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

Minimum Wage Fixing Convention, 1970 (No. 131) - Ukraine (Ratification: 2006)

Articles 2 and 3 of the Convention. Binding force of the minimum wage and periodic review of minimum wages. Further to its previous observation, the Committee notes the Government’s reply to the comments made by the Independent Trade Union of Miners (ITUM) of the Nikanor-Nova coalmine and the National Forum of Trade Unions of Ukraine (NFTU) concerning the application of the Convention.

With respect to the observations of the ITUM, the Committee notes the Government’s indication that, based on the branch collective agreement for the mine sector, in cases where an enterprise is, for objective financial and economic reasons, unable to implement the minimum pay rate provided for in the applicable collective agreement (i.e. not less than 120 per cent of the legal minimum wage), a lower minimum wage rate may be applied for a period not exceeding six months. This wage rate, however, may not be lower than the legal minimum wage rate, and must be brought back to the rate set out in the mine sector collective agreement at the end of the six-month period. The Government further indicates that the State Inspectorate conducted 35 inspections during the period 2009–10 at various divisions of the state enterprise “Luganskugol”, in particular four inspections at the Nikanor-Nova mine. These inspections identified a number of violations of the labour legislation, including section 95 of the Labour Code concerning minimum wage and section 3 of the Act concerning measures to enhance the prestige of mine work, which provides that employees working underground on a full-time basis must be paid at least 630 Ukrainian hryvnia (UAH) (approximately €54) plus 30 per cent increment per month. The Director of the mine, who was ordered twice to take remedial action, has been prosecuted in accordance with section 188-6 of the Administrative Offences Code. The Director of “Luganskugol” was also ordered to rectify certain contraventions and has since been prosecuted. The Committee requests the Government to keep the Office informed of the evolution of the situation at the Nikanor-Nova mine, in particular as regards compliance with the applicable minimum wage for the mine sector and the results of any new inspection visits. The Committee also requests the Government to refer to its comments made under the Protection of Wages Convention, 1949 (No. 95).

Concerning the comments made by the NFTU, the Committee notes the Government’s explanations concerning various provisions of the draft Labour Code, in particular section 208 which provides that the conditions and rate of remuneration of public legal entities must be determined by the Cabinet of Ministers in consultation with the trade unions concerned, and sections 209 and 213 that provide that self-financed enterprises must determine the conditions and rate of remuneration through collective bargaining. The Committee requests the Government to transmit a copy of the draft Labour Code and explain how the Convention is given effect under the draft Code, in particular Article 4 of the Convention (full and genuine consultations with, and direct participation of, employers’ and workers’ organizations in the establishment, operation and periodic review of the minimum wage fixing machinery).

In this connection, the Committee understands that the Government intends to introduce in the new labour legislation a “guaranteed salary” for eight categories of workers based on the level of qualifications, the “guaranteed salary” of the first category being equal to the legal minimum wage rate. The Committee also understands that, as from 1 April 2011, the monthly minimum wage was raised to UAH960, and was further increased to UAH985 on 1 October, and to UAH1,004 (approximately €88) on 1 December. The Committee further understands that despite this increase, the national minimum wage remains largely insufficient to cover workers’ basic subsistence needs which are estimated to be in the neighbourhood of UAH2,000 per month. The Committee would be grateful if the Government would provide additional explanations as to how the “minimum consumer budget” and the “poverty line”, to which reference is made in the Wages Act of 1995, are defined in practice and also how social criteria, such as the relative living standards of different social groups, are considered when determining minimum wage levels.