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Minimum Wage Fixing Convention, 1970 (No. 131) - Bosnia and Herzegovina (RATIFICATION: 1993)

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Article 2 of the Convention. Binding force of minimum wage. Federation of Bosnia and Herzegovina (BiH). In its previous comments, the Committee requested the Government to provide information on the application of section 8 of the General Collective Agreement (GCA) for the territory of the Federation of BiH which provides that sectoral collective agreements may allow the temporary application of hourly rates below the minimum wage in enterprises affected by exceptional economic difficulties. The Committee notes the Government’s indication in its report that various sectoral collective agreements contain such provisions within the following conditions: the measure is only applicable in exceptional circumstances and in case of economic difficulties; it requires the previous agreement of the trade union or of the workers concerned; it may only be applied during a limited period; the GCA fixes the rate below which no further reduction may be allowed. While recalling that pursuant to Article 2(1), minimum wages shall have the force of law and shall not be subject to abatement, the Committee recognizes that, in certain exceptional cases, measures adopted on a strictly temporary basis in consultation with the employers’ and workers’ organizations concerned, and under close supervision by the public authorities, could contribute to avoiding redundancies for economic reasons, or even the closure of the enterprise. The Committee recalls that in so far as possible, alternative measures should be sought, such as the reduction of social contributions or the provision of similar facilities by the public authorities, to help enterprises overcome such difficulties. It therefore requests the Government to indicate whether such alternative measures have been envisaged or adopted.

Articles 3 and 4. Minimum wage-fixing machinery. Republika Srpska. In its previous comments, the Committee requested the Government to provide information on the manner in which the relevant economic and social factors were taken into account for the periodic adjustment of the minimum wage, as well as on the involvement of the Economic and Social Council (ESC) in the minimum wage-fixing process in the Republika Srpska. It notes the Government’s reference to section 127 of the Labour Law for the Republika Srpska, which lists the socio-economic criteria taken into consideration for the determination of the minimum wage and which provides that the minimum wage is fixed in the last quarter of the current year for the following year, by the Government of the Republika Srpska, upon a proposal from the ESC.

Article 4. Minimum wage-fixing machinery. Brčko District. In its previous comments, the Committee requested the Government to provide information on the operation of the minimum wage-fixing machinery in the Brčko District. The Committee takes note of the indication of the Government that pursuant to section 58 of the Labour Law for the Brčko District, the procedure for the fixation of the minimum wage shall be determined by collective agreement. The Government also indicates that such a collective agreement has not been adopted and that as a result, no minimum wage has been set for the Brčko District. Therefore, the Committee requests the Government to adopt measures to ensure that minimum wages are fixed for the groups of wage earners whose terms of employment are such that coverage would be appropriate in the context of the Brčko District.

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Article 2 of the Convention. Binding force of minimum wages. Federation of Bosnia and Herzegovina (FBiH). The Committee notes the Government’s explanations concerning section 8 of the General Collective Agreement which allows for a lower minimum hourly rate to be applied in exceptional circumstances by enterprises affected by low profits or economic crisis. The Committee would appreciate receiving additional explanations as to the extent to which enterprises have had recourse to lower minimum pay rates so far (number of collective agreements, reasons invoked, applicable rates and time period).

Article 3. Periodic adjustment of minimum wages. Republika Srpska. The Committee again requests the Government to provide information concerning the manner in which economic and social factors are taken into consideration for the readjustment from time to time of the minimum wage (e.g. periodical surveys on national economic conditions).

Article 4. Minimum wage-fixing machinery. Republika Srpska and Brcko District. In its previous comment, the Committee had requested clarifications as to whether the Economic-Social Council of the Republika Srpska was in any manner involved in the minimum wage-fixing process and had also asked for detailed information on the operation of the minimum wage system in the Brcko District. While noting the Government’s indication that no collective agreement fixing the minimum wage has as yet been signed in the Brcko District, the Committee reiterates its request for:(i) clarifications on the role of Economic-Social Council in the process of minimum wage-fixing in the Republika Srpska and copies of any legislative or administrative instruments concerning the mandate and function of the Council; and (ii) full particulars on the system of establishing and reviewing minimum wage rates in the Brcko District, especially with regard to the direct participation and full consultations with the social partners.

Part V of the report form. Practical application. The Committee notes the Government’s indication that the inspection services continue to report cases of violation of the Convention. The Committee requests the Government to provide up-to-date information on the practical application of the Convention in all three entities, including for instance: (i) the minimum wage rates currently in force; (ii) the approximate number of workers paid at the minimum level; (iii) labour inspection results showing the number of infringements of the minimum wage legislation and the penalties imposed; and (iv) statistical surveys or studies on national economic conditions conducted by the Federal Office of Statistics of the FBiH and used for the purpose of readjusting minimum wage rates.

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The Committee welcomes the first report presented by the Government on the application of the Convention since the formal declaration dated 12 April 1993 by which it accepted to continue to be bound by all ILO Conventions previously ratified by former Yugoslavia. The Committee would appreciate receiving additional information on the following points.

Article 1 of the Convention. Scope of application. Federation of Bosnia and Herzegovina (BiH) and Republika Srpska. The Committee notes that section 69 of the Labour Law of the Federation BiH and section 84 of the Labour Law of the Republika Srpska provide in almost identical terms that minimum wages are regulated by collective agreements. The Committee also notes the Government’s reference to General Collective Agreements concluded in both entities. The Committee requests the Government to indicate whether there are any sectors or branches of economic activity in the Federation BiH or in Republika Srpska which are not covered by collective agreements. It also asks the Government to transmit copies of the General Collective Agreements currently applicable in each of the two entities.

