Observation (CEACR) - adopted 2000, published 89th ILC session (2001)

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

The Committee notes the Government’s report as well as the extensive comments submitted by the Inter-Trade Union Assembly - Workers’ National Convention (PIT-CNT).

Consideration of the needs of workers and their families in
determining minimum wages (Article 3 of the Convention).

The Committee recalls that in its previous comments it referred to the provisions of Act No. 10449 on wages boards mentioned by the Government, considering that although they attempted to meet the workers’ physical, intellectual and moral needs, no reference is made to the needs of workers and their families as provided in Article 3 of the Convention. The Committee therefore requested the Government to indicate the measures taken to ensure that the needs of workers and their families are taken into consideration for the purpose of minimum wage fixing and, more specifically, to indicate whether the minimum wage is calculated on the basis of a basket of staple goods and whether minimum education, health and housing costs are taken into consideration.

In reply to this request, the Government states that the system of wage fixing has ceased to apply integrally for macroeconomic reasons and that the general system provided for all workers, and included in Act No. 10499, is supplemented by decree to fix minimum wages for rural and domestic workers and the so-called minimum national wage. It adds also that these macroeconomic reasons are determined on the basis of the fundamental target of reducing inflationary figures. The Government also states that 80 per cent of national education is provided without charge and that all workers in the private sector have health insurance (D.I.S.S.E) which, by means of contributions from both contracting parties, permits access to health services, without prejudice to amenities under the public health.

In its observations, the PIT-CNT indicates that the great majority of workers consider that no minimum wage exists in terms of the criteria laid down in this provision of the Convention and that when there is no collective agreement the minimum wage applicable is a minimum national wage fixed unilaterally by decree. It also indicates that it can be deduced from the Government’s statements that there is incompatibility between the macroeconomic measures taken to reduce inflation figures and the fixing of minimum wages by free and voluntary collective negotiation. With reference to the failure, for macroeconomic reasons, to apply the wage-fixing system integrally to all workers, it indicates that this government approach must be considered in the light of the responsibility of the State to encourage collective negotiation. The PIT-CNT considers that the Government not only fails to meet the objectives of the collective bargaining system established and in force at national and international level, but that it has ceased to encourage it, arguing that macroeconomic reasons and plans or stabilization policies have involved restrictions on fixing minimum wages by negotiation.

The Committee notes this information and indicates its concern at the Government’s statement to the effect that the fixing of wages by collective bargaining has ceased to apply integrally for macroeconomic reasons and more specifically for the particular objective of reducing inflation levels. The Committee also observes that the Government’s reply refers solely to general aspects of education and national health and notes once again that it does not reply to the specific question of how the basic needs of workers and their families are considered in relation to the national wage level, the price of staple goods, social security benefits and the relative living standard of other social groups, nor does it mention the measures taken in practice. The Committee recalls that minimum wage fixing entails providing wage earners and their families with the necessary social protection as regards minimum permissible wage levels as set down in Paragraph 2 of Recommendation No. 135, and in Article 3 of the Convention. The Committee therefore urges the Government to adopt the necessary measures so that minimum wage-fixing machinery takes into account, in addition to other economic factors, the needs of workers and their families.

Consultation with the representatives of employers
and workers concerned in the fixing of minimum wages
(Article 4(2))

For a number of years, the Committee has noted that the Government follows a practice of unilateral determination of the inter-occupational minimum wage and the minimum wages of rural and domestic workers and has reminded the Government on many occasions that provision must be made by the ratifying State, in connection with the establishment, operation and modification of wage-fixing machinery, for full consultation with the representative organizations of employers and workers concerned, or, where no such organizations exist, representatives of the employers and workers concerned.

In its comments, the Government declares that: (a) minimum wages refer basically to minima applicable only for the calculation of contributions to social security, professional salaries ("aranceles profesionales") etc.; (b) domestic and rural workers are excluded from the wage-fixing system due to the lack of sufficiently representative trade union organizations with which this type of wage can be negotiated; and (c), it has substantially encouraged bargaining by branch of activity and by enterprise without State intervention in order to improve the competitiveness of sectors and undertakings. The Government also refers to its intention initially to prepare draft legislation on collective bargaining which would include the establishment of a tripartite commission for collective bargaining to fix wages of sectors where such bargaining is lacking, and for the minimum national inter-occupational wage, thus complying with the provisions of the Articles. The Government states, however, that this initiative was later abandoned due to disagreement from the employment sectors involved.

The PIT-CNT indicates in its comments that, first, in all cases where there is no collective agreement, the minimum wage applicable is the minimum national wage fixed by decree and without consultation with the workers’ and employers’ organizations, and which the Government claims refers basically to minima which apply only for contributions to social security, professional salaries ("aranceles profesionales"), etc. This affirmation by the Government reveals that the minimum wage is so little based on reality that its inadequacy renders it meaningless. Secondly, the PIT-CNT indicates that the Government justifies the non-applicability of the wage-fixing system by collective bargaining for rural and domestic workers, invoking not only the argument of macroeconomic reasons but also the "absence or virtual absence" of trade union organizations of these workers, which prevents collective bargaining. In regard to the third point relating to the Government’s intention to prepare the draft legislation, the PIT-CNT adds that the lack of consensus between the workers’ and employers’ trade union organizations originates in the attempt of the employers’ organizations to lower the limits imposed by international labour agreements on basic questions in relation to terms and conditions of employment. On these comments, the PIT-CNT reiterates that not only has the Government failed to encourage collective bargaining but that it has attempted to extrapolate the variables of economic adjustment to the employment world with the result that there is neither bargaining nor protection of basic rights. It also adds that the State has formulated a series of restrictions on macroeconomic grounds without these having been the subject of consultation with the representative organizations concerned.

With regard to the consultation of representative organizations of employers and workers in minimum wage-fixing machinery, the Committee recalls that under the provisions of Article 4(2), of the Convention, not only is consultation compulsory but it should also be effected at the time of establishing the scope of the minimum wage system to be established as well as in applying the machinery for fixing minimum wages.

In regard to rural and domestic workers, the Committee notes that for several years the problem has persisted generally of unilateral fixing by the Government of the minimum wage of these workers, on the assumption that there are no trade union organizations sufficiently representative of them. According to the PIT‑CNT, however, such organizations do exist even though they lack State protection in the exercise of their rights. In this respect, the Committee notes that, according to the PIT-CNT comments, in 1990 the percentage of workers covered by collective bargaining amounted to 88 per cent of the total number of workers whereas in 1997 this percentage had dropped to 23 per cent. Citing a study on the new labour relations model, the PIT-CNT indicates that "the withdrawal of the Ministry of Labour from bargaining and the lack of approval of agreements is a disincentive to bargaining at the level of the branches". The Committee expresses the hope that the Government will shortly be in a position to indicate the measures adopted to guarantee full consultation with the representatives of employers and workers concerned in fixing the national minimum wage and the minimum wages of rural and domestic workers. Such measures should include protection of the trade union organizations and the encouragement of collective bargaining.

The Committee hopes that the Government will indicate in detail: (a) what are the components considered in fixing minimum wages for workers, and (b) how consultations have been carried out with the workers’ and employers’ organizations, including those in the agricultural sector and of domestic workers.