Law and Standards

Guatemalan labor affairs are regulated by the Constitution of the Republic of Guatemala, the Labor Code, ministerial accords, and a variety of regulations. This body of national law, in addition, explicitly recognizes that international labor law to which Guatemala is party takes precedence over national legislation. Guatemala is a party to the principal instruments of international labor law that provide human rights protections of particular relevance to labor. These include the Freedom of Association and Protection of the Right to Organize Convention (1948) and the Right to Organize and Collective Bargaining Convention (1949). Guatemala is also party to the International Covenant on Civil and Political Rights, by which "Everyone shall have the right to freedom of association with others, including the right to form and join trade unions for the protection of his interests" (Article 22(1)).

The constitution and the labor code establish the protective nature (la tutelaridad) of labor law, by which the labor ministry and its different units are bound to engage in the active protection of worker's rights. An aspect of this legal duty is the promotion of negotiation between workers and employers. Guatemalan labor law is also informed by the constitutional principle (article 106) that in cases of doubt in the interpretation of the law in labor affairs, "the interpretation will be made in the manner most favorable for the workers."

In situations in which a union's members number more than one-fourth of the workforce, Guatemalan law requires the negotiation of collective agreements on conditions of employment-should a legally recognized union request this. This is an absolute requirement. Article 51 of the labor code requires negotiations whenever the objective criteria it establishes are met: that a registered trade union has organized over 25 percent of the workforce. The Phillips-Van Heusen operation in Guatemala is registered there as Camisas Modernas, S.A.; the union, the Sindicato de Trabajadores de Camisas Modernas, S.A, is better known by its Spanish acronym, STECAMOSA. The union of the PVH plants Camosa I and Camosa II, which has had legal status since 1992, claimed to have achieved the requisite 25 percent membership in September 1996 and petitioned to begin collective bargaining (the two plants were combined into one in January 1997).

Negotiating to Negotiate

The company, believing that the union's membership claims were inflated, appealed to the labor ministry to verify the union's membership. The proceedings that followed, in which the minister of labor and inspector general of labor themselves took a direct part, should have facilitated the prompt determination of the facts of the case. The verification of the strength of the union's membership, the sole issue of contention, should have been a simple process. The actual process was not-nor did it lead to the determination of the facts.

Guatemala's top labor officials summarily halted the determination process on November 11, 1996, when the labor ministry declared that it was unable to determine the union's membership. Abdicating its responsibilities, the labor ministry closed its own proceedings and invited the union, and the company, to take their concerns to the labor courts. The union did so. However, as Guatemala's labor courts are not known for providing effective remedy in such cases, the prospects for the success of the union's efforts are limited.

Collective bargaining agreements are uncommon in Guatemala's industrial sector, and there are no such agreements in the maquila sector. The procedure for the initiation of such negotiations is, however, generally straightforward. If a union's membership has recently been submitted to the labor ministry, through the filing of its official list of members with the appropriate office of the labor ministry, a union's membership numbers may be accepted without further question and a company may be instructed to initiate negotiations. The STECAMOSA union, however, had last provided its membership list to the labor registry on August 30, 1995. An updated list of members, including new members approved by the union's September 1, 1996 general assembly and claimed to bring the union's membership in excess of the requisite 25 percent, was not formally registered with the labor registry until over six weeks later. This lengthy delay, explained by the union as designed to protect union members fromanticipated harassment by the company, complicated the union's ability to have its membership strength accepted without challenge.

A registered trade union can legally negotiate with an employer whatever its numbers, and indeed Guatemalan law requires the labor ministry to encourage this. However, if an employer challenges a union's claims to have organized one-fourth of the workforce-the threshold at which a company is compelled to begin negotiations-the labor ministry can assess the actual membership of the union. Certain norms for trade union organization established in the labor code, such as the maintenance of official record books as well as the records of yearly registration with the ministry's labor registry, may provide sufficient information on membership without recourse to a formal count. The presentation of such documents, however, does not in itself preclude further challenge to a union's status. At the same time, the failure to present such documentation at the time a petition to negotiate is submitted does not invalidate a union's claim to a certain membership, so long as the documentation is later submitted or membership can be proven by other means.

