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

Protection of Wages Convention, 1949 (No. 95) - Costa Rica (Ratification: 1960)

Article 3 of the Convention. Payment of wages in legal tender. Further to its previous comments, the Committee notes the Government’s intention to adopt, with the technical assistance of the Office, measures to align section 165 of the Labour Code with the provisions of the Convention. The Committee once again recalls the importance of compliance with Article 3 of the Convention, under the terms of which wages payable in money shall be paid only in legal tender, and payment in the form of promissory notes, vouchers or coupons, or in any other form alleged to represent legal tender, shall be prohibited. It also recalls that the problem of the non-conformity of section 165 of the Labour Code with this provision of the Convention has been the subject of the Committee’s comments for many years and was even emphasized in its 2003 General Survey on the protection of wages (paragraph 80). The Committee therefore hopes that the Government will forthwith take the necessary measures to ensure the implementation of the Convention on this point, if necessary with the technical assistance of the Office, and it requests the Government to keep the Office informed of any developments in this respect.

Article 4(2)(b). Value attributed to allowances in kind. The Committee notes that the Government’s latest report, in the same way as the previous report, focuses almost solely on the criteria under which the allowances provided may be qualified as wages in kind. On the precise issue raised by the application of Article 4(2)(b) of the Convention, the Government confines itself to indicating that, in the last resort and in case of doubt, it is for the courts to determine the value of in-kind benefits and that courts cannot take arbitrary decisions.

The Committee, however, observes that section 166 of the Labour Code still establishes as a rule that the value of allowances in kind shall be fixed at a flat rate of 50 per cent of the wage in cash if no other amount has been determined by agreement between the parties. The Committee recalls the requirement of the Convention that the value attributed to allowances in kind shall in all circumstances be fair and reasonable. In this regard, the flat-rate valuation envisaged in section 166 of the Labour Code in the absence of agreement between the parties is not such as to ensure that the value attributed corresponds in practice to the real value of the allowances. As the Government indicates, intervention by a court is only envisaged in cases of doubt and then only following a complaint lodged with the competent bodies (which is often a long and costly procedure). This procedure does not therefore provide for full compliance with this provision of the Convention.

The Committee is therefore bound to recall, as it emphasized in paragraph 159 of its 2003 General Survey on the protection of wages, that “setting an overall limit on the proportion of the money wages which may be replaced by benefits in kind does not in itself resolve the problem of the fair valuation of such benefits and offers little protection to workers from possible exploitative practices”. In light of the above, the Committee hopes that the Government will take the necessary measures in the very near future to amend section 166 of the Labour Code so as to ensure that it is in conformity with the Convention, if necessary with the technical assistance of the Office, and requests it to provide information on any developments in this respect.