Case story

  • Germany

OECD NCP Germany - DGB vs. Bayer AG

The Philippines 2007

This case story originates from BASESwiki.org, a platform based on wiki style contributions from a virtual network or individuals, companies and organizations with relevant expertise. Though some of the information may be outdated or inaccurate due to the wiki-nature of the BASESwiki platform, they still present a valuable resource. ACCESS is reviewing and updating all BASESwiki case stories. 

Case Status

DGB and EUBP-FFW argued that Bayer AG, through the conduct of its subsidiary in the Philippines, had failed to observe the following:

  • "General Policies" (Section II)

  • "Employment and Industrial Relations” (Section IV), in particular the principle of bona fide negotiations.

Story

On 27 June 2003, the German NCP received a complaint from DGB against Bayer AG. DGB argued that a subsidiary of Bayer AG in the Philippines had unlawfully recognized one of two competing company unions as a contracting party to a collective bargaining agreement in the period from 1998 to 2002.

Procedure:

The German NCP accepted the complaint and reviewed statements from the parties. In July 2004, the NCP held discussions with DGB; it met with both parties at the German Federal Ministry of Economics and Labor in October 2004. The purpose of the meeting was to facilitate information exchange with a view toward reaching an agreement acceptable to all parties—DGB, the affected Philippine union, and Bayer AG. After additional discussions in May-June 2007, the NCP closed the case and issued a joint statement in accordance with the OECD Guidelines.

Parallel proceedings:

The Philippine Supreme Court found several violations of Philippine labor statutes in 2002, particularly of the collective bargaining provisions. The focus of the complaint was the legality of dismissal of union representatives and EUBP-FFW members between 2000 and 2002. EUBP-FFW argued that it was entitled to receive union membership dues that Bayer Philippines had transferred to the REUBP union, which the Court had retroactively found to be unlawful.

Additional Info: The German National Contact Points is located in the Federal Ministry of Economics and Technology.

Outcome

The NCP mediation resulted in the issuing of a joint statement committing the parties in the Philippines (Bayer Philippines, EUBP-FFW, and the former union president) to the following:

  • Bayer AG asserted that Bayer-Philippines management never intended to obstruct union activities by EUBP-FFW and expressed regret that EUBP-F FW and DGB had a different impression. Bayer AG said that this controversy could have been avoided if all involved had been more willing to cooperate.

  • Given the financial losses incurred by EUBP-F FW (through the loss of its share of union membership dues from 1998 to 2002), Bayer Philippines offered to repay the union on the condition that the latter drop all its claims and legal measures against Bayer Philippines relating to the (now undisputed) transfer of union membership dues to REUBP from 1998 to 2002.

  • In the case of the sole pending individual labor court proceeding (filed by the former EUBP President against Bayer Philippines), a settlement had already been reached (taking into account the ruling of the Court of Appeals of 30 January 2006). The settlement provided for the reinstatement of the former union president with the payment of all claims and remuneration since his termination in 2000 and damages.

  • All parties committed themselves to end the controversy with an amicable settlement of the proceedings.

Participant Perspectives


German NCP

Date: 2007/06/29Perspective:Statement by the German National Contact Point for the ‘OECD Guidelines for Multinational Enterprises’ on a Specific Instance brought by the DGB against Bayer AG (EUBP-FFW ./. Bayer Philippines)

On June 27, 2003 the DGB submitted a complaint against Bayer AG to the German National Contact Point for the ‘OECD Guidelines for Multinational Enterprises’. The background of the complaint were the consequences of the unlawful recognition of one of two competing company unions as contracting parties to collective bargaining by a subsidiary of Bayer AG in the Philippines in the period 1998 to 2002. While Bayer Philippines again recognized EUBP-FFW as the lawful union upon a corresponding ruling by the Philippine Supreme Court in 2002, there continued to be objections to the consequences of the conflict from the perspective of the complainant, namely the DGB, which represented the interests of the EUBP-FFW. Leading up to the complaint were acts that the court found to be violations of Philippine labor statutes, in particular provisions concerning collective bargaining; it should be noted that in advance of these events there were divergent votes and views on the interpretation of decisions regarding the subsidiary Bayer Philippines and the Philippine trade union EUBP-FFW which represents the employees there.