The Question of Numbers

The relevant labor ministry dossier opens with a formal request by the union, on September 2, 1996, to initiate collective bargaining on conditions of employment with the company. The petition includes a draft collective agreement to be delivered by the labor ministry to the company, for response within thirty days. The union's petition, in accord with established procedures, states simply that its membership exceeds one-fourth of the total workforce, that a draft collective agreement is proposed as a basis of negotiation, and that it is prepared to initiate such negotiations. Attached to this was a certified statement of relevant sections of the minutes of the union's September 1, 1996, general assembly. Notably absent from this statement was the text of the minutes on agenda item 4, the assembly's consideration of the applications of new members, ratification of their membership, and the union's actual strength after the membership drive.

Guatemalan labor norms and the STECAMOSA internal statutes identify new members whose applications have not yet been approved as members "ad-referendum": they become full-fledged members after they have been welcomed to the union at a general assembly and their membership is announced and approved by this body. Generally it is only after their candidacy is ratified in this form that their names are registered with the labor ministry. Similarly, in establishing a quorum for such assemblies, only those whose membership has been ratified by the previous general assembly are counted in determining whether the required quorum is present. Complicating the union's case, and providing the initial basis for the company's challenge to it, was the document's summation of the assembly as having reached a quorum, there being present "one hundred and twenty of the one hundred and thirty-five members the union has."

One hundred and thirty-five, the total membership prior to the welcoming of new members in the September 1 assembly, fell short of the one-fourth required. Accordingly, these summary minutes became the cornerstone of the company's challenge. The company subsequently maintained that the entire workforce numbered 664, a figure the labor ministry did not question: 25 percent, then, would have been 166. Human Rights Watch subsequently confirmed that the union had stated in its full general assembly minutes (recorded in its ministry-approved record book) that its membership on the conclusion of the general assembly had reached 177. Human Rights Watch, upon examining the full set of membership files, concluded that the union could well have claimed a total of 189 signed-up members at that time (that it did not was attributed by union leaders to their having failed to reconfirm several members' intentions to stay with the union in the last days of the drive). None of this information, however, was made available to the company or the labor ministry, on the grounds that it could have served to subject union members to harassment.

The decision not to refer to the total number of union members in the initial petition to negotiate reflected the advice of the union confederation with which the STECAMOSA workers were affiliated (the GuatemalanConfederation of Trade Union Unity, CUSG). The delay in registration of the updated list of members and the reluctance to turn over union records appears also to have reflected this advice, and the lack of advice.

Contributing to the union's reluctance to disclose its membership list was the evidence, which Human Rights Watch subsequently confirmed, that known union members were, in fact, being subjected to prejudicial treatment that had led many to quit the company. According to the company, union and labor inspectorate, forty-six of the 131 union members registered with the labor ministry as of August 1995 had quit the company by August the following year: an attrition rate of 34 percent. This contrasts with company information from past years citing a turnover of from 2 percent to 5 percent overall. Equally striking was the significant number of union members who left the company-or signed letters withdrawing from the union-in the months before and in the two weeks after the union's September 2 petition. Thirteen are known to have resigned in August alone, including eight from Camosa II's most unionized section, the finishing department. Human Rights Watch confirmed the resignation of nineteen union members from the finishing department during the first nine months of 1996, although the total appears to have been even higher. Union sources claimed twenty-four members in finishing had resigned in this period, while company personnel records reviewed by Human Rights Watch showed the resignation of thirty of its staff between November 1995 and October 1996.

A further element in the union's reticence to reveal its membership, apparently reflecting both the past and recent turnover in the union's executive and a lack of legal advice, was that the union simply had not maintained all of the official record books that it should have. Although Human Rights Watch examined the official records of its general assembly and executive committee meetings (bound volumes numbered and registered with the labor ministry), it was surprised to find that the third of four official volumes required, a membership ledger (libro de asociados), had not been registered and maintained. As a consequence, it was not available to present to labor inspectors when requested. This alone might well have justified a decision by the labor ministry to carry out a formal count of the union's members.

