San José, Costa Rica, since 1956

Thousands Protest Labor Rulings

If William Siles, a 44-year-old father of six, leaves his job as a heavy-equipment operator with an extra-large severance payment, thanks to his union’s collective bargaining agreement with his employer, is that a fitting reward for his decades as a public worker – or an unfair, pork-barrel perk that impoverishes the rest of the country and violates the Constitution?

Recent decisions by the Constitutional Chamber of the Supreme Court (Sala IV) to annul certain public-worker benefits have caused controversy about cases like Siles’, culminating this week in strikes and protests by thousands of workers throughout the country.

The uproar prompted the International Labor Organization (ILO), where President Oscar Arias spoke on labor rights as a special guest yesterday in Geneva, Switzerland, to add Costa Rica to a list of countries with alleged labor violations up for discussion today at the organization’s annual conference.

Back home, some union leaders said these events marked the beginning of a new level of confrontation between their groups and Arias, and that violence could follow if the high court continues on its current path.

“The streets will fill with blood,” William Jiménez, a union leader from the University of Costa Rica (UCR), whose workers’ benefits are also under consideration by the court, said Wednesday at a protest in San José. He later told The Tico Times that “if they (the government) require violence, we won’t look back.”

The audience for Jiménez and other union organizers included hundreds of workers from the Municipality of San José, the Costa Rican Electricity Institute (ICE), the National Insurance Institute (INS) and at least 16 other institutions whose worker benefits have been challenged by cases before the Sala IV. They marched down Ave. 2 and protested in front of the Supreme Court building, accusing justices and Arias of collaborating to violate labor rights.

Federico Malavassi, who filed most of the cases making headlines today when he was a Libertarian Movement legislator in 2004, told The Tico Times the state can’t support the “abusive clauses” he hopes the court will continue to annul.

“Public workers are having a big party,” he said of the benefits, adding that this week’s strikes are “a big charanga (bash)… They’re not thinking how to serve Costa Ricans. They’re there to see what they can get.”


What’s at Stake

In 2004,Malavassi and fellow Libertarian legislator Carlos Herrera filed cases alleging that benefits included in collective bargaining agreements for a wide range of public institutions are unconstitutional. Other public figures, including then-Ombudsman and current legislator José Manuel Echandi, also filed cases.

The justices, who sometimes take months or even years to rule on suits because they receive thousands of cases each month, began responding to these suits earlier this year. According to data from the chamber, justices have annulled benefits for the National Power and Light Company (CNFL), Insurance Institute, the Atlantic Port Authority (JAPDEVA), and the Social Security System (Caja). Items deemed unconstitutional include a 50% discount on electric bills for Power Company employees, housing stipends for JAPDEVA employees and policy breaks for Insurance Institute employees. However, justices also ruled to uphold many of the questioned benefits, such as the National Property Registry’s progressive vacation plan.

Still up for review are benefits for the employees of the National Oil Refinery (RECOPE), National Production Council, UCR, Banco Nacional and others.

Sala IV spokeswoman Sonia Villegas said justices can’t comment on ongoing cases. However, former Sala IV justice Eduardo Sancho (1990-2002), who wrote one of the chamber’s first decisions on collective bargaining agreements in 2000, told The Tico Times justices’ considerations usually include whether benefits are proportional and reasonable. The Constitution includes protections for collective bargaining agreements, but also places limits on those agreements for some public workers and charges the government with ensuring the fair distribution of wealth, Sancho said.

“A small group can’t have benefits above all the rest,” he added.

The INS annulments prompted the resignations of hundreds of institute employees fearful that a future ruling might place a limit on the number of years of service used to determine employees’ severance payments (TT, June 2). Now, many public employees’ agreements with their employers allow a worker such as Maria Elena Cavallini, 59, who works as an assistant hospital-equipment inspector, to receive a severance payment equivalent to one month’s salary for each of the 22 years she has worked for INS.

However, if the Sala IV rules in favor of the Libertarians in the cases at hand, such payments would be limited to the equivalent of eight months’ salary. (According to the terms of many collective bargaining agreements like INS’, workers receive so-called severance pay even if they quit, unlike the private sector, where the term is generally used for pay to workers who are let go.)

