Observation (CEACR) - adopted 2008, published 98th ILC session (2009)

Minimum Wage Fixing Convention, 1970 (No. 131) - Nicaragua (Ratification: 1976)

Articles 1 and 3 of the Convention. System of minimum wages and the workers’ basic needs. The Committee notes the detailed information provided by the Government in reply to the comments made by the Trade Union Workers’ Confederation–“José Benito Escobar” (CST–JBE), the National Union of Employees and the Sandinista Workers’ Confederation with regard to the implementation of the Minimum Wage Act No. 129 of 1991 and the falling purchasing power of minimum pay rates. The Government explains the structure and function of the system of sectoral minimum wages based on the concept of a “basic family basket” consisting of 53 consumer goods (food, household goods and clothing), which was first established in 1988, and is now reflected in section 7 of the Minimum Wage Act. According to the statistical information provided by the Government, minimum monthly wages for key economic sectors were last revised in June 2007 and range from 1,025 cordobas (NIO) (approximately US$56) in agriculture to NIO2,381 (approximately US$130) in finance and the construction industry, whereas the monthly needs of an urban family for a basic basket of goods were estimated in April 2007 at NIO3,569 (approximately US$190). According to the same figures, current minimum wage rates cover between 28 and 66 per cent of the cost of the “basic family basket”. Recalling section 2 of the Minimum Wage Act which defines the minimum wage as the regular remuneration that satisfies the worker’s basic material, moral and cultural needs, and also recalling that the fundamental purpose of minimum wage fixing is to overcome poverty and to ensure a decent standard of living for low-paid workers, the Committee hopes that the Government will take the necessary measures to fully apply the national minimum wage legislation and to ensure that minimum wages maintain an acceptable purchasing power in relation to a basic basket of essential consumer goods.

Article 4. Consultation and participation of employers’ and workers’ organizations. The Committee recalls that in their joint communication, the National Union of Employees and the Sandinista Workers’ Confederation denounced the absence of any real and effective participation of workers’ representatives in the consultation process while the CST–JBE pointed out that contrary to the clear requirement of the national legislation, minimum wage levels were not readjusted once every six months. In its reply, the Government merely indicates that in the last ten years minimum wages had been reviewed annually without providing any further particulars on the institutional and practical arrangements guaranteeing the genuine participation of the social partners in the operation of the minimum wage fixing machinery. Recalling that under section 4 of the Minimum Wage Act, minimum wages have to be adjusted at least once every six months, taking into account the special characteristics of each professional category, region and economic sector, the Committee hopes that the Government will take appropriate action so that there is no inconsistency in national law and practice as regards the periodicity of the revision of minimum wage rates. In addition, the Committee asks the Government to provide additional explanations on the function, composition and rules of procedure of the National Minimum Wage Commission in the light of the observations made by the workers’ organizations mentioned above.