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

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

Article 4(2) and (3) of the Convention. Full consultation and direct participation of the social partners in the establishment and operation of the minimum wage fixing machinery. Further to its previous comment, the Committee notes the information provided by the Government in reply to the observations of the International Organisation of Employers (IOE) dated 30 August 2009.

The IOE indicated that a new constitutional text had been drawn up and then adopted by referendum without the effective participation of the main actors in the world of work and that article 328, paragraph 2, and transitional provision No. 25 of the new constitutional text, which provide for the annual progressive adjustment of the minimum wage so as to cover the cost of the household basket of goods (canasta familiar) do not take into account the direct participation of the employers and workers concerned, as required by this provision of the Convention.

In its reply dated 3 February 2010, the Government indicates that, under the terms of section 117(2) of the Labour Code, the minimum wage is adjusted annually with the participation of the National Wage Council (CONADES), a tripartite advisory body. It emphasizes in this respect that wages are only adjusted by the Minister of Labour and Employment in cases where a consensus decision has not been adopted by the CONADES. As the CONADES did not achieve consensus in the meetings prior to the adjustment of the minimum wage in 2009, the Minister of Labour and Employment, in accordance with section 118(3) of the Labour Code, increased the minimum wage on the basis of the consumer price index established by the competent authority.

In this respect, the Committee wishes to refer to paragraphs 233 and 234 of its 1992 General Survey on minimum wages, in which it indicates that the party responsible for carrying out the consultation should take into consideration what is stated or proposed by the party it consults, without this meaning that the Government has to comply with all the requests of the organization consulted, still less that it should enter into negotiations. The consultation must take place before decisions are taken and must be effective, that is to say that it must enable employers’ and workers’ organizations to have a useful say in matters that are the subject of consultation.

Furthermore, with reference to its previous observations concerning the current rate of the minimum wage, namely US$240 a month, and whether it allows workers a decent standard of living, the Committee notes that, according to the data of the National Institute of Statistics (INEC) concerning the cost of the household basket of goods (canasta familiar vital y básica), the minimum wage covers the cost of the so-called “subsistence” household basket of goods (US$382.64 out of a monthly income, for two persons, of US$448), but does not cover the cost of the so-called “basic” household basket of goods (US$535.56 out of a monthly income, for two people, of US$448). An increase of around 16 per cent would still be necessary to cover the needs of a family of five persons. While noting the increase of 10 per cent in the minimum wage in 2010, the Committee requests the Government to pursue its efforts to ensure a minimum wage rate that is sufficient to allow workers to cover their needs and those of their family. It also requests the Government to continue providing information on the minimum wage rates that are applicable and their adjustment through the CONADES, in full and effective consultation with employers’ and workers’ organizations.