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Minimum Wage Fixing Convention, 1970 (No. 131) - Portugal (RATIFICATION: 1983)

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The Committee notes the observations of the General Confederation of Portuguese Workers (CGTP) communicated with the Government’s report.
Article 3. Criteria for determining the level of the minimum wage. The Committee notes the information provided by the Government that minimum wage has been increased by 55 Euros in 2023, representing a nominal increase of 7.8 per cent, the highest since 2010. The Committee also notes that according to the data provided by the Government, the annual variation in real terms for 2022 is negative (-1.7 per cent). In this respect, the Committee notes that in its observations, the CGTP indicates that since 2022 the minimum wage has failed to adequately address the needs of the workers and their families, particularly in light of the rising inflation and the increased cost of housing. The Committee requests the Government to provide its comments in this regard.

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The Committee notes the information provided by the Government, which answers the points raised in its previous direct request and has no further matters to raise in this regard.

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Articles 3 and 4 of the Convention. Machinery for fixing and adjusting minimum wages. The Committee notes the comments of the Confederation of Portuguese Industry (CIP) and the International Organisation of Employers (IOE), received on 4 July 2013 and forwarded to the Government on 9 September 2013. It also notes the comments made by the IOE, received on 1 September 2013 and forwarded to the Government on 17 September 2013. The CIP and the IOE first indicate that the implementation of a minimum wage system in 1974 was not preceded by consultation with the social partners. Social dialogue at a confederal level was not institutionalized until 1984, with the creation of the Standing Council for Social Dialogue, which was replaced in 1991 by the Standing Committee for Social Dialogue (CPDS). Today, the minimum wage is adjusted annually by legislative means after consulting the CPDS. The two employers’ organizations emphasize that it is particularly important for all the criteria listed in Article 3 of the Convention, and particularly economic factors such as productivity and the desirability of attaining and maintaining a high level of employment, are taken into consideration in determining the level of minimum wages. The CIP and the IOE also refer to the tripartite agreement concluded in December 2006 concerning the medium-term trends in the minimum wage to achieve the objective of a monthly minimum wage of €500 by 2011. Finally, the CIP and the IOE indicate that the minimum wage has been kept at €485 since 2011 due to the serious economic and financial situation and the Memorandum of Understanding concluded between the Government and the International Monetary Fund, the European Central Bank and the European Commission.
In its latest report, the Government refers to its commitments under the Economic and Financial Adjustment Programme – which has resulted in the implementation of a set of structural reforms that promote increased productivity and competitiveness in order to create more favourable conditions for the financing of enterprises – and indicates that it is committed to ensuring a wages evolution consistent with the objectives of job creation and improvement of enterprises’ competitiveness. For this reason, the minimum wage has not been adjusted in 2012 nor in 2013, although this question has been discussed several times within the CPDS. The Government indicates that the real evolution of the minimum wage since 1980 has, however, resulted in significant increases of the purchasing power of workers, even if this purchasing power declined in 2011 and 2012. The Government also specifies that the majority of sectors are covered by collective agreements that establish salary scales. Finally, the Government indicates that under section 273(2), of the Labour Code, the workers’ needs, the cost of living, the productivity, and the incomes and prices policy are taken into account in determining the minimum wage. The Committee is aware of the economic constraints facing the Government as well as the reasons of public interest that required the postponement of the minimum wage increase decided previously. It recalls, however, that the key principle of full consultation with, and direct participation of, the social partners on an equal footing in the process of minimum wage fixing should be respected in all circumstances, and even more so when, due to a situation of economic difficulty, it is desirable to seek balanced solutions that are acceptable to all parties. The Committee therefore asks the Government to ensure that in any decision relating to minimum wages, full consultations with, and the direct participation of, employers’ and workers’ organizations on an equal footing are guaranteed within the Standing Committee for Social Dialogue.

