Protection of Workers' Claims (Employer's Insolvency) Convention, 1992 (No. 173) - Armenia (Ratification: 2005)

Direct Request (CEACR) - adopted 2017, published 107th ILC session (2018)

In order to provide a comprehensive view of the issues relating to the application of the ratified Conventions on wages, Convention No. 131 (minimum wage) and Conventions Nos 95 and 173 (protection of wages), the Committee considers it appropriate to examine them together.

The Committee notes the observations of the Confederations of Trade Unions of Armenia (CTUA) on Convention No. 131, Convention No. 95 and Convention No. 173, communicated with the Government’s reports.

Minimum wage

Minimum Wage Fixing Convention, 1970 (No. 131)

Articles 3 and 4 of the Convention. Criteria for the determination of the minimum wage level and consultations for the operation and modification of the system of minimum wage. The Committee notes that, in reply to previous observations of the Republican Union of Employers of Armenia (RUEA) and the International Organisation of Employers (IOE) concerning the absence of consideration of economic factors in the determination of the minimum wage level and the absence of full consultation of the employers’ organizations, the Government indicates that, following the adoption of the National Collective Agreement for 2015–18 by the Republican Tripartite Commission, a new methodology for the determination of the minimum wage has been developed in consultation with the CTUA and the RUEA. The Committee notes that the methodology transmitted by the Government in its report takes into account the criteria listed in Article 3. It also notes the Government’s indication that the draft modifications of the minimum wage level are communicated to the social partners for comments. Finally, it notes that, following a request from the Government in May 2017, the country is receiving technical assistance from the Office on the application of the Convention. The Committee requests the Government to provide information on developments in this respect.

Informal economy. In its observations, the CTUA indicates that the methodology for the determination of the minimum wage does not address the extensive problem of the informal economy. The Committee requests the Government to provide its comments in this respect.

Protection of wages

Protection of Wages Convention, 1949 (No. 95)

Article 2 of the Convention. Application to public officials and public servants. The Committee notes that section 181 of the Labour Code provides that the procedures and conditions of remuneration of public officials and public servants shall be prescribed by law. The Committee also notes the adoption of Law HO-157-N of 12 December 2013 on the remuneration of persons holding public offices, which is not available in English. The Committee therefore requests the Government to indicate whether provisions of this Law ensure that public officials and public servants benefit from the protection of the Convention, and if this is not the case, how effect is given to the Convention for this category of workers.

Article 3(1). Prohibition of payment in a form other than legal tender. The Committee notes that pursuant to section 192(2) of the Labour Code, the payment of wages in the form of securities or commitments is prohibited, except in the cases prescribed by law. The Committee requests the Government to provide information on the cases, if any, in which the law authorizes the payment of wages in the form of securities or commitments.

Articles 6 and 7. Freedom of workers to dispose of their wages. The Committee notes the Government’s indication that these Articles of the Convention are directly applicable to the national legal order by virtue of the ratification of the Convention.

Article 14(a). Information of workers in cases of changes in their wages. The Committee notes that section 194 of the Labour Code – pursuant to which the employer was requested to notify the workers in writing before changes in their conditions or remuneration occurred as a result of changes in the law or in collective agreements – was repealed by Law HO-96-N of 22 June 2015. Therefore, the Committee requests the Government to provide information on whether measures have been taken to ensure that workers are informed in cases of changes in their wages, in accordance with Article 14(a) of the Convention.

Article 15(d). Wage records. In its previous comments, the Committee requested the Government to adopt measures to ensure that adequate wage records are maintained in an approved form and manner. It notes the information provided by the Government that under Government Decision No. 1676-N, workers may request an excerpt from their individual account in the database of the Personal Registration of Income Tax and Social Payments. These excerpts include the information that employers are required to provide to the tax authorities on the workers’ income, and on the tax and social contributions applied. Recalling that the maintenance of wage records also serves to facilitate the work of labour inspectors, the Committee requests the Government to indicate whether and how labour inspectors have access to wage records.

Protection of Workers’ Claims (Employer’s Insolvency) Convention, 1992 (No. 173)

Article 6 of the Convention. Protection of workers’ claims by means of a privilege. In its previous comments, the Committee requested the Government to clarify whether the privilege for wage claims provided for under the Bankruptcy Act of 25 December 2006 covered all the claims listed under Article 6. The Committee takes note of the Government’s indication that the list of claims covered by the privilege is found in Government Decision No. 853-N of 8 August 2013, which includes all the claims listed in Article 6.

