

32. Subsection 170VPB(3). As of 5 December 1997, 200 AWAs had been referred to the AIRC. It is also noted that the Employment Advocate has refused to approve 141 AWAs.

33. Section 170VPG.

34. The most recent figures for employees covered by certified agreements relate to the December quarter for 1996. Figures for 1997 are not yet available.

35. Subsection 170VQ(6).

36. ibid.

37. Section 170VM. Note that under that section an AWA may be terminated at any time by agreement between the parties.

38. That is, variable on only limited grounds.

39. Section 170VQ. An AWA is of no effect if it is made after the commencement and before the nominal expiry date of an award made by arbitration under section 170MX of the WR Act. These are awards made in accordance with specified criteria following the termination of a bargaining period in the circumstances provided for in subsections 170MW(3) and 170MW(7) of the Act. That is, where a bargaining period has been terminated in circumstances in which industrial action being taken is threatening to endanger the life, the personal safety or health or the welfare of the population or a part of it or cause significant damage to the Australian economy or an important part of it (subsection 170MW(3)) or in specified circumstances where a paid rates award applies, or would have applied to the employment of employees and there is no reasonable prospect of a certified agreement being reached during the bargaining period (subsection 170MW(7)).

40. Section 170VPA.

41. Division 8 of Part VIB.

42. Such agreements as being consistent with the objects of the Act — see s.3(c).

43. It is also relevant to note that changes made by the WROLA Act to the criteria for registration under the Act make registration easier and thereby expand the scope for collective bargaining.

44. See for example, Comalco Aluminium (Bell Bay) Enterprise Flexibility Agreement, 20 May 1996, Print N1679.

45. Sections 170VPB and 170VPG of the Act provide for the acceptance of undertakings from employers in connection with the operation of AWA. Any such undertakings are taken to be included in the relevant AWA and are enforceable in the same way as other AWA provisions: see section 170VPJ.

Updated by VC. Approved by RH. Last update: 26 January 2000.