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Articles 3 and 4(2) of the Convention. Elements to be taken into consideration in determining the level of minimum wages – Consultations with the social partners. The Committee notes the observations made by the General Confederation of Portuguese Workers (CGTP) and the General Workers’ Union (UGT) concerning the application of the Convention, which were attached to the Government’s report.
The CGTP indicates that the purchasing power of the minimum wage evolved positively between 2007 and 2010, following the implementation of a tripartite agreement concluded in December 2006 concerning the mid-term evolution of the minimum wage. However, according to the CGTP, the economic crisis was cited in 2011 to justify non-compliance with this agreement, and the minimum wage was not adjusted in 2012, resulting in a significant drop in its purchasing power and the loss of a proportion of the accumulated gains made between 2007 and 2010. The CGTP considers that this development is particularly important because of the high number of workers being paid low wages, because the amount of the minimum wage is close to the poverty line, and because of the gap between the minimum wage amount and the average wage in the private sector. The CGTP refers to Legislative Decree No. 143/2010 of 31 December 2010, which set the amount of the minimum wage for 2011 at €485 per month, while setting the objective of increasing the minimum wage to €500 following two evaluations which were due to take place in May and September 2011. The CGTP alleges that the planned evaluations did not take place and that the social partners were not consulted in May and September 2011. According to the union, it was only in May 2012 that the matter was discussed within the Standing Committee on Social Dialogue (CPDS), without any decision being taken regarding the adjustment of the minimum wage. The CGTP considers that the difficult economic context does not make revision of the minimum wage any less necessary. On the contrary, in addition to meeting the requirement of protection of the least paid workers, an increase of the minimum wage would constitute a means of fostering economic growth by supporting internal demand.
In its observations, the UGT also refers to the Government’s decision to set the minimum wage at €485 for 2011, emphasizing that the Government based its decision on the economic policy conditions established in the Memorandum of Understanding (MoU) concluded with the troika (European Commission, European Central Bank (ECB) and the International Monetary Fund (IMF)). The UGT affirms that the evaluations planned under Legislative Decree No. 143/2010 were not conducted within the CPDS and that the amount of the minimum wage has been maintained at €485. It recalls that the Labour Code provides that the amount of the minimum wage shall be fixed annually by legislative means, after consultation of the CPDS, and alleges that it was only following pressure exerted by union representatives that the Government placed this matter on the work agenda of the CPDS, during a meeting which was only held in May 2012. Furthermore, according to the UGT, the Government merely informed the social partners at this meeting that the amount of the minimum wage would not be adjusted and would therefore be maintained at €485. The union considers that factors such as the needs of workers and the increase in the cost of living, and not just economic objectives, must be taken into account when fixing the minimum wage, as provided for by the Convention. The UGT considers that, in the current context of crisis, marked by the increase of poverty and exclusion, it is very important to take account of these factors. Like the CGTP, it considers that an increase in the minimum wage would have a positive impact on the internal market, this being a key element in a period of recession for reviving growth and developing or maintaining employment.
In its reply, the Government indicates that the high unemployment rate that currently exists in the country constitutes the main obstacle to increasing the minimum wage. The Government refers to a study published in September 2011 by the Universities of Porto and Minho, the conclusions of which report a negative impact on employment of the increases in the minimum wage since 2006, particularly for the most vulnerable categories of workers, and which emphasizes that immediately increasing the minimum wage to €500 would result in a reduction in the employment rate of between 0.01 and 0.34 per cent.
The Committee also notes a study published in January 2012 by the Bank of Portugal on the impact of the minimum wage on the lowest paid workers, which also underlines the negative impact on employment of the recent increases in the minimum wage and, because of the greater staff turnover in companies, their detrimental effect on productivity, training and corporate progress in the internal labour market. The Government further refers to the extreme fragility of the Portuguese labour market, which features a high rate of unemployment and a significant percentage of newcomers to the labour market who are earning the minimum wage. The Government indicates that the decision relating to the fixing of the minimum wage is preceded by a hearing held with the social partners within the CPDS. It explains that the amount of the minimum wage was frozen in 2012 in the context of the financial assistance programme which was the subject of the agreement between the Portuguese Government, the European Commission, the ECB and the IMF. However, the Government asserts that the above considerations do not mean that it considers this subject any less relevant and it has proposed to the CPDS, as follow-up, to conduct a study on the evolution of the minimum wage for 2013.