Cavallini, who attended the demonstration outside the Sala IV waving a Costa Rican flag, said that despite the more than ¢5 million ($9,804) she stands to lose if the Sala IV rules to eliminated the unlimited payment, she chose not to quit – unlike many of her Insurance Institute colleagues – because she depends on her ¢400,000 ($784) monthly salary to support her mother and father.

San José municipal employee Siles, for whom the Sala IV ruling could mean a severance payment of ¢2 million ($3,922) rather than at least ¢3.75 million ($7,352) his seniority would afford him should he

quit today, said a decision against the benefit would affect his family’s plans.

“What’s at stake are years with an institution to which I’ve given everything… the plans I have for a future with that money,” he told The Tico Times. He added he’d planned to “one day retire with a good amount of money… maybe for a little farm.”

A few meters away, various speakers accused justices of “sleeping with the Executive Branch,” teaming up with Arias to defend the elite and defraud the poor. One man riled up the crowd by performing bombas, traditional four-line rhymes interspersed with music.

“They say that in these chambers there’s nothing but prostitution – that’s why they’re doing all these things to the Constitution,” he said, greeted by uproarious applause.

The march route from Central Park down Ave. 2 to the Supreme Court featured seven garbage trucks driven by striking municipal workers and signs linking Arias, the Sala IV, the Central American Free-Trade Agreement with the United States (CAFTA), tax reform and other issues often criticized at union demonstrations. Carlos Camacho, who works at a Caja laboratory that produces saline solution, held a sign that read, “No to CAFTA, Yes to biweekly pay (a pending Sala IV decision could change it to payment twice a month), Oscar Arias Antichrist, 666, la Bestia.”

Strikes continued yesterday, as the Association of High-School Teachers (APSE) marched to the Legislative Assembly protesting CAFTA and delays in the payment of their salaries.


A Constitutional Dilemma

According to Malavassi, collective bargaining agreements for public workers are completely unconstitutional, as well as impossible to maintain for a country experiencing a fiscal crisis.

He said the commission of former Finance Ministers that created the Permanent Fiscal Reform Package, designed to address that crisis, also recommended that excessive public-worker benefits be eliminated. Libertarian legislators, who opposed the creation of new taxes, ran with the idea. When they couldn’t get support from public institutions, they started combing through collective bargaining agreements to find excesses and filing Sala IV cases, he said.

Former justice Sancho said Malavassi is partially correct in stating that collective bargaining agreements cannot apply to the public sector. Article 62 of the Constitution states that all workers have a right to collective bargaining; however, Articles 191 and 192 state that public workers must be governed by a unilateral statute.

The way this has been interpreted by the Sala IV is that some public employees are eligible for collective benefits, and others are not, depending on the nature of their jobs, he said. For example, cashiers at state-owned banks perform a commercial function and are therefore eligible for collective bargaining agreements, while bank administrators are not.

Adding confusion to the mix is the fact that the Sala IV can annul benefits justices deem unjustified or disproportionate, using as a guide Article 50, which requires the state to achieve “the most adequate distribution of wealth.”

As justices scrutinize the collective bargaining agreements still before them, the International Labor Organization will scrutinize their recent decisions. The organization’s Committee on the Application of Standards, which meets in Geneva once per year to study adherence to international labor treaties in the organization’s 178 member countries, will discuss the court’s decisions today.

Costa Rica is on a list of 25 countries including the United States, Guatemala, Cuba, Ethiopia, Switzerland, Ecuador and Pakistan with labor issues chosen for review by the commission, according to the daily La Nación.

Luis Varela, Costa Rica’s ambassador to the United Nations’ European Organization, told the daily that the country’s unions are to blame for Costa Rica’s inclusion on the list, and that lumping Costa Rica together with countries that have serious labor problems could damage the country’s image.

Depending on the outcome of today’s discussions, the ILO could send investigators to Costa Rica, a possibility the government hopes to avoid, according to the daily. Labor rights may be getting new attention, but aren’t a new issue, according to Fabio Chávez, an ICE union leader.

“This is a struggle we’ve had for…almost 15 years,” he told The Tico Times yesterday. “Now with the Sala IV it’s worse still.”


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