Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

Minimum Wage-Fixing Machinery Convention, 1928 (No. 26) - Bulgaria (Ratification: 1935)

Articles 1 and 3 of the Convention. Nature, form and method of operation of minimum wage fixing machinery. The Committee recalls its previous comment in which it referred to the role of the National Council for Tripartite Cooperation (NCTC) in the determination of the national minimum wage and the efforts to put in place a mechanism for objectively reviewing changes in national economic conditions and adjusting the minimum wage accordingly. In its last report, the Government does not indicate any progress in the process of revision of the method for fixing the statutory minimum wage which now stands at 270 Bulgaria lev (BGN) (approximately €138) per month. The Government provides, however, extensive information on the system of minimum social security thresholds introduced in 2003, according to which employers are obliged to pay social security contributions for their employees on the basis of a sum which may not be lower than the minimum insurable income determined annually by the State Public Social Security Budget Act. The Government states that the minimum social security threshold, which in 2010 was on average BGN402 (approximately €206) per month, principally serves to improve the financial stability of the public social security institutions by fighting the so-called “black cash” and stopping employers paying contributions on the basis of the national minimum wage rather than the worker’s true pay. The Government further states that the minimum social security thresholds act as sectoral minimum wages for different branches and occupational categories. The Committee understands that in 2012 minimum social security thresholds have been negotiated for 50 of Bulgaria’s 85 employment sectors resulting in an average increase of seven per cent and that if thresholds could not be agreed in the remaining 35 sectors, the average increase would normally be extended to all industries.

In this connection, the Committee notes the comments of the Confederation of Independent Trade Unions (CITUB) according to which the Ordinance on wage determination of 1991 is outdated while the current legislation sets out no clear methodology for establishing minimum wage rates. According to the CITUB, it may be true that the inter-professional national minimum wage is fixed by the Government after consultations with the social partners but it does not result from the implementation of any negotiated, agreed and objective criteria (for instance, inflation, poverty line, average wage, purchasing power). In addition, the CITUB refers to an initiative launched in 2010 for improving the method for fixing the national minimum wage on the basis of social and economic parameters which, however, led to no results thus confirming the need for a very ambitious program for the implementation of the requirements of this Convention. With respect to minimum social security thresholds, the CITUB considers that these negotiated rates play in fact the role of minimum wages only when there is agreement between trade unions and employers in a specific sector but this is far from being a regular process following an established methodology and criteria.

The Committee is fully aware of the Government’s intention to fight against the widespread practice of so-called “envelope wages” by fixing and annually readjusting the amount of minimum insurable earnings by sector. It observes, however, that the system of minimum social security thresholds by its nature, method of operation and objective, is very different from the minimum wage fixing system envisaged by the Convention, namely a process for determining and periodically reviewing, in full consultation with employers’ and workers’ organizations, and taking into account socio-economic indicators, and decent wage levels for low-skilled workers. The Committee understands that the statutory minimum wage is only about half of the monthly amount deemed by the National Statistical Institute as necessary for an individual to survive in normal conditions. It also understands that, according to some estimates, the minimum wage, which is the lowest among EU Member States, is no longer sufficient to maintain a full-time worker above the official poverty line. The Committee accordingly requests the Government to pursue its efforts for reforming, in full consultation with the social partners, the method for establishing and readjusting from time to time the national minimum wage based on objective indicators and benchmarks with a view to ensuring a decent living standard for low-paid workers. The Committee would appreciate receiving up-to-date information on the content and outcome of any tripartite consultations undertaken to this end as well as any comments the Government may wish to make in response to the observations of the CITUB.

Finally, the Committee recalls that, following the recommendations of the Working Party on Policy regarding the Revision of Standards (GB.283/LILS/WP/PRS/1/2, paragraphs 19, 40), the ILO Governing Body has decided that Convention No. 26 is among those instruments which may no longer be fully up to date but remain relevant in certain respects. The Committee therefore invites the Government to consider the possibility of ratifying the Minimum Wage Fixing Convention, 1970 (No. 131) which marks certain advances compared to older instruments on minimum wage fixing, for instance, as regards its broader scope of application, the requirement for a comprehensive minimum wage system, and the enumeration of the criteria for the determination of minimum wage levels. The Committee requests the Government to keep the Office informed of any decision taken or envisaged in this regard.