The Committee notes that the Government, faced with the worsening financial situation of the country, requested and obtained financial assistance from the European Union and the IMF, and that the MoU establishing an economic adjustment programme for the 2011–14 period was concluded on 17 May 2011. It notes that, under the terms of the MoU, the Government undertook, in return for the financial aid granted, to only make increases in the minimum wage if the latter were justified by changes that had occurred in economic and labour market terms, and only after the conclusion of an agreement to this end as part of a review of the financial assistance programme. The Committee notes that the Government, as part of the implementation of the MoU, decided to increase the amount of the minimum wage to €485 for 2011 – and not to €500, as had been agreed in a tripartite agreement concluded in 2006 – and to freeze this amount for 2012.
The Committee is fully aware of the significant economic difficulties currently faced by the Government and notes the conclusions of the economic studies attached to its report describing the negative impact on employment caused by the latest increases in the minimum wage. However, the Committee wishes to recall that “minimum wage fixing should constitute one element in a policy designed to overcome poverty and to ensure the satisfaction of the needs of all workers and their families”, as emphasized in the Minimum Wage Fixing Recommendation, 1970 (No. 135), which complements Convention No. 131. It notes from the information sent by the Government in its report that the percentage of full-time workers who are paid the minimum wage increased from 6 per cent in 2007 to 11.3 per cent in 2011, and that decisions taken with regard to the minimum wage therefore have an impact on a large number of workers.
The Committee recalls that Article 3 of the Convention requires that the elements to be taken into consideration in determining the level of minimum wages must include not only economic factors, such as employment policy objectives, but also the needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits, and the relative living standards of other social groups. The Committee further recalls that the Global Jobs Pact, adopted by the International Labour Conference in June 2009 in response to the global economic crisis, underlines the relevance of ILO instruments relating to wages, in order to prevent a downward spiral in labour conditions and build the recovery (paragraph 14), suggests that governments should consider options such as minimum wages that can reduce poverty and inequity, increase demand and contribute to economic stability (paragraph 23), and asserts that, in order to avoid deflationary wage spirals, minimum wages should be regularly reviewed and adapted (paragraph 12).
The Committee considers that the fixing of fair minimum wages, in concertation with the social partners, constitutes a key element of the Decent Work Agenda and contributes to achieving the objectives of social justice and peace and the prevention of unfair competition, which the ILO has pursued since its creation. Moreover, as underlined by the Global Jobs Pact, the regular adjustment of minimum wages in the context of economic crisis can avoid deflationary wage spirals and promote economic recovery as a result of stimulation of demand. In any case, the Committee stresses the fundamental nature of the principle of full consultation and direct participation, on an equal footing, of the social partners in the application of the minimum wage fixing machinery. This principle should be observed under all conditions, since the implementation of an economic adjustment programme or, in more general terms, an austerity policy in response to a crisis situation cannot release governments from their responsibilities in this field. On the contrary, the principle of full consultation and direct participation of the social partners assumes particular importance in periods of economic and social crisis, owing to the considerable repercussions that decisions relating to the fixing and periodic adjustment of minimum wages are likely to have on economic policy, including employment policy, and the purchasing power of workers. Open and constructive social dialogue facilitates the adoption of balanced measures to ensure a fair division of the efforts to be made to overcome the crisis, thereby promoting support for reforms and the maintenance of social cohesion. The Committee therefore hopes that the Government will conduct useful and effective consultations with employers’ and workers’ organizations represented within the Standing Committee on Social Dialogue before taking any decisions regarding the possible readjustment of the amount of the minimum wage, and that it will take full account in its decision-making as much of the needs of workers and their families as of economic policy objectives.
Article 2(1). Binding force of the minimum wage. The Committee refers to its previous comment, in which it noted that the penalties established by Act No. 35/2004 issuing implementing regulations for the Labour Code of 2003 did not apply to infringements of the provisions of this Act establishing minimum wage rates for apprentices, trainees and workers with reduced working capacity. It notes that the UGT asserts in its observations that Act No. 7/2009 of 12 February 2009 issuing the new Labour Code still makes no provision for penalties in the event of failure to apply the minimum wage applicable to apprentices, trainees and interns, which is 20 per cent lower than the minimum wage applicable to other workers. The UGT considers that section 275 of the Labour Code of 2009 should be amended in order to provide for specific penalties for failure to observe the minimum wage applicable to these categories of workers. The Committee requests the Government to specify what penalties are applicable for failure to comply with section 275(1) of the Labour Code. If such penalties are not provided for by the Labour Code, the Government is requested to indicate the measures that it is contemplating in order to ensure that the workers concerned are not paid wages lower than the minimum fixed by this provision.
[The Government is asked to reply in detail to the present comments in 2013.]