The specific issue at the focus of attention was the legality of dismissal for operational reasons of union representatives and members of the EUBP-FFW in the years from 2000 to 2002. On the other hand, the EUBP-FFW claimed entitlement vis-à-vis Bayer Philippines to the union membership dues transferred by that company to the REUBP union, which was retroactively found to be unlawful. According to the DGB and the EUBP-FFW, the "General Policies" (Section II) and the principles underlying "Employment and Industrial Relations" (Section IV) of the ‘OECD Guidelines’, in particular the principle of bona fide negotiations had not been observed.

After careful review, the German National Contact Point accepted for consideration the questions that had been raised and received detailed statements from both parties. In July 2004 the National Contact Point had a discussion with the DGB and in October 2004 a discussion with both parties in Germany's Federal Ministry of Economics and Labor (thus designated at that time) in the interest of working toward an agreement acceptable to the DGB, the affected Philippine union and its representative, and Bayer AG. The essential results of the meeting were that, owing to the complex issues, both parties should obtain further information.

On the basis of the information that has meanwhile been received and after additional discussions between the National Contact Point and the DGB and a meeting with all of the parties in May / June 2007, the case can now be concluded with the following joint statement in . . . accordance with the ‘OECD Guidelines’, subject to the legally binding conclusion, within a appropriate period of time, of the agreements among the three involved parties in the Philippines (Bayer Philippines, EUBP-FFW, and the former union president):

Bayer AG asserts that Bayer Philippines management at no time intended to obstruct union activities by EUBP-FFW and regrets if this impression had been obtained by EUBP-FFW and the DGB. In this connection, Bayer AG is of the opinion that the controversies that arose could have been avoided if all of those involved had shown more willingness to cooperate and had reached out to one another.

In view of the fact that EUBP-FFW incurred the loss of a substantial share of union membership dues in the period 1998 to 2002, Bayer Philippines has submitted a financial offer in the interest of further cooperation in the spirit of trust. The payment will be made immediately under the condition that EUBP-FFW no longer raises claims against Bayer Philippines owing to the (now undisputed) transfer of union membership dues to REUBP in the 1998 to 2002 period, and appropriately shows that all requests and legal measures to this effect have been dropped.

On the only still pending individual labor court proceeding filed by the former president of EUBP against Bayer Philippines, a settlement has already been reached that takes account of the ruling of the Court of Appeals of 30 January 2006. This provided for the reinstatement of the former union president with the payment of all claims and remuneration since termination of employment in 2000 and the payment of compensation for damages.

All of the parties announce the above described situation to be ended with the amicable settlement of the proceedings.

The National Contact Point expects that this dialogue will contribute to an amicable ending of the complaint filed here and to a more intensive exchange of information between both parties, and to improved transparency, and they thank the participants, particularly Ms. Meyer and Dr. Eckl, Mr. Botsch, and Mr. Hahn of the DGB and Ms Ehemann-Schneider, Mr. Naumann, and Mr. de Win, chairman of the all-works council, of Bayer AG for their constructive participa-tion.

The OECD Guidelines for Multinational Enterprises, as part of the OECD Declaration on International Investment and Multinational Enterprises, present recommendations for responsible corporate conduct in the case of investment abroad. The governments of the OECD Member Countries and other participating countries have committed themselves by way of their respective National Contact Points (in Germany the Federal Ministry of Economics and Technology) to promoting the use of these voluntary codes of conduct and to arriving at - 2 - . . . solutions to complaints by way of the trusting intermediation of the respectively relevant partners.

 

Contributor(s): This article was modified by Kyle (3), Nicolaclayre (3), 65.96.169.178 (1), and Ejfturnbull (1).