Observation (CEACR) - adopted 2005, published 95th ILC session (2006)

Minimum Wage Fixing Convention, 1970 (No. 131) - Guatemala (Ratification: 1988)

Further to its previous observation, the Committee notes that no reply has so far been received to the extensive comments made by the Trade Union of Workers of Guatemala (UNSITRAGUA) on 28 October and 16 November 2004, and which were communicated to the Government on 26 November and 1 December 2004 respectively.

1. According to the trade union organization, the current levels of minimum wage rates are not sufficient to cover even 50 per cent of the cost of the basic basket of essential consumer goods. UNSITRAGUA further alleges that, without taking into account inflation or the loss of purchasing power of the national currency, the existing gap between the minimum wage and the cost of a basic basket of essential goods is more than 110 per cent. In fact, according to the National Institute for Statistics, in September 2004, the cost of the basic basket of essential goods stood at 2,520 quetzal per month, whereas the minimum wages for agricultural and non-agricultural workers remained set at 1,158 and 1,190 quetzal per month respectively. UNSITRAGUA also refers to the meeting of the National Wages Commission, held in November 2004, in which it was decided not to recommend an increase of the minimum wage rates despite the calls of the workers’ representatives for a 40 per cent increase of those rates. The Committee recalls that one of the fundamental objectives of minimum wages is to ensure that workers have an income which can provide a satisfactory standard of living for them and their families and therefore minimum rates of pay should preserve their purchasing power in relation to essential needs such as food, clothing, housing, health, education, social security, hygiene and transport or leisure. The Committee wishes to emphasize that a minimum wage system loses much of its relevance if it is out of all relation to the economic and social realities of the country.

2. Moreover, UNSITRAGUA denounces the illegal practices of certain employers who pay sub-minimum wages, and gives the example of coffee plantation female workers and temporary workers performing piece work who are mostly concerned by such practices. The Committee notes, in this respect, that section 103 of the Labour Code requires that minimum wages be fixed in such a manner that the earnings of those remunerated on a piece-work basis or those engaged to perform a specific task are not prejudiced.

3. In addition, UNSITRAGUA refers to the Constitutional Court’s decision to suspend for a period of five months the application of Government Agreement No. 765-2003 setting the minimum wages for 2004. It also indicates that, on 26 October 2004, an agreement was concluded between the President and two employers’ organizations known as VESTEX and AGENXPRONT whereby it was decided not to increase the minimum wages in 2005 and to establish minimum wage rates based on productivity. According to UNSITRAGUA, setting production targets for the payment of minimum wages leads workers to work abnormally long hours while workers who do not manage to meet the target are paid at less than the statutory minimum rate. The trade union organization is of the view that productivity-based minimum wages may only serve employers’ interests and that they break with the idea of fixed, stable and concrete minimum wage rates to be replaced by changeable and indeterminate ones. UNSITRAGUA states that the adoption of productivity as the principal criterion for fixing minimum wages leads to constant and unlimited devaluation of work.

The Committee recalls in this connection that, due to the binding nature of minimum wages, these may not be subject to abatement for whatever reason such as, for instance, the non-fulfilment of production quotas or non-compliance with quality standards. The Committee has consistently pointed out that factors such as the quantity and the quality of the work performed should not affect the right to payment of a minimum wage, which should be the guarantee of a fair remuneration in return for work duly performed during a stated period. For these reasons also, where a minimum wage system is based primarily on piece rates, great care needs to be exercised to ensure that, under normal conditions, workers can earn enough to be able to maintain an adequate standard of living, and that their output, and consequently their earnings, are not unduly limited by conditions independent of their own efforts.

The Committee requests the Government to provide its observations on the matters raised in the above comments.