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The Committee notes the detailed information contained in the Government’s report and attached documents, in particular the adoption of the new Labour Code, Act No. 99/2003 of 27 August 2003 and relevant Regulations, Act No. 35/2004 of 29 July 2004.

Articles 1 and 2 of the Convention. Coverage of the system of minimum wages. Further to its previous comment on the differentiated minimum wage for domestic work, the Committee notes with interest that by Decree-Law No. 19/2004 of 20 January 2004, a single national minimum wage was for the first time established thus aligning the minimum wage for domestic services with that for other activities.

In addition, the Committee notes the Government’s reference to Act No. 35/2004, section 209(1)(a) of which provides that the minimum wage for apprentices and trainees may be 20 per cent lower than the national minimum wage. Such reduction, however, may not exceed a period of one year, including training time spent elsewhere provided it is documented and for the same qualification. As regards measures to enforce these provisions and thereby prevent abuse of the system of reduced minimum wages for apprentices, the Government refers to section 483 of the same Act concerning serious breaches of the rules governing the guaranteed minimum monthly wage, and the corresponding monetary fines. The Committee notes, however, that the sanctions provided for in section 483 do not apply to offences related to section 209 which provides for the reduced minimum wage rates for apprentices, interns, and workers with reduced working capacities. It therefore requests the Government to provide further clarifications on this point.

Article 3. Factors applied for fixing minimum wages. The Committee notes that under section 266 of the new Labour Code, the guaranteed minimum monthly wage is updated annually after consultation with the Permanent Commission for Social Dialogue (Comissão Permanente de Concertação Social) taking into account workers’ needs, increases in the cost of living and productivity trends. It also notes that under section 210 of the Regulations, the adjustment of the guaranteed minimum monthly wage is intended to satisfy the criteria of the wages and income policy. The Committee requests the Government to continue to provide information on the work of the Permanent Commission for Social Dialogue as regards the periodic adjustment of the national minimum wage, for instance, copies of annual reports, official studies or surveys of national economic conditions serving as basis for its discussions, etc.

Article 4. Consultations with employers and workers. The Committee notes the information according to which the Permanent Commission for Social Dialogue concluded an agreement in December 2006 for increasing the guaranteed minimum monthly wage at €450 by 2009 and adopting a medium-term target of €500 in 2011. The agreement further provided that the intermediate rates fixed by the Government will be subject to annual review by a tripartite committee composed of representatives of the social partners and the Government. The Committee also notes the observations of the Portuguese Confederation of Tourism (CTP), the General Confederation of Portuguese Workers (CGTP) and the General Workers’ Union (UGT), all referring to the importance of that agreement. The Committee welcomes the conclusion of the agreement under conditions fully in line with the requirements of this Article of the Convention concerning the direct participation of and full consultation with employers’ and workers’ organizations, and requests the Government to keep it informed of its future implementation.

Article 5 and Part V of the report form. The Committee notes the information provided by the Government regarding the evolution of the guaranteed minimum monthly wage in the period 2002–07 and the minimum wage rates provided for under sectoral collective agreements concluded in 2004 and 2005. It also notes the statistics concerning the number of inspections conducted and proceedings initiated in respect of minimum wage-related offences in the period 2004–06. The Committee would appreciate if the Government would continue providing up to date information on the practical application of the Convention.