Article 2, paragraph 1. Binding force of minimum wages. Federation of Bosnia and Herzegovina. The Committee notes that section 140 of the Labour Law provides for a fine of between KM1,000 (approximately US$674) and KM10,000 (approximately US$6,700) to be imposed for the payment of salary lower than the amount determined in the applicable collective agreement or the rulebook. It also notes, however, the Government’s statement according to which even though the minimum hourly wage is currently set at KM1.75 (approximately US$1.18), sectoral collective agreements may – in exceptional cases – fix pay rates lower than the minimum hourly wage, but in any case not lower than KM1.24 (approximately US$0.84). The Committee requests the Government to clarify the scope of such exceptional cases and explain how such practice can be reconciled with the principle that, once fixed, the minimum wage has the force of law and may not be subject to abatement. It also requests the Government to specify and supply the text of any collective agreement(s) in force providing for sub-minimum hourly rates.

Article 3. Periodic adjustment of minimum wages. Federation of Bosnia and Herzegovina and Republika Srpska. The Committee notes the information provided by the Government that under section 9 of the General Collective Agreement of the Federation BiH, the increment of living expenses, the growth of retail prices, and the overall economic progress must be taken into account in determining the minimum hourly wage. Similarly, under section 31 of the General Collective Agreement of the Republika Srpska, the elements to be used as a basis for fixing the minimum wage include among others the production growth, living standards, and the basic needs of the worker and his/her family. The Committee asks the Government to explain in greater detail how these various criteria are applied in practice, for instance by carrying out periodic reviews of national economic conditions, collecting statistics, etc.

Brcko District. The Committee would appreciate if the Government would provide more detailed information as to the frequency and method of revising minimum pay rates under the current minimum wage legislation.

Article 4. Minimum wage-fixing machinery. Federation of Bosnia and Herzegovina. The Committee notes the Government’s indication that the General Collective Agreement of the Federation BiH provides for regular adjustment of the minimum hourly wage at least once a year by government decision based on the recommendation of the Economic-Social Council while an ad hoc adjustment becomes obligatory when the living expenses index increases by 5 per cent over a period of three months. While noting that section 130 of the Labour Law summarily provides for the tripartite composition and main aims of the Economic-Social Council, the Committee requests the Government to describe how it is ensured in practice the full consultation with, and the equitable representation of employers’ and workers’ organizations within the framework of the Economic-Social Council. It also requests the Government to forward a copy of the rules regulating the Council’s membership and competence.

Republika Srpska. The Committee notes the Government’s indication that according to section 31(1) of the General Collective Agreement, the parties to the agreement determine in the last quarter of each year the minimum wage of the following year. The Government adds that the minimum wage for 2006 was fixed at KM205 (approximately US$137) per month. The Committee also notes that section 140 of the Labour Law provides for the establishment of an Economic-Social Council, a tripartite consultative body composed of three Government members, three employers’ and three workers’ representatives. The Committee requests the Government to clarify whether the Economic-Social Council plays any role in the determination and periodic adjustment of the minimum wage. It would also be grateful if the Government would provide a copy of the rules setting out the Council’s mandate and functions.

Brcko District. The Committee notes that under section 57 of the Labour Law of the Brcko District, employees’ salaries are to be determined in collective agreements and rulebooks. It also notes, however, the Government’s statement that general collective agreements are not concluded in practice and that accordingly no minimum wage is fixed. The Government adds that by decision of the Assembly, the basic salary for the calculation of the obligatory social security contributions is fixed at KM300 (approximately US$201) per month which indirectly serves to define and protect some minimum wage level. The Committee requests the Government to provide additional information on the operation of the minimum wage system in the Brcko District.

Article 5. Inspection. Federation of Bosnia and Herzegovina and Republika Srpska. The Committee notes that according to section 42 of the General Collective Agreement of the Federation BiH, the supervision of the implementation of the agreement is entrusted to federal and/or cantonal labour inspectors. It also notes that under section 33 of the Law of the Federation BiH on labour inspections and section 14 of the Law of the Republika Srpska on labour inspections, inspectors are responsible for the enforcement of the laws and regulations concerning the calculation and payment of wages. The Committee would be grateful if the Government would provide full particulars on the organization of the inspection services both in law and practice and transmit copies of the two enactments mentioned above.

Brcko District. The Committee asks the Government to provide documented information on the system of labour inspection or other enforcement measures ensuring the effective application of the legislation relating to minimum wages.

Part V of the report form. The Committee notes the Government’s general indication that according to the information communicated by the inspection authorities there are cases of violation of the Convention. The Committee would appreciate if the Government would provide in its next report up to date information on the practical application of the Convention in the three entities, including, for instance, the approximate number of workers covered by the minimum wage legislation, or remunerated at the minimum wage rate; the minimum wage rates in force; labour inspection results showing the number of inspection visits conducted, violations reported and sanctions imposed; statistics on the evolution of minimum wage rates in recent years as compared to the evolution of economic indicators, such as inflation, in the same period; copies of official documents, such as annual reports of the Economic-Social Council of both the Federation of Bosnia and Herzegovina and of the Republika Srpska, related to the operation of the minimum wage system, etc.