Direct Request (CEACR) - adopted 2011, published 101st ILC session (2012)

Minimum Wage Fixing Convention, 1970 (No. 131) - Armenia (Ratification: 2005)

Articles 1(1) and 4 of the Convention. Minimum wage system. Consultations with the social partners. Further to its previous comment, the Committee notes that there is still no institutionalized framework in place for conducting consultations with representative employers’ and workers’ organizations before fixing and adjusting minimum wage rates. In this regard, the Committee notes the comments of the Republican Union of Employers of Armenia which indicates that the Government simply informs them of the latest decision determining the minimum wage level. The Government refers to a tripartite committee operating under the terms of the National Collective Agreement of 2009, which discusses wages-related issues, without being clear however, if this is a permanent consultative body mandated to regularly review minimum wage rates and formulate recommendations on their adjustment. The Committee therefore requests the Government to provide additional explanations on any initiatives to establish a framework for carrying out genuine and effective consultations with the social partners at all stages of the minimum wage fixing process.

Article 3. Elements to be considered in determining minimum wage levels. Further to its previous comment, the Committee notes the Government’s indication that the current minimum wage rate is set at 32,500 Armenian Dram (AMD) (approximately US$85) per month while the value of the minimum consumer basket is calculated at AMD43,056 (approximately US$111) per month based on World Bank methodology and at AMD62,644 (approximately US$163) based on methodology prepared of the Ministry of Health. The Committee notes that according to the terms of the Act of 16 March 2004 on minimum goods necessary for subsistence and living wage, the minimum consumer basket is to be used as a benchmark for the determination of the minimum wage, pensions, scholarships and other social benefits. The Committee also notes the comments of the Confederation of Trade Unions of Armenia according to which: (i) no procedure has yet been established for the indexation of the minimum wage as prescribed by the Labour Code; (ii) living standards are not taken into consideration when determining minimum wage levels; and (iii) there is no legal text defining the structure of the minimum consumer basket. In this connection, the Government indicates that draft legislation amending the Act of 2004 was prepared to define the structure, composition and methodology for the calculation of the minimum consumer basket but has not been adopted for fear that integrating the cost of minimum consumer basket in social policy might negatively impact on the macroeconomic stability of the country. The Committee requests the Government to elaborate on any measures taken or envisaged in order to ensure that minimum wage levels are determined taking into account not only economic factors but also social considerations, such as the basic needs of workers and their families, along a methodology that guarantees the full consultation and direct participation of employers’ and workers’ organizations concerned.

Article 5 of the Convention and Part V of the report form. Application in practice. The Committee notes the statistical information provided by the Government concerning the evolution of the minimum wage rates in the period 2008–10 as compared to the evolution of the average wage and the cost of the minimum consumer basket. It also notes the inspection results concerning the number of infringements of the minimum wage legislation reported in 2010. The Committee requests the Government to continue providing up-to-date information on the practical application of the Convention, including, for instance, the approximate number of workers remunerated at the minimum pay rate, the evolution of the minimum wage as compared to the evolution of economic indicators such as the inflation rate, inspection results showing the number and nature of contraventions observed and sanctions imposed and copies of official reports or studies addressing issues of minimum wage policy.