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The Committee notes with interest the information provided by the Government in its latest report and the observations of the General Union of Workers (UGT).

I.  Factors applied in adjusting minimum wages

1. The Committee notes that the most recent factors taken into account for the purpose of fixing minimum wages are: wages determined by agreements; actual average income; and the consumer price indices. The Government also states that minimum wages since 1995 have risen at a faster rate than prices or wages determined by agreements. Average income continues to rise at a faster rate than minimum wages, although the disparity between the two shows signs of diminishing. Lastly, the Government indicates that the revision of the minimum wage has been reflected in a rise that matches in full the forecast rise in prices and takes into account, fully or partially, the estimated rise in labour productivity. The Government emphasizes that the rise in the minimum wage is closely linked to the rise in productivity, so that workers receiving the minimum wage benefit from economic growth.

2. The UGT considers that the increase in minimum wages should match the commitments entered into under the Strategic Concertation Pact and reflect the need to bring Portuguese wages and living standards into line with the EU average, and that in addition it should be set at a higher rate than the average rate of wage increases. The Committee notes that, according to the Government, the questions raised by the UGT concern the Strategic Concertation Pact, rather than factors relating to the application of the Convention.

II.  Wages in the domestic sector

3. The Committee notes that, according to the Government, the minimum wage in the domestic sector has risen faster than in other areas of activity. It also states that the minimum wage in the domestic sector is expected to reach the same level as wages in other areas by January 2004.

4. In this regard, the UGT stresses the need to harmonize the national minimum wage and the minimum wage in the domestic sector. Bearing in mind the information supplied by the Government in its report, the Committee requests the Government to keep it informed of any changes in the minimum wage in the domestic sector by comparison with the national minimum wage.

III.  The minimum wage for apprentices

5. The Committee recalls that, according to section 4 of Act No. 45/98 of 6 August 1998, the minimum wage for apprentices and workers undergoing training may be reduced by 20 per cent in accordance with the procedures set out in the Act. The Committee had noted previously that, in the view of the General Confederation of Portuguese Workers (CGTP-IN), employers were resorting to the practice of employing apprentices and workers undergoing training with a view to paying lower wages.

6. Since the Committee has received no response to its request for information on this matter, it feels bound once again to request the Government to provide information on the measures adopted to prevent any abuse of section 4 of Act No. 45/98.

IV.  Practical application of the Convention

7. The Committee notes the information, supplied by the Government in response to its previous observations, on the measures adopted to enable workers who have suffered as a result of violations of minimum wage provisions to appeal to the labour inspection authorities or directly to the labour courts. The Government states in addition that the labour inspection authorities carry out advisory and supervisory activities.

8. The Committee also notes the information supplied on the number of inspections carried out in 2001 (40,312), covering more than 300,000 workers.

9. The Committee requests the Government to continue to keep it informed on any developments with regard to the practical application of the Convention, indicating among other things the number of workers receiving the national minimum wage or the domestic sector minimum wage, the number of inspections carried out and the number of contraventions recorded.

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The Committee notes the extension in 1998 of the statutory coverage of the minimum wage to the domestic sector, in which the rate of the minimum wage was the lowest of all sectors. It also notes that the adjustment of the minimum wage in the domestic sector has generally been higher than in other sectors, with a view to bringing it progressively closer to the level of wages in industry and services, as occurred with the minimum wage in agriculture as from 1991. The Committee requests the Government to continue providing information in future reports, as it has done up to now, on changes in the minimum wage in the domestic sector in accordance with Article 1 of the Convention.

The Committee notes that Act No. 45/98 of 6 August 1998 established a minimum wage irrespective of the age of the worker, thereby abolishing the reduction of 25 per cent in the minimum wage envisaged for workers under 18 years of age. The Committee notes that, in accordance with section 4(1)(a), (2), (3) and (4) of Act No. 45/98, the minimum wage of apprentices and workers during periods of training may be reduced by 20 per cent. This reduction cannot be made for a period of more than one year and may be even limited to six months in the circumstances envisaged in section 4(3) (workers who have followed vocational technical training). Under the terms of section 4(5), it is the responsibility of the employer to ensure that there is no violation of the principle that "equal wages shall be paid for equal work".

