Observation (CEACR) - adopted 2022, published 111st ILC session (2023)

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

The Committee notes the observations of the Ecuadorian Confederation of Free Trade Unions (CEOSL), the Ecuadorian Federation of Municipal and Provincial Workers (FETMYP), the National Federation of Education Workers (UNE) and the National Ecuadorian Federation of Workers of Provincial Governments (FENOGOPRE), received on 1 September 2022. The Committee requests the Government to provide its response in this regard.

Article 3 of the Convention. Elements for the determination of the minimum wage. With reference to its previous comments, the Committee notes the Government’s indications in its report that: (1) Ministerial Decision No. MDT-2020-249 of 30 November 2020 provided that there was no wage adjustment for 2021 and maintained the minimum wage at US$400 a month; (2) the decision was adopted following several sessions of dialogue with representatives in the National Labour and Wage Council (CNTS) and with the technical support of the competent state institutions, in which analysis covered not only the consumer price index, but also various relevant indicators of the difficult economic situation faced by the country as a result of the COVID-19 pandemic; and (3) various indicators were analysed, including; the consumer price index, the needs of workers, the cost of living, economic factors and productivity levels, which are factors that are in conformity with the provisions of the Convention. The Government adds that when the wage increase for 2021 was analysed in 2020, Ecuador was experiencing an unprecedented economic crisis, despite which tripartite dialogue sessions were held in the CNTS on wage fixing, during which employer and worker representatives made their proposals and indicated their positions on wage adjustments and, even though consensus was not achieved among the representatives in the Council, each of the proposals, indicators and positions expressed by both partners were taken into consideration in the analysis for the purpose of issuing the aforementioned ministerial decision which maintained the 2020 wage level without adjustment in 2021. The Government adds that for 2022, giving effect to the provisions of the national legislation and Convention No. 131, the Ministry of Labour, through Ministerial Decision No. MDT-2021-276 of 21 December 2021, set the unified basic wage for workers in general, including workers in small industry, agriculture, export processing zones, paid domestic workers, craft operators and micro-enterprise collaborators, at US$425 a month. According to the Government, the unified basic wage was referred to the CNTS for consideration, as a result of which the 2022 adjustment was the subject of tripartite social dialogue, with the participation of state institutions, which reported the trends in the various indicators in relation to: (a) fluctuations in the cost of living; (b) economic growth; and (c) the employment situation in the country.

The Committee notes that in their observations the CEOSL, FETMYP, UNE and FENOGOPRE: (1) point out that, when determining the unified basic wage for 2022, the same legal parameters were not applied as those used for 2021; (2) indicate that Ministerial Decision No. MDT-2021-276, which determined the basic wage for 2022, indicates in its introductory paragraphs that “consensus was not reached in the CNTS between the representatives of workers and employers on the determination of the unified basic wage which will be in force as from 1 January 2022”; and (3) nevertheless, instead of setting the wage increase as a percentage rise equivalent to the projected consumer price index, as set out in the national legislation, the wage was increased by 6.25 per cent at the request of the President of the Republic. In this way, the wage for 2022 was increased by US$25. The trade union organizations provide explanations of the formula established in the legislation (Ministerial Decision No. MDT-2020-185) for the calculation of the adjustment in the unified basic wage and add that: (i) the formula may or may not be used by the Council for the determination of the wage; (ii) if it is followed, it does not include the cost of the basic family basket, nor the cost of the basic living basket; and (iii) these components are defined by the Ecuadorian Institute of Statistics and Census and, in July 2022, the basic family basket was US$753.62 a month and the basic living basket was US$793.33, which are far from the current basic wage of US$425. In the view of the trade union organizations, the State should establish a compulsory formula for the determination of basic wages which takes into account the value of the basic family and living baskets. The Committee notes all the information provided by the Government and the observations of the trade union organizations, concerning which the Government has not provided its response. The Committee notes the different positions on the elements taken into account to determine the level of minimum wages in 2022, and the proposed formula for determining the minimum wage to be considered for the future. The Committee hopes that tripartite dialogue with the representative organizations of workers and employers concerned, in which there is a sincere, technical and constructive exchange, will make it possible to determine a minimum wage which, in so far as possible and appropriate in relation to national practice and conditions, will take into consideration all the elements referred to in Article 3(a) and (b).It requests the Government to provide information on the progress made in this regard.

Article 4(2) and (3). Consultations. With reference to its previous comments, the Committee notes the Government’s indication that: (1) in accordance with section 117 of the Labour Code, the unified basic wage in the country for private sector workers is established annually, for which purpose the National Labour and Wage Council holds sessions to analyse the employment policy and determine wage adjustments with the participation of representatives of both employers and workers; (2) the CNTS engages in exhaustive consultation with employers’ and workers’ organizations; (3) each partner in the CNTS has the right to speak and vote on a basis of equality and the resulting decisions and recommendations therefore require the support of the majority of representatives on the Council; (4) in 2021, five meetings were held to examine the labour situation and the annual wage adjustment, in which the representatives participated in an exhaustive discussion of the criteria and the proposals put forward by both partners; (5) the Ministry of Labour participated in these tripartite discussions with a view to reaching consensus between the partners; and (6) mechanisms have also been established in the national legislation to support the representatives of the partners in their decision-making, such as the option for the representatives to have technical advisors and the participation of public institutions.

The Committee notes the indications of the CEOSL, FETMYP, UNE and FENOGOPRE that: (1) the United Workers’ Front (which represents 450,000 workers in the public and private sectors, rural areas and cities) and Public Services International in Ecuador, which have been present in Ecuador since 1989, were not able to participate in the tripartite discussions, despite their high level of representation among workers, or in the decisions taken by the CNTS; (2) the denial of the participation of these organizations is due to the lack of clarity in the parameters used by the Executive Secretariat of the CNTS in drawing up the list of the ten most representative organizations at the national level; (3) this lack of transparency enables the Ministry of Labour to nominate pre-Government organizations and the legislation should therefore be revised to clarify and make more transparent the criterion of most representative, in accordance with ILO guidance and, in short, allow other organizations to be part of the Council. Finally, the trade union organizations recall that the ILO provided technical assistance to the State at the end of 2019, when a road map was prepared which envisaged the strengthening of the CNTS and the broadening of its membership, but that it has not been implemented more than two years later. The Committee recalls that, when examining the application of the Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144), by Ecuador, it requested the Government to adopt the measures necessary to ensure that all the country’s “most representative organizations” of employers and workers can participate in the CNTS and other consultative bodies of a tripartite nature (2021 observation). The Committee trusts that appropriate measures will be taken to enable full consultations to be held with all the representative organizations of workers and employers concerned, in accordance with Article 4(2).It requests the Government to provide information on the progress made in this regard.

The Committee recalls that the Government may, in relation to all the matters raised, have recourse to ILO technical assistance, if it so wishes.

The Committee noted information supplied by the following State in an answer to a direct request: Netherlands.