Individual Case (CAS) - Discussion: 2018, Publication: 107th ILC session (2018)

Minimum Wage Fixing Convention, 1970 (No. 131) - Bolivia (Plurinational State of) (Ratification: 1977)



A Government representative recalled that the essence of the Convention was the protection of workers and that the complaints originated from employers. The Employers were using the Convention to question a successful economic model, in their nostalgia for privileged policies that benefited them, and to endeavour to ensure that the State did not set decent wages for workers. The Government was implementing economic and social policies that protected sectors which had historically been excluded and discriminated against. Dialogue, consultation with the various partners and the quest for consensus were the methods used, in accordance with national and international law. The Convention had been adopted to supplement other instruments intended to protect workers from wages that were unduly low. A policy was being implemented for the gradual and systematic raising of the minimum wage and the complaints of the employers appeared to be directed against social justice. The Preamble to the Convention reaffirmed the role of States in protecting groups of wage-earners who were in a disadvantage position in relation to their employers. The role of the State in the protection of workers was a constitutional mandate, which would not be abandoned on the basis of an inappropriate interpretation of the Convention. The central objective of the Convention was set out in Article 1, which required the establishment of a system of minimum wages which covered all groups of wageearners. The essential characteristic of the Convention was the fixing of the minimum wage, and not necessarily social dialogue, which was a tool for the achievement of that objective. There was a specific Convention on social dialogue, which was not the subject of the present discussion and which had not been ratified by the Government. Article 4(2) of the Convention referred to full consultation in connection with the establishment, operation and modification of wage-fixing machinery, or in other words in the development of the legislative provisions governing the process of the determination of the minimum wage, but not in the annual determination of its level. Since 2006, the Government’s wage policy had been intended to reduce the enormous economic differences and to favour sectors that were traditionally excluded, that is those who earned less, by increasing their wages above the inflation rate, while maintaining the sustainability of public and private investment. That was the premise for the annual increases in wages. In that respect, he emphasized that the legal interpretation of the Convention needed to be more rigorous and not lose sight of the fact that its spirit was the protection of wage-earners in light of the intrinsic asymmetry with employers. Minimum wages were determined within the following institutional framework: (1) article 49 of the Constitution provided that the law shall regulate labour relations, including the determination of general and sectoral minimum wages and wage increases: (2) section 52 of the General Labour Act provided that remuneration or wages shall be fixed by the central Government; and (3) section 8 of Presidential Decree No. 28699 of 1 May 2007 provided that employers and workers may agree on remuneration freely, and that it had to be above the minimum national wage determined by the Government. The institutional framework was therefore established and had its origins in the Political Constitution, which had itself been the subject of consultation with workers, employers and the people as a whole, as it was the product of a Constituent Assembly and a referendum for its approval.

Historically, there had been factors in the relations between employers’ and workers’ organizations which had worked in favour of employers and undermined collective bargaining mechanisms at the sectoral level. That situation obliged workers to have recourse to the State to uphold their claims, including in relation to wages. Since 2006, the Government had been adopting measures with a view to increasing unduly low wages, in full compliance with the spirit of the Convention, and giving effect to the dialogue and consultation mechanisms with the sectors concerned, within the framework of the Constitution and the legislation in force. The Government had quadrupled the minimum wage, which had been US$63 in 2005 (one of the lowest in the region), and was now US$295. Nevertheless, even though it had been quadrupled, the minimum wage continued to be lower than the needs of workers and their families. The wage increase had been determined taking into account the criteria set out in Article 3 of the Convention: (a) the needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits and the relative living standards of other social groups; and (b) economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment. The Government’s wage policy was proportional to economic growth and national production, which had also quadrupled as a result of the economic and social productive and community model implemented. Gross domestic product (GDP) had grown from US$9,568 million in 2005 to US$37 billion in 2017. The increases were not therefore arbitrary, but rises based on a solid and growing economy. The wage increase had also been determined taking into consideration the positions of workers and employers, with which the Government was promoting regular dialogue and consultation, as demonstrated by the repeated round-table meetings established at the highest level of the Government with the representatives of the Confederation of Private Employers of Bolivia (CEPB). The World Bank acknowledged that the country was among the foremost in the region in terms of reducing wage inequalities. In accordance with the Gini labour index, the wage gap over the past ten years had improved from 0.53 per cent to 0.44 per cent. As a result of the economic model, it had been possible to reduce extreme poverty from 38.2 per cent to 17.9 per cent over the period 2005–17. Over 3 million people had escaped poverty and the majority of the population (58 per cent) had an average income which enabled them to live well. The wage policy was generating higher domestic demand, which was also very beneficial for the private sector, in which profits had quadrupled, increasing from Bolivian bolivianos (BOB) 8,663 million in 2006 to BOB27,766 million in 2017. The economic model was based on the following pillars: the nationalization of natural resources and industrialization, the strengthening of domestic demand, the redistribution of wealth and large public investments. Those pillars guaranteed the following results: economic stability, employment generation, the reduction of the unemployment rate, and constant economic growth, which contributed to reducing poverty and the levels of inequality. As demonstrated by the figures, private employers were benefiting greatly from the economic, political and social stability, as well as the legal security guaranteed by the Government since 2006, to make investments and embark upon new initiatives with the security of obtaining optimal results. Employers needed to grant social security and stability to men and women workers, who depended on them, instead of which some of them were organizing the premeditated bankruptcy of enterprises, which they were abandoning. He regretted the baseless accusations of the employers, who were making use of procedural arguments to limit the just and equitable increase in the minimum wage in accordance with the provisions of the Convention, and the decision to include the case in the list for discussion by the Committee. On the contrary, governments should be encouraged to improve the standards of living of their populations in accordance with the objective of the Convention and in light of human rights.