A Recourse to Form Over Substance

The union responded promptly but ineffectually to answer the challenge to its petition, handicapped by its initial failure either to have registered its membership as of September 1996 or to have an up-to-to-date membership ledger. Union leaders made further efforts to provide documentation to the labor ministry, but found little cooperation: the labor inspectorate rejected an updated list as without standing, for example, on the grounds that it had not been formally registered, stamped and sealed by another labor ministry office, and labor inspectors did not examine the original membership forms, although these were available. The following week, on October 18, the union formally registered the updated membership list, which was stamped and sealed with the labor registry of the General Labor Office, providing the names and personal information on a total of 177 union members. This certified list, in turn, was declared without standing on the grounds that it had not been registered before the company's petition of September 23. As a consequence, it was never considered a substantive element in the determination of the facts of the union's membership.

The Ministry of Labor can, under Guatemalan law, take into account any and all forms of evidence in its deliberations. To fail to do so in a matter concerning a union's efforts to engage in negotiations is to default on its obligations to protect workers' rights. The recognition of the registration of the October 18 list, in this procedure, would not in any event have represented the end of the requested verification procedure. The list was, however, an indicator that the union's proposal to negotiate was well-founded, and that the administrative procedure to determine its merits should not be cut short. A physical count of the membership, conducted under conditions negotiated with the two parties (but which could ultimately be imposed by the ministry) was well within the scope of the ministry's prerogatives and had, in fact, been accepted as desirable by both sides.

The union's updated list was rejected as the basis for the labor ministry's proposed count of the union's members. Labor inspectors determined, moreover, to conduct a count of members under conditions that would havesubjected individual union members to unfair pressures, given the context of the union's efforts: union members were to have been called into the personnel office of the Camosa II plant one by one, to be questioned by a labor inspector in the presence of company and union officials. This was described by union members as precisely the procedure used when workers are called in for disciplinary reasons and was generally seen as intimidating and unfair. As a consequence, the union expressed its disagreement with the process, and formally proposed an alternative. The alternative, however, was not formally considered.

The labor ministry inexplicably departed from normal procedures in the immediate aftermath of the union's having registered its official list with the labor registry. The ministry made no formal response to the union's proposal for an alternative procedure for a count of the membership, although this was tabled in a meeting with the deputy minister of labor and sent subsequently to the company. The ministry did not encourage further discussion of procedures for a count and proposed no further measures to implement a count before it abruptly closed the case. Also, the ministry omitted the union's formal proposal to reconsider conditions for a recount from formal summations of the case. In subsequent documents closing the case, Minister of Labor Arnoldo Ortíz Moscoso and Inspector General of Labor L. Roberto Rodríguez declared, instead, that the union had flatly opposed a count of its members. This was a misrepresentation of the facts.

Deciding Not to Decide

Although the Ministry of Labor from the inception of the case was concerned solely with the question of the union's membership, it did not pursue a course of action by which the facts of this membership could conclusively be established. Rather, it accepted challenges made by the PVH company uncritically, refused to consider the merits of a verification procedure proposed by the union, refused to accept documentary evidence of union membership that had been registered with the General Labor Office and abruptly curtailed the procedure by declaring its inability to reach a conclusion.

The documentary record does not indicate that the labor ministry encouraged the negotiation of a collective agreement between the two parties. Quite to the contrary, the absence of such documentary material was reinforced by statements to Human Rights Watch by outgoing Minister of Labor Ortíz Moscoso that he had seen his role solely as that of an impartial mediator and, indeed, that he could not force the parties to negotiate or even indicate that they should do so. Similarly, and notwithstanding the filing of the union's membership list on October 18, Ministry of Labor documents concerning its petition continued after that date to reflect only the registration information of previous years. This pattern persisted even in the ministry's final resolutions on the case, by which the case was handed over to the courts, to the extent that erroneous official information already corrected in the file (a labor registry note that union members totaled a mere twenty-nine which had been promptly amended) was newly cited as fact. The labor ministry's determination to continue to cite such official memoranda was apparently intended to show that the union's claim was not serious, and that the information required for a determination of the actual membership was so impossibly tangled as to make the truth unattainable.

