Observation (CEACR) - adopted 1997, published 86th ILC session (1998)

Minimum Wage Fixing Convention, 1970 (No. 131) - Uruguay (Ratification: 1977)

The Committee notes the information supplied by the Government in its report as well as the observations submitted by the Inter-Union Assembly of Workers -- National Convention of Workers (PIT-CNT).

Consideration of the needs of workers and their families in determining minimum wages

In its previous comments, the Committee requested the Government to provide information on the working, in practice, of the wage councils established under Act No. 10449 and on the minimum wages fixed by sector of activity and category of workers. The Committee also requested the Government to indicate the measures taken so that elements such as the needs of workers and their families (Article 3 of the Convention) are taken into consideration in determining the level of minimum wages.

The Government states that the policy of determining wages has changed since the Committee made its previous comments, following changes to the country's economic policy which is focused on controlling inflation. It has been noted that the system of determining wages by the wage councils, with participation of the State, had a direct impact on inflation, since inflation was already indexed in the four-month period preceding the determining of minimum wages. The economic policy must also take into account the undertakings made vis-à-vis the Southern Cone Common Market (MERCOSUR)

In its observations, the PIT-CNT considers that the national minimum wage is very inadequate and recalls that it is currently 840 Uruguayan pesos, the equivalent of US$86.35 per month. Furthermore, the minimum wage is used in calculating a series of social benefits (including family allowances and retirement pensions), and for that reason the Government maintains it at extremely low levels. Moreover, according to the PIT-CNT, there are no technical grounds for asserting that the working of the wage councils is really the main source of inflation. The organization stresses that there are no agreements within MERCOSUR for determining joint wage policies or harmonizing such policies; this is simply a pretext put forward by the Government for the purpose of implementing a wage policy geared to reducing wages.

The Committee notes these statements and observations. It refers to paragraph 281 of the 1992 General Survey on minimum wages in which it recalls that the minimum wage must be sufficient for the subsistence needs of workers and their families and that such needs are both a criterion of minimum wage fixing and an objective of the Convention. It notes that, in its statements on the fixing of minimum wages, the Government refers only to macroeconomic criteria. It asks the Government to indicate to what extent and by what methods the needs of workers and their families are taken into consideration in determining minimum wage levels, in accordance with Article 3 of the Convention.

Lack of consultation of the employers' and workers' representatives concerned in the determination of minimum wages

In its previous comments, the Committee asked the Government to indicate the measures taken for consulting the representatives of the employers and workers concerned in determining the national minimum wage and the minimum wage of rural workers, in accordance with Article 4, paragraph 2, of the Convention.

In response to these comments, the Government indicates that, following the change in economic policy for the reasons given earlier (inflation control, commitments under MERCOSUR), minimum wages for the rural sector and domestic service are still fixed by the Executive. For sectors such as public transport, health and construction, minimum wages are fixed through tripartite negotiations; however, in the first two sectors where charging rates exist, the State intervenes to prevent the phenomenon of the indexation of inflation to wages and its repercussion on the cost of these services. As for the other sectors of activity, minimum wages are determined through branch or enterprise collective agreements, negotiated directly between the employers' and workers' organizations concerned.

In its observations, the PIT-CNT considers that the national minimum wage continues to be fixed exclusively by the Executive, and that the social partners (employers and workers) have no opportunity of participating in the minimum wage fixing. This is in flagrant breach of the Convention which lays down the obligation to consult the representative organizations of employers and workers in connection with the establishment, operation and modification of machinery for minimum wage-fixing. The minimum wages of rural workers and domestic workers also continue to be fixed exclusively by the Executive. Lastly, with the increase in the number of workers who have no real opportunity to negotiate, collective bargaining is losing ground and a large proportion of wages are still fixed unilaterally by the employer. As a result, the remuneration of these workers is being reduced and is approaching the national minimum wage.

The Committee notes the above information. It notes the overall persistence, over many years, of the problem of unilateral determination by the Government of the interoccupational minimum wage and the minimum wages of rural and domestic workers without any consultation with the representatives of the employers and workers concerned. It recalls that, in paragraph 186 of its 1992 General Survey on minimum wages, it stressed that one of the essential obligations of the minimum wage instruments is that the minimum wage fixing machinery must be set up and operated in consultation with organizations of employers and workers who must participate on an equal footing.

The Committee hopes that the Government will be able to indicate the measures taken to ensure full consultation with the representative organizations of employers and workers concerned in fixing the national minimum wage and the minimum wages of rural and domestic workers, in accordance with the provisions of Article 4, paragraph 2, of the Convention.

[The Government is asked to report in detail in 1998.]