The Employer members thanked the Government for its information. Even though the case was being examined by the Committee for the first time, it was not unconnected with the comments of the Committee of Experts, which had made observations on the subject in 2013, 2014, 2017 and 2018. The Committee of Experts had asked the Government to adopt urgent measures to ensure thorough consultations with the most representative employers’ and workers’ organizations and their direct participation in the minimum wage fixing machinery. They also noted with concern that the CEPB and the International Organisation of Employers (IOE) had been alleging, since 2006, the systematic failure to include employers’ organizations in consultations on minimum wage fixing. This year, the Committee of Experts had recalled once again that the Convention provided for full consultation with the social partners on the establishment, operation and modification of wage-fixing machinery, and that the active participation of workers’ and employers’ organizations was essential to allow optimum consideration of all relevant factors in the national context. There was a need to verify whether the recommendations of the Committee of Experts had been taken into consideration. The Government was a very long way from complying with the Convention, in terms of both wage-fixing machinery and the criteria used for fixing wages. With regard to the former, Article 4 of the Convention established the requirement for consultation with the social partners, in conformity with the most fundamental standards of the ILO, of which tripartite dialogue was a cornerstone. The key features of such dialogue were good faith and the desire to reach consensus. Whenever such consensus was not possible, whoever was responsible for taking a decision must incorporate into it the views of those who had participated in the dialogue. The Convention used the term “full consultation”. The Government therefore needed to make further efforts to facilitate and deepen the dialogue. By stating that the CEPB had not explicitly asked to be part of the decision-making on minimum wage fixing, the Government was disregarding its obligation as the entity responsible for full consultation. The employers had asked to be part of the dialogue on minimum wages, as reflected in the reports of the Committee of Experts. Senior government officials, such as the Minister for Economic Affairs and the Minister for the President’s Office, had declared in recent statements to the local media that employers would not participate in decision-making on minimum wages and that since 2006 it had essentially been government policy to fix wage increases only with the workers. The Government had confirmed that policy to the Committee and was claiming a new reading of the Convention, under which consultation of the social partners on wage adjustments would no longer be valid. The Committee could not accept a government disregarding social dialogue and needed to respond with the same severity in the case of failure to consult employers.

With regard to the failure to comply with the elements that needed to be taken into account to determine minimum wage levels, the Committee of Experts had referred to a statement by the Government that minimum wage fixing took account of inflation, productivity, GDP, GDP per capita, the consumer price index, economic growth, unemployment rates, market fluctuations and the cost of living. Such a statement was inaccurate. There were two benchmarks for wages in Bolivian legislation. First, there was the national minimum wage, which was universal for all workers, without differentiation between groups of wage-earners, which was desirable for economic and legal reasons and was permitted by the Convention. Second, there was the so-called “basic wage” (haber básico), which applied to all workers and could not be less than the national minimum wage. That was fixed through individual or collective bargaining between employers and workers. However, ministerial decisions were issued annually requiring the parties to negotiate increases in the “basic wage” within a set time, otherwise fines or other penalties would be incurred by the employer. Between 2006 and 2018, the national minimum wage had risen by 312 per cent and the “basic wage” by 149 per cent, with both figures being very much higher than aggregate inflation over that period. The national minimum wage was higher than GDP per worker, which meant low productivity per worker. They asked whether the productivity index, enterprise sustainability and the creation of more and better jobs were taken into account in fixing the minimum wage. The Government’s wage policy explained the growing precarity in employment, the increase in unemployment rates and the rise in informality indicators (around 61 per cent of the active population). The percentage of workers being paid a wage lower than the national minimum wage had also risen, precisely because of the increase in informality. For the public sector, there had been a fall in protected employment and a rise in temporary employment. However, they noted that the Government was applying the criteria of the Convention in the public sector, where it assumed the role of employer. To apply wage increases, public enterprises were required to conduct an analysis of net profits and financial resources in each enterprise, with the obligation to demonstrate financial sustainability and the required level of operating profit. In conclusion, the Government was deliberately failing to consult the employers’ organization and to take into account the technical criteria that should provide a basis for minimum wage fixing.