In sum, the labor ministry did not encourage and facilitate negotiation in its handling of the STECAMOSA petition, shirking its obligations under Guatemalan law to do so. This obstruction was achieved in part by unnecessary administrative obstacles, aggravated by an apparent unwillingness to resolve the disputed facts of the case, and compounded by what appears to have been an incorrect interpretation of the legal norms governing the admission of evidence into an administrative process under Guatemalan labor law.

Had the ministry acted dutifully to establish the facts, the question of the size of the union's membership would have been promptly answered. Insofar as the body of evidence examined by Human Rights Watch indicates that the union's strength as of September 2, 1996, in fact exceeded the one-fourth threshold, the Ministry of Labor's failure to verify the union's membership in effect obstructed the Camisas Modernas workers' rights to freedom of association.

Had the Ministry of Labor established the facts, as requested by both the company and the union, a precedent would have been set with which many Guatemalan and foreign employers in Guatemala's maquila sector would have been uncomfortable. Major manufacturers are on the record in expressing their opposition to trade unions in their plants; and few unions have established a foothold in this sector. Company spokesmen have described compulsory negotiations with unions as potentially crippling. Economic planners now in government may well have shared this discomfort. By refusing to enforce the law, the labor authorities maintained a status quo in which not one of Guatemala's overseas assembly plants operates with a collective labor agreement, and less than a handful tolerate independent trade unions.

A Background of Claims of Anti-Union Pressures

A recurrent theme in the history of union organization at Phillips-Van Heusen's Camosa I and Camosa II plants, since union organization began there in 1989 under an earlier PVH leadership, has been the claim of undue pressure put upon employees to reject trade union membership, to relinquish such membership, or to resign from the company because of union involvement, or their outright dismissal.

As noted, there were positive practices at the PVH plants, with workers having free access in and out of the facility during breaks, the right to post signs calling for collective bargaining above their workstations, and a general climate of tolerance of workers' rights to free expression. However, Human Rights Watch found considerable evidence that union members at the two PVH plants had faced discriminatory treatment that included pressures to withdraw from the union or resign from the company. A pattern of discriminatory treatment of unionized employees was combined with implicit and explicit warnings of the vulnerability to the same treatment of other workers contemplating affiliation.

Administrative and court orders imposed to protect job stability forbid both arbitrary dismissals and certain changes in the conditions of employment, such as the involuntary transfer from one production operation to another. Such measures protect registered union officials at all times. Court injunctions may protect the entire workforce while unions are in a process of formation and in the course of labor disputes. However, the manipulation of the work available to a particular department, a particular workforce, or a particular individual, where wages are paid on piece-rate basis, may vitiate these orders by drastically reducing the individual worker's weekly income. Such radical changes in income were found to be particularly prevalent among union members at the PVH plants under study, which have been under an injunction protecting job stability since September 1992.

A disturbing pattern appeared in which many workers described having their incomes reduced to one half or quarter of the earnings they had regularly received at the same jobs in the years prior to joining the union. In such cases, workers whose employment was formally protected in law, some of them with up to seven years' tenure with Phillips-Van Heusen and records of numerous quality and production awards from the company, said they were being forced to leave to seek employment elsewhere.

Human Rights Watch concluded, on the basis of its review of individual cases and the overall pattern of resignations, that local company managers wanted these union members to resign, and that they had encouraged resignations through a pattern of discriminatory treatment of union members. This pattern of forced resignations appeared comparable to unlawful dismissals, in that the deprivation of income leading to resignation was seemingly orchestrated in response to trade union activity.

A principal condition of employment, the workers' ability to earn beyond the absolute minimum (Q17.60/day; about US $2.50), is in significant part subject to the discretion of the employer. Insofar as the base wage is not generally considered a living wage in Guatemala City, supplementary income earned on a piece-rate basis is the norm by which most employees bring their wages up to a reasonable level by the standards of the maquila industry. A range of conditions regularly arise, however, under which such high levels of production cannot be maintained regardless of the level of skills and commitment of individual workers. These include interruptions of normalproduction brought about by machine breakdowns, production delays at some other part of the plant, delay in the delivery of working materials, and other factors beyond an operator's control.