The Committee recalls that it noted, according to the General Confederation of Portuguese Workers (CGTP-IN), that employers resort to the practice of employing apprentices and workers undergoing training with a view to paying lower wages. Taking into account the fact that the Government confines itself to recalling the provisions of section 4(1)(a), (2), (3) and (4) of Act No. 45/98, the Committee requests the Government to provide information on the measures adopted to prevent any abuse of these provisions of the Act.

The Committee also notes that, according to the Government, workers with reduced capacity for work, where such reduction is equivalent to the difference between full capacity for work and the coefficient of the actual capacity for the performance of the work or for determined activities, and where such a difference is over 10 per cent, do not receive the entire minimum wage, although their remuneration may not be reduced by more than 50 per cent, without prejudice to the principle that "equal wages shall be paid for equal work".

The Committee hopes that the Government will continue to provide general information on the application of the Convention in practice, and particularly on the results of inspections carried out (for example, the number of violations of minimum wage provisions reported, the penalties imposed), in accordance with Article 5 of the Convention and Part V of the report form.

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With reference to its previous comments, the Committee notes with satisfaction the publication of Act No. 45/98, of 6 August 1998, which repeals section 4(1)(a) of Act No. 69A/87, as amended, thereby abolishing the minimum wage for young persons under 18 years of age, which could be 25 per cent lower than the established minimum wage.

The Committee also notes the new observations made by the General Confederation of Portuguese Workers (CGTP-IN).

1.  The Committee notes that, according to the CGTP-IN, despite the fact that the National Constitution and Article 3 of the Convention provide that in determining the level of minimum wages account shall be taken first of social factors and then of economic criteria, in practice economic criteria prevailed in the adjustment of the minimum wage. In this respect, the CGTP-IN emphasizes that, in determining the level of the minimum wage, consideration was not given to the general level of wages in the country nor the living standards of other social groups, and that the minimum wage policy has been converted into a method of controlling and limiting wages and has ceased to be effective through the failure to adjust it to the average increase in wages (the ratio of the minimum wage to the average wage fell from 59.4 per cent in 1990 to 52.7 per cent in 1997), despite the increased stability over the past three years. In 1998, there appeared to be a new calculation of the minimum wage after an increase of 5.3 per cent in the average wage, according to official estimates, and 3.9 per cent in the minimum wage. The CGTP-IN adds that the rate of increase of the minimum wage was lower on average than that of the average living standard of the population during the 1990s, with the exception of 1993 (a year of economic recession). The CGTP-IN argues that these figures show the inequalities which exist in the distribution of the fruits of production between low wage-earners (who earn the minimum wage) and the average earnings of other categories of workers. The CGTP-IN considers that this situation is contrary to the objectives of the Convention, since the concept of "excessively low wages" has to be considered in the framework of the average wage and the earnings of other categories of workers. Secondly, the Committee notes the statement by the CGTP-IN that the minimum wage has been used as an instrument of wage moderation under the pretext that it is necessary to prevent a domino effect leading to rises in other wages. In this respect, it is significant that the Inter-Ministerial Working Group on the Minimum Wage omitted to consider in its reports on the adjustments for 1999 and 2000, as a development hypothesis, the level of inflation in relation to productivity (this criterion generally means that when real wages rise in relation to productivity, they retain the same share in the distribution of national income), and only considered lower estimates of the above figures. Thirdly, the Committee notes that, according to the CGTP-IN, the predominance of economic criteria in social dialogue agreements has been confirmed, for example in the Strategic Dialogue Agreement of 1996, which was not signed by the CGTP-IN and under the terms of which "the minimum guaranteed remuneration, in view of its social function and its contribution to employment promotion, will be adjusted annually in relation to the inflation rate of market goods and the rise in productivity in the most visible sectors of the economy, with a view to ensuring that increases are more rapid than for the average wage".