The Worker members said that, in 2017, the national minimum wage had been increased by Presidential Decree No. 3161 of 1 May 2017, taking into account a number of recommendations made by the Bolivian Central of Workers (COB) and, according to information received, socio-economic factors such as inflation, productivity, GDP, GDP per capita, the consumer price index, economic growth, unemployment rates, market fluctuations and the cost of living. The minimum wage now stood at BOL2,060, which was 335 per cent higher than in 2006. Fixing the minimum wage was important for a number of reasons. First, wages represented a crucial source of income for households, and as a result had an enormous influence on the standard of living of the population. Second, they were a source of personal fulfilment. Third, when the State set the minimum wage, it was guaranteeing that workers could cover the essential needs for their survival. The Preamble to the ILO Constitution proclaimed the urgent need to improve working conditions, in particular by guaranteeing an adequate living wage. The minimum wage enabled workers and their families to live in dignity, bearing in mind the level of economic development. Although it was true that economic factors could affect increases in the minimum wage, it should not be forgotten that the minimum wage was essential in avoiding the impact of economic situations on workers and households with the lowest incomes, which were the most vulnerable. The Minimum Wage Fixing Recommendation, 1970 (No. 135), provided that “[m]inimum wage fixing should constitute one element in a policy designed to overcome poverty and to ensure the satisfaction of the needs of all workers”. The fundamental aim of the minimum wage was to provide workers with the necessary social protection in terms of minimum acceptable wage levels.

Nevertheless, as the Committee of Experts had pointed out in its observations, the Convention required full consultations with the representative organizations of employers and workers concerned for the establishment, operation and modification of the machinery by which minimum wages were fixed and periodically adjusted (Article 4(2)). The active participation of those organizations was essential so that all relevant factors in the national context could be taken into account as fully as possible. To that end, the Committee of Experts had firmly urged the Government to take measures without delay, in consultation with the social partners, to guarantee their full and effective participation in the fixing and adjustment of the minimum wage. The minimum wage was one of the most important institutions, and should be fixed through the intervention of governments, in conjunction with workers and employers. It was a public standard aimed at ensuring that wages covered the bare necessities: food, housing, education, social security, recreation and holiday. It should also be a starting point for the setting of basic wages in collective agreements. Fixing the minimum wage also helped to ensure a series of rules of the game that were the same for everyone. The Worker members welcomed the fact that, in fixing the minimum wage, the Government’s intention had been to create sustainable wage policies in line with the United Nations 2030 Agenda for Sustainable Development. The issues of wage increases and unequal wages were placed high on that Agenda. Improving wages and enhancing opportunities for decent work were vital to eradicating poverty and reducing the inequality that existed in the country. The Worker members emphasized the importance of social dialogue and consultation with the social partners prior to fixing the minimum wage. Social dialogue should be institutionalized, with permanent tripartite structures to discuss public policy and a programmatic agenda to respond to the problems that affected society. However, once social dialogue had been institutionalized, good faith, input and responsibility were needed. In the end, the institutionalization of social dialogue should serve to: (1) generate sustainable and inclusive development to improve the quality of life and social conditions; (2) give workers greater participation in the distribution of wealth in order to eliminate present inequalities; (3) promote decent work and wage levels that allowed people to live in dignity, with freedom of association and strengthened collective bargaining; and (4) reduce the gulf between extreme poverty and concentrated wealth, with a view to social inclusion. Without adequate wages and labour protection, society would be neither inclusive nor would it guarantee social cohesion.

