Direct Request (CEACR) - adopted 2018, published 108th ILC session (2019)

Zambia

Protection of Wages Convention, 1949 (No. 95) (Ratification: 1979)
Minimum Wage Fixing Convention, 1970 (No. 131) (Ratification: 1972)
Protection of Workers' Claims (Employer's Insolvency) Convention, 1992 (No. 173) (Ratification: 1998)

In order to provide a comprehensive view of the issues relating to the application of the ratified Conventions on wages, the Committee considers it appropriate to examine Convention No. 131 (Minimum Wage Fixing) and Conventions No. 95 and No. 173 (Protection of Wages) in a single comment.

Minimum Wage Fixing Convention, 1970 (No. 131)

Article 1(1) of the Convention. Coverage of all groups of wage earners. The Committee notes that the Minimum Wages and Conditions of Employment (General) Order 2011, as amended in 2012, excludes from its scope of application employees of the Government and local authorities and employees in management positions. It notes in addition that the Minimum Wages and Conditions of Employment (Shop Workers) Order 2011, as amended in 2012, excludes from its application certain categories of workers (such as persons employed in the motor trade industry or the petroleum industry, in the running of coffee stores, in the sale of agricultural produce, in bread making, in the reception, storage and treatment of fish, meat, poultry, game, fruit and other perishable foodstuff, etc.). The Committee recalls that Article 1(1) undertakes to establish a system of minimum wage which covers all groups of wage earners whose terms of employment are such that coverage would be appropriate. The Committee therefore requests the Government to provide information regarding the application of the Convention to the categories of workers excluded from the application of the statutory instruments mentioned above.

Article 3. Criteria for determination of minimum wages. The Committee notes that the Government refers to the consumer price index as the criteria used for the determination of the level of the minimum wage. It also notes the Government’s reference to the ongoing reform of the labour legislation, and in particular that section 124(2) of the draft Labour Code 2017 provides that in making recommendations about the minimum wage to the Ministry of Labour and Social Welfare, the Labour Advisory Committee shall take into consideration both the needs of the workers and their families and economic factors. The Committee notes that these criteria would correspond to those set out in Article 3. The Committee therefore requests the Government to provide information on the progress made in the revision of the labour legislation.

Article 5. Enforcement. Informal economy. The Committee notes that the Government indicates that workers in the informal sector are not covered by minimum wage protection. It also notes that according to the Labour Force Survey of 2014 published by the Central Statistical Office of the Ministry of Labour and Social Security, the informal sector accounted for 83.9 per cent of the total employed population. The Committee wished to draw the Government’s attention to the Transition from the Informal to the Formal Economy Recommendation, 2015 (No. 204) which provides that through the transition to the formal economy, Members should progressively extend, in law and practice, to all workers in the informal economy, social security, maternity protection, decent working conditions and a minimum wage (paragraph 18). Noting that a substantial percentage of the workforce operates in the informal sector in Zambia, the Committee requests Government to take the necessary measures to extend the protection afforded by the national minimum wage system to workers in the informal economy.

Protection of Wages

Protection of Wages Convention, 1949 (No. 95)

Article 7(2) of the Convention. Works stores. The Committee notes that the Government’s report does not provide information on the application of Article 7(2) which provides that, where works stores for the sale of commodities to the workers are established or services are operated in connection with an undertaking, and access to other stores or services is not possible, the competent authority shall take appropriate measures with the object of ensuring that goods are sold and services provided at fair and reasonable prices, or that stores established and services operated by the employer are not operated for the purpose of securing a profit but for the benefit of the workers concerned. The Committee therefore requests the Government to indicate the measures taken to ensure compliance with this provision of the Convention.

Article 8(1). Deductions from wages. The Committee notes that section 45 of the Employment Act lists the authorized wage deductions. However, there appears to be no provision limiting the overall amount of deductions, whereas according to Article 8(1), the extent of authorized deductions from wages shall be prescribed by national laws or regulations or fixed by collective agreement or arbitration award. In this respect, the Committee wishes to draw the attention of the Government to paragraph 296 of its 2003 General Survey on the protection of wages. The Committee requests the Government to indicate the measures taken to ensure compliance with this provision of the Convention.

Article 14(b). Wage statements. The Committee notes that section 51 of the Employment Act establishes the obligation to provide the employee with information on wages at the commencement of the employment relationship or when changes in the nature of such employment take place. However, the Committee notes that the Employment Act does not contain provisions providing for the issuance of a wage statement to the worker at the time of each payment of wages. The Committee recalls that Article 14(b) establishes that effective measures must be taken, where necessary, to ensure that workers are informed in an appropriate and easily understandable manner at the time of each payment of wages, of the particulars of their wages for the period concerned, in so far as such particulars may be subject to change. The Committee requests the Government to specify how this provision is applied in law or in practice (for example, by means of payslips).

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

Articles 5, 6 and 8 of the Convention. Application to business rescue proceedings. The Committee notes the adoption of the Corporate Insolvency Act, No. 9 of 2017 and of the new Companies Act, No. 10 of 2017. It further notes that the Corporate Insolvency Act provides for the possibility of initiating business rescue proceeding which, according to section 2(1) of this Act, is the process of facilitating the rehabilitation of a company that is financially distressed. The Committee also notes that the legislation does not indicate whether wage claims prior to the commencement of the business rescue plan benefit from a privilege, and subsequently does not regulate the coverage and rank of such privilege. The Committee recalls that the Convention requires that workers’ claims arising out of their employment shall be protected by a privilege (Article 5), that such privilege shall cover wages due at least three months before the insolvency or termination of contract, claims for holiday pay, other types of paid absence and severance pay (Article 6) and that these claims shall have a higher rank of privilege than most other privilege claims, in particular those of the State and the social security system (Article 8). The Committee therefore requests the Government to take the necessary measures in order to ensure the application of these provisions of the Convention to business rescue proceedings.

Article 8(1). Rank of privilege in situations of winding-up and receivership. The Committee notes that section 127(2) of the Corporate Insolvency Act provides that amounts owed to an employee shall be paid after claims related to taxes and Government rent; this constitutes a downgrading of the rank of the privilege attached to employees’ claims in the event of winding up of a company vis-à-vis State’s claims, compared to previous legislation. Moreover, according to section 8 of the Insolvency Act, the same provision applies by extension to receivership. Recalling that Article 8(1) requires workers’ claims to have a higher rank of privilege than the claims of the State, the Committee notes that, as a consequence of the recent legislative change, national legislation is no longer in conformity with this Article. The Committee therefore requests the Government to adopt the necessary measures in order to restore compliance with this provision of the Convention.