Observation (CEACR) - adopted 1998, published 87th ILC session (1999)

Minimum Wage Fixing Convention, 1970 (No. 131) - Portugal (Ratification: 1983)

1. The Committee notes the detailed information provided in the Government's report in reply to its previous comments, as well as the observations made by the General Confederation of Portuguese Workers (CGTP) concerning infringements in the application of the Convention.

2. According to the CGTP, the level of the national minimum wage can be reduced according to sector of activity (for instance, domestic service), age, occupational skills and work capacity. This reduction can reach up to 50 per cent of the minimum wage for workers with a reduced capacity to work, and up to 20 per cent for workers aged between 18 and 25 in categories considered to constitute training for qualified or highly qualified professions (apprentice, trainees, etc.). This practice, which does not take into account the fact that young people today have higher levels of qualification, is used by employers as a way of paying lower wages to young people.

3. The CGTP also observes that the criteria for the adjustment of the minimum wage, provided by the Convention, have been disregarded in favour of economic criteria. The Government and the employers have defended making only minor updates of the minimum wage, arguing that it is necessary to avoid a knock-on effect on the increase of other wages. Therefore, the minimum wage policy has become a method of controlling and restricting wages in general, and has lost its effectiveness by not keeping pace with the average wage growth (from 59.4 per cent in 1990 to 51.3 per cent in 1994) and falling in real terms vis-à-vis inflation (from 0.3 per cent in 1993 to 1.3 per cent in 1994). In addition, the CGTP quotes the Agreement on Strategic Dialogue of December 1996 which provides that: "The guaranteed minimum remuneration, taking into account its social function and also its contribution to employment promotion, shall be updated annually taking as a reference the rate of inflation of tradable goods and the productivity gains obtained in the exposed sectors of the economy, to ensure that it increases faster than the average wage." According to the CGTP, the criteria established in this Agreement (not signed by the CGTP-IN) to keep the minimum wage up to date, do not take due account of the provisions of the national Constitution or of the Convention for the following reasons: (i) it takes an economic view of the minimum wage, thus weakening its social function; (ii) inequalities are increasing; (iii) this quoted provision is incorporated in the medium-term agreement, and, as a result, could have negative repercussions on the minimum wage level, not only in 1997 but also in 1998 and 1999.

4. The CGTP further states that the updating of the minimum wage levels to be applied in 1997 constituted a serious violation of the right to participation of trade union organizations, as provided in the Convention and in the national law. According to the CGTP, on 27 December 1996, the Government announced that the Council of Ministers had approved the minimum wage revision for 1997, the exact content of which was made known through the media, without informing or holding prior consultations with the trade union organizations. In response to trade union criticism the Government arranged a meeting with the Permanent Committee for Social Dialogue on 8 January 1997. The report of the Interministerial Working Party on the Minimum Wage was only sent the day before the meeting. This report, contrary to the usual practice, did not contain a number of possible options for debate. It simply defended the amounts decided by the Council of Ministers, and no alterations were made to the minimum wage levels already decided. This exchange constituted, according to the CGTP, nothing more than simulated consultation.

5. In reply to the CGTP's observations, the Government indicates that comments from the corresponding agencies and their replies are being awaited, and that the ILO will be duly informed as soon as these elements are received.

6. The Committee hopes that the Government's comments in reply to the above CGTP's observations will be provided in the near future.

7. A request on other matters is also being directly addressed to the Government.

[The Government is asked to report in detail in 2000.]