The Employer member of the Plurinational State of Bolivia emphasized that in recent years Bolivian employers had been complaining to the ILO at the Government’s systematic failure to give effect to the Convention since 2006 in relation to the requirement to hold full consultations with employers’ organizations. The Government’s wage policy had resulted in negative economic consequences for certain enterprises, which had neither effective mechanisms to control the legality of Government action, nor the legal security to restrain its conduct. The examination of the case by the Committee raised the expectation that, in an international forum, the Government could be called upon to reflect on the inclusion of all the partners in fixing the minimum wage. Articles 1 and 4 of the Convention established the requirement for full consultation with representative organizations of workers, as well as employers, in establishing the minimum wage system and, where appropriate, with groups of wage-earners to whom the system would apply. Article 3 of the Convention also set out the criteria to be taken into account in the fixing of minimum wage levels. With regard to full consultation, despite the complaints and comments that the CEPB had made repeatedly in recent years, the Government had made no changes. It had maintained its policy of removing employers’ organizations entirely from participation and consultation. The Government had confined itself to holding meetings exclusively with workers’ organizations, led by the COB. At no point had the Government benefited from the views, let alone the approval, of the CEPB, which had had to settle for finding out the decisions made from the national press and from the publication of legal bulletins. Moreover, Government representatives had, on repeated occasions, publicly refused absolutely to accept the participation of private enterprises in any kind of discussion on wage fixing. Among other public statements made on social media by Ministers of State, the Minister for the Office of the President had indicated that wages would be fixed only with workers, adding that he was part of a workers’ government, not the entrepreneurial class.

Since 2006, not only had employers been refused permission to participate in wage fixing, but priority had been given to an inequitable system of participation, as the COB had been the only body asked to endorse wage increases. Fixing and increasing minimum wages with workers’ representatives alone completely undermined the spirit of social dialogue and tripartism promoted by the ILO for the formulation of labour policies. Consultations were also required on the criteria to be taken into account in fixing minimum wage levels. Such consultations served to validate social dialogue as an appropriate and legitimate mechanism for the establishment of minimum wage fixing machinery. The Government had introduced disproportionate increases that were at odds with the economic situation. Since 2006, the national minimum wage had risen by 312 per cent on aggregate, as the combined result of annual increases. Those increases greatly exceeded annual inflation rates and ignored the existence of other economic factors, such as the requirements of economic development, productivity levels, increased rates of better decent work, the importance of achieving and maintaining high levels of employment, the preservation of decent work and the sustainability of enterprises. Moreover, in fixing wage increases, the Government was not taking into account the ever greater informality on the labour market. Employers were also being required to negotiate agreements for submission to the Ministry of Labour within a limited period of time, under penalty of fines or other economic penalties. Some union leaders had used that situation to force employers to offer greater increases, in return for observing the formality of signing agreements. Finally, he called on the Committee to give its view on the complaint submitted and urged the Government to comply with all the terms of the Convention so as to safeguard and expand the market for decent work in the country.

The Worker member of the Plurinational State of Bolivia said that the Workers had been committed to complying with the Convention since its ratification. One of the reasons that justified the recent wage increases was that, since the 1980s, there had been a freeze in minimum wages, which had been partly due to the adoption of measures to privatize various State enterprises, including certain mining and cement enterprises. The freeze in minimum wages had ended in 2005, which meant that workers had suffered for many years. With regard to the application of the Convention, section 10 of the statute of the CEPB indicated that it “shall not assume the legal representation of its members, for the negotiation or settlement of specific and individual worker–employer disputes, and consequently had no legal status for summonses and notifications, or to accept complaints or lists of claims from any labour sector, which involve or are addressed to its entities, or are made though the Confederation”. For many years, workers had been prevented from participating in social dialogue at the same level as the Government and employers. Progress in the participation of workers had only been made recently, as workers now even participated in the auditing of state enterprises in strategic sectors. However, in the case of certain private enterprises, a significant number of workers (over 400) had seen their work affected, as they had been required to take collective holidays or had been dismissed on the grounds that the enterprises were in deficit, or were unable to pay minimum wages or increase wages. He suggested that legislation could be adopted for the creation of social enterprises so that workers could take over the management of several enterprises that had declared to be in deficit. Currently, certain enterprises, for example in the mining sector, were managed by the workers themselves, who had technical, economic and financial autonomy. In such enterprises, wages might or might not be increased, as they were subject to the profits made by the enterprise, or in other words, if there were no profits, there would be no wage increases. In that regard, the workers considered that job stability and the sustainability of workplaces were essential.