The Committee also notes that, according to the CGTP-IN, a positive aspect is that the adjustment of the minimum wage for 2000 took place before the end of 1999 and was published in the relevant legislation (Legislative Decree No. 573/99 of 30 December). The CGTP-IN requested the Government to do the same before 1 January each year at the time of the coming into force of the minimum wage so that workers and employers are aware of the rate which will be applied.

The Committee notes the CGTP-IN’s statement that the system of labour penalties was revised in 1999 (Act No. 118/99, of 11 November), which has implications for the penalties applicable for failure to comply with the minimum wage legislation.

2.  The Committee notes that in its reply the Government indicates that the annual rate of increase of the minimum wage between 1990 and 2000 was higher than the rise in consumer prices (except in 1993 and 1994) and also higher than the annual adjustment of wages determined by collective agreement (except in 1990, 1993 and 1994), despite being below the annual rise in real average wages in the labour market. The Committee notes the Government’s indication that workers paid the minimum wage have seen their purchasing power rise and that, since 1995, this purchasing power has followed the same curve without interruption. The Committee notes also that in recent years the difference between the rise in the minimum wage and the rise in the average wage has decreased and that the rates of wage increases determined by collective agreement have been rather lower than those of the minimum wage.

The Committee also notes the Government’s statement that the adjustment of the minimum wage in recent years has complied with the guidance provided in this Convention and the Strategic Dialogue Agreement of 1996. Nevertheless, the Inter-Ministerial Working Group on the Minimum Wage, when calculating the adjustment of the minimum wage, did not take into account the inflation rate for market goods or the rise in productivity in the most visible sectors of the economy, as envisaged by the above agreement, which was rejected by the CGTP-IN, for reasons of practical difficulties in applying such criteria, as well as the expected fluctuations in such indicators. As a result, in view of the expected rise in inflation and productivity, the increase in the minimum wage has been above the average rise in wages determined by collective agreement. The adjustments made since 1995 have totally covered the rise in the consumer price index and a proportion (generally around two-thirds) of the expected rise in productivity. Between 1997 and 1999, this rise was generally higher, due to the fact that the growth of employment was greater than expected, which resulted in a real increase in the minimum wage which, for three years, matched the total increase in labour productivity.

The Committee takes note of the information provided by the Government in respect of the comments by the CGTP-IN and hopes that the Government will continue to provide information on the measures adopted with regard to the determination of minimum wages and the maintenance of the purchasing power of such wages.

The Committee refers to its direct request in which it is raising other matters relating to the application of the Convention.

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The Committee notes the detailed information provided in the Government's report in reply to previous comments, in particular with respect to the application of minimum wage provisions to homeworkers. It requests the Government to continue supplying in its future reports, in accordance with Article 2, paragraph 1, of the Convention in conjunction with Article 5 and point V of the report form, general information on the application of the Convention in practice, including: (i) the minimum wage rates in force; (ii) the available data on the number and different categories of workers covered by minimum wage provisions; and (iii) the results of inspections carried out (e.g. the number of violations of minimum wage provisions, the penalties imposed, etc.).

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1. The Committee notes the detailed information provided in the Government's report in reply to its previous comments, as well as the observations made by the General Confederation of Portuguese Workers (CGTP) concerning infringements in the application of the Convention.

2. According to the CGTP, the level of the national minimum wage can be reduced according to sector of activity (for instance, domestic service), age, occupational skills and work capacity. This reduction can reach up to 50 per cent of the minimum wage for workers with a reduced capacity to work, and up to 20 per cent for workers aged between 18 and 25 in categories considered to constitute training for qualified or highly qualified professions (apprentice, trainees, etc.). This practice, which does not take into account the fact that young people today have higher levels of qualification, is used by employers as a way of paying lower wages to young people.