Workers whose incomes are threatened by such developments may be cushioned by the "protection" of income: a guaranteed payment at the level of the worker's average earnings. But unlike the routine protection of income for those who agree to transfer to new work responsibilities, protection for interruptions of production is largely left to the discretion of supervisors and to personnel policies.

The protection system in itself provides a means through which inequities in the piece-rate system may be addressed. However, the element of discretion in its implementation, and the lack of recourse by workers to arbitrary decisions in this regard, open the possibility of its inequitable application to the prejudice of union members. The failure to protect income above the base rate, adjusted to the previous level of average earnings, is a principal object of complaint by staff interviewed by Human Rights Watch, who maintain that it represents an instrument by which union members are treated in a discriminatory, punitive fashion.

Many of the union workers interviewed by Human Rights Watch complained that supervisors discriminated against them, particularly in the protection of income, but also in the delivery of working materials and in the speed with which machines were repaired. Workers described being criticized by supervisors and personnel officers for having joined the union, and then receiving inadequate or poor quality materials, being unjustly reprimanded for the quality of their own work, being assigned poor machines and being denied prompt and effective technical assistance when their machines broke down.

Another area in which major discretionary payments may be provided in a manner prejudicial to union membership is that of severance payments for resignation from the firm. While an injunction prevents the company from dismissing workers without a court order, inducements may be made to encourage resignations in the form of generous severance payments. Like the provision for compensatory protection of incomes for those detailed to new assignments or prevented from meeting production quotas by equipment breakdowns, the company's system of severance payments is two-edged. It may, on the one hand, provide workers a generous reward for years of service when retirement is truly voluntary. At the same time, disproportionate payments to union members for their resignation could be inappropriate inducements.

The combination of measures tending to severely cut union members' capacity to earn in the plant, and inducements for resignation, was the package described to Human Rights Watch by numerous union members, as well as some of the non-union members whom managers suggested Human Rights Watch interview. As noted, Human Rights Watch confirmed the resignation of nineteen union members from the finishing department during the first nine months of 1996, most of them longstanding company employees.

In spot checks of personnel records of union members who resigned in 1996, it was also possible to determine that high rates of discretionary severance payments were in fact made, although without a full review of compensation paid to staff who left the firm in 1996 this is not conclusive evidence of inducements having been offered to remove union members from the PVH work force. It does, however, given the high proportion of union members affected, give cause for concern and further investigation.

The significant numbers of resignations of union members from the company in the course of 1996, which union members attributed to the combination of inducements and cuts in earning power, were paralleled by a smaller number of withdrawals from the union. Human Rights Watch spoke with some of these individuals, as well as close friends and colleagues of other former union members. Human Rights Watch also reviewed a number of withdrawal letters, almost all of them produced on a computer printer, signed by union members in the immediate aftermath of the presentation of the petition to negotiate. The form and substance of union members' letters to renounce union membership, combined with their timing, suggested the company had prepared the letters and encouraged theirsignatures. This was a concern already raised by Human Rights Watch with company executives in November 1996, and they agreed to end the practice if it existed.

Threats of Violence

Human Rights Watch found that both the company and the union took threats of violence or perceived threats very seriously. This was in part a legacy of Guatemala's grim record over many years of government, private sector, and opposition violence in the context of labor disputes. Reports by several managers that they had received anonymous, late-night telephone calls to their homes or had been followed led the company in September 1996 to hire private security guards for two senior staff. These staff, who deal most directly with personnel issues, were for a time accompanied daily to and from their homes. The behavior of these plainclothes guards, in turn, as they waited outside the plant each day, was viewed as intimidating by union members interviewed by Human Rights Watch. Union activists also reported other forms of intimidation to Human Rights Watch: members of the union's executive committee reported incidents in which they were photographed and these were seen as cause for alarm. Union

members' fear of violence continues to be described in relation to the background of trade union repression in Guatemala. A very real concern was expressed that the PVH union could be targeted for violence by others in the

private sector, particularly should PVH break ranks on union recognition with other manufacturers there.