The Government member of Paraguay speaking on behalf of the group of Latin American and Caribbean countries (GRULAC), thanked the Government representative for the information provided. The Convention had been adopted taking into consideration the need to further protect workers against unduly low remuneration. He also thanked the Government for the efforts made to take into account the positions of both social partners when fixing the minimum wage. As stated in the 2030 Agenda for Sustainable Development, sustained, inclusive and sustainable economic growth was essential to achieve prosperity, which was only possible if wealth was shared and action taken to combat income inequality. To that end, the social stability of workers was an essential concern for the Government. He also welcomed the information provided on the progress made in reducing wage inequality through a real increase in the minimum wage. He encouraged the Government to continue its efforts to strengthen consultation mechanisms with the social partners.

The Employer member of Uruguay noted that the Government had clearly and systematically failed to comply with the Convention. The Government established minimum wages through negotiations with workers, without consulting the most representative organizations of employers. Beyond any inconsistencies regarding the increases in and methods used to fix minimum wages, the ILO needed to be alert to situations in which the social partners could not express their opinions. That was a serious situation in which the ILO could achieve its full potential by providing assistance through its regional offices to achieve a reasonable balance in labour relations. Policies which were not in conformity with the fundamental principles of work led to abuses that could not be tolerated, regardless of the social sector driving them. The ILO had all the tools to collaborate with the Government with a view to contributing to the strengthening of a more harmonious system of labour relations in which the employers could be heard. It was crucial to avoid violations of fundamental labour principles.

The Worker member of Uruguay recalled that the ILO had been born out of the fact that only in such an institution could everyone be equal. Minimum wages guaranteed that those who were the weakest had a wage floor below which they could not be paid. On behalf of the trade union movement in his country, he offered cooperation and assistance to the Government and trade union movement of the Plurinational State of Bolivia.

The Government member of the Bolivarian Republic of Venezuela endorsed the statement by GRULAC. The Government’s objective was to protect workers against excessively low pay with a view to eliminating poverty and ensuring that workers could cover their needs and those of their families, taking into account economic factors. In conformity with the Convention, the minimum wage had to be set in consultation with the social partners. Even if the consultations were not binding, they contributed to labour peace and helped the Government to take the appropriate decisions, as outlined in the comments of the Committee of Experts. In setting the minimum wage and subsequent increases, the Government took into account socio-economic factors, such as inflation, productivity, GDP, economic growth, market fluctuations and the cost of living. He encouraged the Government to strengthen consultation mechanisms with the social partners, which would contribute to labour peace and allow for wage increases that benefited workers and the world of work.

The Worker member of El Salvador indicated that laws in every country of the world required governments to maintain wage policies that were in line with the needs of the population and with macroeconomic factors. That involved striking a balance between the wage demands of workers and their families and the vision of some employers that refused increases in the minimum wage on the pretext that companies did not have the capacity to support such rises. The term minimum wage meant the minimum required to eat, dress and keep poverty and marginalization at bay. He asked how it would be possible to build a decent society if workers were forced to simply accept the minimum available through the system. Unions needed to be organized to ensure that workers and governments responded to demands for higher salaries in light of the cost of living. The Government’s decision to increase the minimum wage took into account technical aspects of the economy, such as economic growth, the claims of workers and therefore the dynamics of social dialogue. The index of minimum wages in Latin America showed that several countries with weaker economies than that of Bolivia, including Guatemala, Honduras, El Salvador, Costa Rica and Panama, had better wage conditions, for which their governments deserved credit and recognition. The economy of the Plurinational State of Bolivia was making progress in terms of the consumption and demand for products and services. However, a great deal remained to be done in relation to wages and decent work.

The Government member of Egypt thanked the Government for the information provided on the measures taken to implement the Convention. She praised the efforts made by the Government to increase wages, close the economic gaps, ensure the sustainability of investments, boost investment in the public sector and increase resources in a fair manner. She encouraged the Government to commit fully and to engage in dialogue with the social partners.

The Government member of Ecuador agreed with the statement made by GRULAC and welcomed the information provided by the Government. Achieving sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all required great resolve and the commitment of the different social partners and the Government. Constructive tripartite social dialogue would facilitate a consensus based on respect for human beings. She noted the Government’s efforts to achieve agreement with the social partners in fixing the minimum wage. She also welcomed the progress made in reducing wage inequality through a real increase in the minimum wage. In conclusion, she encouraged the Government to continue its efforts to strengthen consultation mechanisms with the social partners.

The Government member of India thanked the Government for its commitment to fulfil its international obligations and for the information provided on the positive steps undertaken to reduce wage gaps and levels of poverty and to raise standards of living. The participation of the relevant social partners, and especially those representing the most vulnerable, would contribute to the achievement of the objective of the Convention.