Articles 9–13. Protection of workers’ claims by means of a guarantee institution. In its previous comments, the Committee requested the Government to provide information on the progress made for the establishment of a wage guarantee institution. In its observations, the CTUA indicates that the absence of a wage guarantee institution increases poverty and fosters the development of the informal economy. The Committee takes note of the Government’s indication that the establishment of a wage guarantee institution would be inappropriate under the country’s current phase of socio-economic development, as it would excessively burden the employers’ financial capacity and undermine employment creation. The Committee invites the Government to take advantage of the technical assistance that the country is receiving from the Office in order to make progress towards the creation of a wage guarantee institution, in accordance with the Convention. It requests the Government to provide information on progress made in this respect.

Enforcement

Sanctions and labour inspection. With reference to its comments under the Labour Inspection Convention, 1947 (No. 81), the Committee requests the Government to provide specific information on the measures taken to inspect compliance with the national provisions on minimum wage and protection of wages, and on the sanctions adopted in cases where violations have been identified, if any. It also requests the Government to provide information on the provisions of the national legislation which contain the possible sanctions in this respect.

Direct Request (CEACR) - adopted 2011, published 101st ILC session (2012)

Article 6 of the Convention. Protection of workers’ claims by means of a privilege. Further to its previous comment, the Committee notes the Government’s reference to several legal texts that seem to suggest that the term “wages” includes also holiday pay and sick-leave pay. The Committee observes, however, that whereas section 82(1)(c) of the Bankruptcy Act of 2006 refers generally to claims arising out of an employment contract, which may thus be deemed to include claims for holiday pay or claims for other type of paid absence, section 83 of the same Act refers to other salary-related claims. The Committee therefore considers that in the interest of legal clarity, the types of workers’ claims and the conditions and the limits within which such claims are granted preferential treatment should be clearly set out in the relevant provisions of bankruptcy legislation. The Committee accordingly requests the Government to further clarify the respective wage claims protected under section 82(1)(c) and (h) of the Bankruptcy Act. It also invites the Government to consider the possibility of specifying the coverage of the privilege along the terms prescribed by Article 6 of the Convention.

Articles 9–13. Protection of workers’ claims by a guarantee institution. The Committee notes the Government’s indication that consultations have been launched with a view to establishing a wage guarantee institution. The Committee also notes, however, the comments of the Confederation of Trade Unions of Armenia according to which no such consultations have as yet been initiated. Recalling that the Government may draw upon the technical assistance of the Office, if it so wishes, the Committee requests the Government to keep the Office informed of any progress made in the process of setting up a wage guarantee institution in accordance with the provisions of Part III of the Convention.

Direct Request (CEACR) - adopted 2010, published 100th ILC session (2011)

Article 6 of the Convention. Protection of workers’ claims by means of a privilege. The Committee notes the first report on the application of the Convention, in particular the Government’s reference to section 82 of the Bankruptcy Law of 25 December 2005 which grants third rank of preference in the order of distribution to “claims arising from labour contract but not more than during six months preceding the moment of recognizing the debtor as bankrupt”. The Committee would appreciate receiving a copy of the Bankruptcy Law currently in force. In addition, the Committee requests the Government to specify whether the “claims arising from labour contracts”, apart from those for unpaid wages, include also claims with respect to holiday pay, sick leave or other paid absence, and severance pay, as required by this Article of the Convention and, if so, to indicate the conditions under which and the limits within which those claims are protected.

Articles 9–13. Protection of workers’ claims by a guarantee institution. The Committee recalls that, at the time of the ratification of the Convention, the Government declared that it accepts the obligations of Part III dealing with the protection of workers’ claims by a guarantee institution. The Committee notes, however, that in its first report the Government indicates that a guarantee institution is not yet established and that these Articles of the Convention would be applied once relevant legislation is adopted. The Committee therefore requests the Government to take all necessary action with a view to setting up a wage guarantee institution in accordance with these Articles of the Convention and to keep the Office informed of any progress made in this regard.

Part V of the report form. Application in practice. The Committee would be grateful if the Government would provide general indications as to the manner in which the Convention is applied in practice, including, for instance, the number of workers covered by the measures giving effect to the Convention, statistics on the number of bankruptcy proceedings and the amounts of wage debts recovered through such proceedings, etc.