3. The CGTP also observes that the criteria for the adjustment of the minimum wage, provided by the Convention, have been disregarded in favour of economic criteria. The Government and the employers have defended making only minor updates of the minimum wage, arguing that it is necessary to avoid a knock-on effect on the increase of other wages. Therefore, the minimum wage policy has become a method of controlling and restricting wages in general, and has lost its effectiveness by not keeping pace with the average wage growth (from 59.4 per cent in 1990 to 51.3 per cent in 1994) and falling in real terms vis-à-vis inflation (from 0.3 per cent in 1993 to 1.3 per cent in 1994). In addition, the CGTP quotes the Agreement on Strategic Dialogue of December 1996 which provides that: "The guaranteed minimum remuneration, taking into account its social function and also its contribution to employment promotion, shall be updated annually taking as a reference the rate of inflation of tradable goods and the productivity gains obtained in the exposed sectors of the economy, to ensure that it increases faster than the average wage." According to the CGTP, the criteria established in this Agreement (not signed by the CGTP-IN) to keep the minimum wage up to date, do not take due account of the provisions of the national Constitution or of the Convention for the following reasons: (i) it takes an economic view of the minimum wage, thus weakening its social function; (ii) inequalities are increasing; (iii) this quoted provision is incorporated in the medium-term agreement, and, as a result, could have negative repercussions on the minimum wage level, not only in 1997 but also in 1998 and 1999.

4. The CGTP further states that the updating of the minimum wage levels to be applied in 1997 constituted a serious violation of the right to participation of trade union organizations, as provided in the Convention and in the national law. According to the CGTP, on 27 December 1996, the Government announced that the Council of Ministers had approved the minimum wage revision for 1997, the exact content of which was made known through the media, without informing or holding prior consultations with the trade union organizations. In response to trade union criticism the Government arranged a meeting with the Permanent Committee for Social Dialogue on 8 January 1997. The report of the Interministerial Working Party on the Minimum Wage was only sent the day before the meeting. This report, contrary to the usual practice, did not contain a number of possible options for debate. It simply defended the amounts decided by the Council of Ministers, and no alterations were made to the minimum wage levels already decided. This exchange constituted, according to the CGTP, nothing more than simulated consultation.

5. In reply to the CGTP's observations, the Government indicates that comments from the corresponding agencies and their replies are being awaited, and that the ILO will be duly informed as soon as these elements are received.

6. The Committee hopes that the Government's comments in reply to the above CGTP's observations will be provided in the near future.

7. A request on other matters is also being directly addressed to the Government.

[The Government is asked to report in detail in 2000.]

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1. The Committee notes the information provided in the Government's report, in particular, concerning Articles 4 and 5 of the Convention, in reply to its previous comments.

2. The Committee notes that, in virtue of section 6, subsection (1), of Legislative Decree No. 440/91, account should be taken in fixing the remuneration for homework, of the average time spent and the rates of remuneration laid down in the collective regulatory instrument applicable if the work is carried out in the undertaking or, in the absence of such an instrument, the guaranteed minimum monthly remuneration. It notes, however, that section 13 of the said Legislative Decree concerning sanctions does not provide for sanction applicable to the infringement of section 6, subsection (1). The Committee requests the Government to indicate measures taken or envisaged to provide for sanctions in this regard and to ensure that the extension of the minimum wage system to homeworkers should not be subject to abatement, in accordance with Article 2(1) of the Convention. It would also be grateful if the Government would continue providing information on the practical application of the minimum wages as required under Article 5 and point V of the report form, with particular reference to homeworking trades.

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Article 1, paragraph 2, of the Convention. With reference to the previous comments, the Committee notes with satisfaction that sections 5 and 6 (as amended) of Legislative Decree No. 69-A/87 of 9 February 1987, which provided for the possible exceptions to the application of the minimum wage in view of the number of workers in the undertaking and on the grounds of the increase of the employers' burden, were repealed, respectively, by Legislative Decree No. 14-B/91 of 9 January 1991 and by Legislative Decree No. 41/90 of 7 February 1990.

The Committee also notes with interest that Legislative Decree No. 440/91 of 14 November was adopted and provides for regulations concerning homework, including the aspect of wage fixation. It notes that the Confederation of Portuguese Industry (CIP) refers, in its comments communicated with the Government's report, in particular, to the publication of this legislative decree. The Committee is addressing a direct request to the Government concerning this legislative decree and certain other points.

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