The Government member of Cuba endorsing the statement by GRULAC, considered that the Conference Committee, when examining the case, should take into account the information provided by the Government on compliance with the Convention. The Government had increased the minimum wage in recent years in proportion with economic growth and productivity in the country. That had been achieved through a process that took into account the opinions of the social partners, in line with the institutional framework established by law. She also praised the Government as one of the first in the region to reduce wage inequality and other types of inequality, thereby facilitating the achievement of social justice. The Government was not only in compliance with both the procedural aspects of the Convention, but also with its objectives to improve living standards for workers and the population.

The Employer member of Honduras drew attention to the fact that the Government had increased the minimum wage without social dialogue and without consulting the employers. After the CEPB had received no response to its request to participate in the consultations, Government ministers had stated that, as a government of workers, it only needed to consult the workers. Employers did not know whether the criteria set out in Article 3 of the Convention had been taken into account in the Government’s negotiations with the COB, namely economic productivity factors, when deciding on increases in the minimum wage. He also emphasized that, in addition to imposing an increase in the minimum wage, they were also required to conclude wage agreements with trade unions within a limited period of time under threat of fines and penalties. The exclusion of employers from minimum wage fixing violated the provisions of the Convention and the principles of social dialogue and tripartism, which were the cornerstone of the ILO. The Committee must urge the Government to comply with the Convention and to allow the employers to participate in consultations.

The Government member of Uruguay noted with special interest the specific characteristics of ensuring compliance with the Convention in the region where, in many cases, he considered that trade unions did not have sufficient training, capacity or support to fully develop procedures for the setting of minimum wages. In that regard, he highlighted the recent good practice in his country in relation to social dialogue, tripartism, consultation and collective bargaining. The Government of Uruguay was at the disposal of the Government to develop a cooperation plan aimed at strengthening and developing existing mechanisms in the country. Finally, he encouraged the Government to continue its efforts to develop social dialogue and tripartism.

The Government member of Algeria expressed support for the Government, which had confirmed its commitment to implementing the Convention through the adoption of measures aimed at: (i) increasing minimum wages and reducing wage inequalities to respond to the needs of workers and their families; (ii) fixing minimum wages in consultation with employers’ and workers’ representatives; and (iii) encouraging dialogue and consultation, as well as ensuring compliance with the minimum wage rates that had been fixed. The Government was engaged in a process of economic reform and was addressing a number of priorities in the areas of social justice and fundamental rights. The setting of minimum wages in proportion to economic growth and productivity was in conformity with the provisions of the Convention. The Government had taken measures aimed at social cohesion, reduced unemployment and inclusive growth. He invited the Committee to take the Government’s detailed replies into consideration.

An observer representing the International Organisation of Employers (IOE) emphasized the importance of the case. The Government had shown little respect for the private sector and the creators of decent work. It was not only a matter of non-compliance with the requirement of consultation for the fixing of minimum wages, in accordance with the Convention, or an obligation arising out of a technical provision of a Convention. It was a case of a serious failure to comply with the fundamental principles that had inspired the creation of the ILO. Public statements by senior leaders conveyed unacceptable contempt for employers’ organizations. Such a worrying attitude was dangerously close to harassment of employers and an attack on freedom of enterprise and decent work. He called for these elements to be taken into account when drafting the conclusions on the case.

The Government member of Bangladesh thanked the Government for the information provided and welcomed the efforts made to protect and promote workers’ rights, including through increasing minimum wages since 2005. The Government had taken into account the socio-economic context as well as the position of both the social partners. Considering its compliance with the objective and procedures required by the Convention, it would be advisable to close the case.

The Government member of Iraq recalled that the Convention established that minimum wages had to be set in consultation with the social partners. While acknowledging that this could be difficult to implement in practice, he indicated that it appeared that in this case, the Government had taken into account the reservations of the employers.

The Employer member of Mexico noted with concern the Government’s statement, as it recognized the violation of the Convention which it had ratified and under which it was bound, and that it had not fully consulted, and did not intend to fully consult the most representative organizations in the near future. The Government had indicated that its actions were based on the fact that the law allowed it to determine minimum wage levels unilaterally. That was alarming, not only because it breached one of the obligations of the Convention, but it also undermined basic ILO principles, including social dialogue and full and effective consultation, which were the basis of relations between employers, workers and governments. However, it was reassuring to hear the Worker members reaffirm the importance of the institutionalization of the consultations to which the Convention referred. Social dialogue was also essential in labour relations because it allowed agreements to be made and prevented the polarization of the partners. Social dialogue was recognized as one of the four strategic objectives in the ILO Declaration on Social Justice for a Fair Globalization, 2008. No State could be allowed to knowingly and deliberately fail to engage in from the consultations that it was required to hold on the pretext that it was acting in the interests of one of the partners in the labour relationship. There was therefore an issue of procedure and legal conformity that needed to be defended, as those principles were non-negotiable.

The Government representative reiterated that the essence of the Convention was the creation of conditions of equality and the eradication of poverty, and that the Government was mindful of those fundamental aspects. The complaint was groundless because the Government constantly held consultations with all economic actors in formulating its economic policy, including its wage policy, and private enterprise benefited from forums for dialogue at the highest level, sometimes even with the President. Fixing the minimum wage served as a means of redistributing wealth, obliging entrepreneurs to share their profits. For the first time in history, their profits had increased four-fold. The wage policy had enabled millions of Bolivian citizens to escape from extreme poverty. The Government would continue to uphold the mechanisms provided for in law for the fixing of the minimum wage. He considered the claim that there was a policy of destroying the private sector to be untrue and unfounded, as permanent consultation mechanisms existed with private enterprise at the highest level. Entrepreneurs had been consulted constantly about a range of national economic issues. Moreover, agreements had been signed with the Government to maintain economic stability, increase production and protect jobs. With regard to wage bargaining, he referred to the information sent to the Committee of Experts. Both private entrepreneurs and workers published proposals concerning the minimum wage. For instance, in 2017, the CEBP had suggested a freeze in the minimum wage and a 3 per cent increase in the basic wage at a meeting with the Ministers of the Economy and of Planning. For its part, the COB had proposed a 10 per cent increase in the basic wage and a 15 per cent increase in the national minimum wage. Taking into account the positions of both parties, as well as technical and economic considerations, the Government had decided on a 3 per cent increase in the national minimum wage and a 5.5 per cent increase in the basic wage. He objected to the claim that wage increases were a threat to private enterprise. The Government was safeguarding economic and legal stability, as shown by the increase in the number of private enterprises from around 65,000 in 2005 to 295,000 in 2017, with a 4 per cent increase from 2016 to 2017. The number of salaried workers had tripled. In 2005, there had been only just over 500,000, but now there were more than 1.8 million. That situation was also reflected in expanded social security coverage and the growth of decent work, which was ignored by employers. The Declaration of Philadelphia established the fundamental principle that poverty anywhere constituted a danger to prosperity everywhere, giving rise to the obligation to promote better standards of living. While it respected and valued the contribution that the private sector made to the economy, the Government would hold fast to its decision to reduce poverty and pursue economic, political and social equality for the majority of Bolivian citizens. He therefore reiterated that the complaint was groundless and was intended to call into question the Government’s policy of social justice and wealth redistribution, which it did not intend to renounce.

The Worker members thanking the Government for the information provided, reiterated that social dialogue was the best tool for growth with equality. It allowed governments and the social partners to develop a common strategy to promote decent work, and consequently, inclusion and social justice. Social dialogue was of critical importance in the formulation of policies designed to respond to domestic needs. As stated by the Committee of Experts in its previous observations, the minimum wage system provided for by the Convention was intended to serve as a social protection measure to reduce poverty, by guaranteeing decent levels of income, particularly for unskilled and low-paid workers. It was intended to protect workers from unduly low wages. As emphasized within the Organization, the existence of a minimum wage helped to ensure that everyone benefited from a fair distribution of the fruits of progress, and that all individuals who were in employment and needed such protection were paid a minimum living wage. The Preamble to Recommendation No. 135, which made particular reference to developing countries, emphasized the importance of adopting criteria to ensure that minimum wage systems were an effective instrument of social protection for the promotion of economic and social development strategies. Minimum wages must also be an integral part of policies to reduce poverty and inequality, including the wage gap that existed between men and women. In that respect, they welcomed the fact that the Government was implementing wage policies intended to preserve the real value of remuneration for workers with the lowest incomes, and which ensured a fair distribution, reduced excessive inequalities in wages and income, and reaffirmed consumption as a fundamental pillar of a sustainable economy. The setting of the minimum wage, which was contested by Bolivian employers, had taken into account economic factors of interest for employers, including productivity, GDP, economic growth and market fluctuations. Nevertheless, the Government was responsible for ensuring compliance with the Convention and they therefore urged it to do so in a correct and comprehensive manner, including through the adoption of objective quantitative methods for the determination of the minimum wage which ensured the active participation of the most representative organizations of employers and workers. The requirement to establish procedures that ensured effective consultation with employer and worker representatives was inherent to the ILO standards system as a whole. The focal point of the system was the Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144), which the country had also ratified. In conclusion, the Worker members called on the Government to guarantee the full and effective participation of the social partners in the setting and adjustment of the minimum wage.

The Employer members expressed appreciation of the statements of the members of the Committee and said that emphasis should be placed on the extent to which the positions of the Worker, Employer and many Government members who had spoken during the discussion coincided with regard to the importance of social dialogue and consultation of the social partners on the subject of minimum wages. Another area of agreement was that good faith should be demonstrated by all parties in the conduct of dialogue. Improving the income and living standards of workers was a shared concern for workers and employers and was of strategic importance for the goal of the elimination of poverty. That common goal could not be achieved without taking into account the needs of some and the possibilities of others, and of course the economic circumstances of the country. Discarding both viewpoints signified a clear loss for society as a whole, while ignoring just one of the parties constituted serious discrimination and unacceptable bias. The intention to improve workers’ income would be of little use if it resulted in the growth of the informal economy, as that would mean that incomes improved for a few people, while informality increased for many more, who would lose both income and social and employment safeguards. Moreover, in reply to the statement made by the Worker member of the Plurinational State of Bolivia regarding the prohibition in the statutes of the CEPB concerning the scope of its activities, the Employer members wished to clarify that prohibition related to intervention in individual labour disputes of its members. They also emphasized that the case under discussion was also a source of concern for workers and governments who were advocating the implementation of democratic methods to govern the destiny of their nations. It placed a question mark over social dialogue, which was one of the fundamental principles of the ILO. At present, Bolivian employers were being silenced by the Government, which had indicated that it would not comply with the Convention that it had ratified. In future, it might be the workers or employers of some other country who would be silenced. The Committee should not let a situation of this kind go unnoticed, as it would undermine the credibility of the ILO supervisory system. They reiterated their concern at the statement made by the Government representative, as there was no doubt that the Government’s conduct would not change and that it was in violation of the Convention. It was essential for the Government, with the legitimate desire to convene and fully consult the social partners, to review the wage-fixing machinery. For those reasons, the Employer members called for the gravity of the situation to be emphasized in the conclusions to the case. They requested the Committee to make an urgent appeal to the Government: (1) to hold full consultations with the social partners on wage fixing and to report on those consultations to the Committee of Experts before its 2018 session; and (2) to accept a direct contacts mission and ILO technical assistance. Lastly, emphasizing the seriousness of the case, they called for the conclusions to be included in a special paragraph of the Committee’s report.

Conclusions

The Committee took note of the information provided by the Government representative and the discussion that followed.

The Committee noted with concern the dysfunctional operation of social dialogue and the current non-compliance with the provisions of the Convention.

The Committee recalled the importance of full consultation with the representative organizations of employers and workers concerned, as well as the elements to be taken into consideration in determining the level of minimum wages as set forth in Article 3 of the Convention.

Taking into account the Government’s submissions and the discussion that followed, the Committee urged the Government without delay to:

- carry out full consultations in good faith with the most representative employers’ and workers’ organizations with regard to minimum wage setting;

- take into account when determining the level of the minimum wage the needs of workers and their families as well as economic factors as set out in Article 3 of the Convention;

- avail itself of ILO technical assistance to ensure without delay compliance with the Convention in law and practice; and

- accept an ILO direct contacts mission.

The Committee recommended the Government to submit a detailed report to the Committee of Experts by 1 September 2018 on the progress made in implementing these recommendations.

The Government representative thanked the Committee for its work. He noted the conclusions with concern, finding that they were immeasurable and did not reflect the discussion. The conclusions did not explain which provisions of the Convention were the subject of non-compliance. Social dialogue was said to be dysfunctional without specifying the aspects which were not working. With regard to Article 3 of the Convention, he reiterated that this Article was complied with through the institutional wage-fixing machinery that derived not only from the law and agreements but also from the State’s own Political Constitution, which had been the result of a Constituent Assembly and a referendum to approve it. That information supplied by the Government had also not been taken into consideration. The Committee must adopt technical conclusions and take account of the arguments put forward by the Government. It was regrettable that a Convention that claimed to protect workers’ rights had been manipulated. Proof of that manipulation lay in the fact that the conclusions did not refer to the figures presented by the Government. He said that the Government would analyse the conclusions and consider how to implement them.