Definitive Report - Report No 320, March 2000

1. 838. The Committee examined the substance of this case at its November 1999 meeting when it presented an interim report to the Governing Body (see 318th Report, paras. 596-618, approved by the Governing Body at its 276th Session (November 1999)).
2. 839. The Government furnished its observations in a communication dated 30 December 1999.
3. 840. Zambia has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. Previous examination of the case

1. 841. During its previous examination of this case, the Committee had noted that the allegations in this case concerned the imposition of a wage freeze in the public service for 1998 prior to which no consultations were held with the unions concerned. The Committee had concluded that no consultations had been held between the Government and the trade unions concerned prior to the Government's decision to impose a wage freeze for all workers in the public service and in government-aided institutions for 1998; it had asked the Government to follow in future an adequate consultation procedure when it sought to alter bargaining structures in which it acted as employer. With regard to the compatibility of the wage restraint measure itself with collective bargaining principles, the Committee had noted that the wage freeze was imposed for a 12-month period pursuant to which collective bargaining resumed in the public service. The Committee had therefore considered the wage freeze to be an exceptional measure which was temporary in nature. It had nevertheless noted that the wage freeze was not accompanied by adequate safeguards to protect workers' living standards, especially those with a low income, and had trusted that the Government would refrain from taking such measures in the future.
2. 842. At its November 1999 session, in light of the Committee's interim conclusions, the Governing Body approved the following recommendations:
   • (a) The Committee expects that in future the Government will follow an adequate consultation process when it seeks to alter bargaining structures in which it acts actually or indirectly as employer.
   • (b) The Committee regrets that the Government did not give priority to collective bargaining as a means of determining the employment conditions of its public servants, but rather that it felt compelled to unilaterally, without consulting the trade unions concerned and without ensuring adequate safeguards to protect workers' standards of living, freeze all wages in the public service for a year. The Committee trusts that the Government will refrain from taking such measures in the future.
   • (c) The Committee requests the Government to provide information on compelling reasons for adopting the wage freeze.

B. The Government's reply

1. 843. In a communication dated 30 December 1999, the Government states that while the issue of the wage freeze for the public service was not discussed by the Tripartite Consultative Labour Council at the September 1997 meeting, it is incorrect to suggest that the public service unions were not aware of the wage freeze nor the rationale for putting the freeze in place. The Government points out that the two public service unions, namely the Civil Servants' Union of Zambia and the National Union of Public Service Workers, were intimately involved in the implementation of the Public Service Reform Programme (PSRP) at the level of the steering committee where the components of the reform programme, including the wage restraints for 1998, were fully considered and discussed. Furthermore, a special consultative meeting was held on 3 October 1997 at which the Government fully briefed the Civil Servants' Union of Zambia and the National Union of Public Service Workers' representatives, on the 1998 revised programme of the PSRP, its targets and time frame. At that meeting the two unions were particularly apprised that, until the restructuring process was firmly under way, there would be a wage restraint in the public sector during 1998. Emphasis was also made of the fact that there could be no meaningful wage/salary increase until the civil service had been substantially reduced. It is thus the Government's considered view that adequate dialogue was undertaken by it with the two unions directly involved in the matter.
2. 844. With regard to the Committee's recommendation to give priority to collective bargaining as a means of determining the employment conditions of public servants, the Government stresses that it is committed to collective bargaining in all spheres of economic activities including the public service. The wage freeze in 1998 was of a temporary duration and designed for a particular purpose, namely to facilitate the PSRP. Moreover, in an effort to assist workers, particularly those affected by the wage freeze, the Government, through the budget for 1998 offered a 40 per cent increase in value of the tax credit. Furthermore, the structure of the budget was such that fiscal policy together with a tight monetary stance, would result in a further decline in inflation to single-digit inflation rates. This arrangement of things could no doubt be regarded as a measure to assure value and increased take home pay for workers and thus protect workers' living standards.
3. 845. Finally, with regard to the compelling reason for adopting the wage freeze in 1998, the Government reiterates that the measure was taken to ensure that there was no distortion in the effective implementation of the PSRP, which was undertaken with the objective of achieving efficiency and cost-effectiveness in the delivery of quality service to the people of Zambia by creating a small, well-remunerated and motivated public service. Additionally, the wage freeze was adopted bearing in mind the lack of resources available to the Government, as the budget for 1998 did not provide for funds to finance increases in wages and salaries, including allowances.

C. The Committee's conclusions

1. 846. The Committee notes that the allegations in this case concern the imposition of a wage freeze in the public service prior to which no consultations were held with the unions concerned. During its previous examination of this case, the Committee had noted the contention of the complainant (ZCTU) that the wage freeze was imposed for the whole of 1998 without consulting the workers involved through their trade unions or the ZCTU. The Committee notes the Government's statement that, while the issue of the wage freeze for the public service was not discussed by the Tripartite Consultative Labour Council at a meeting in September 1997, the two public service unions, namely the Civil Servants' Union of Zambia and the National Union of Public Service Workers were intimately involved in the implementation of the Public Service Reform Programme (PSRP) at the level of the steering committee where the components of the PSRP, including the wage restraints for 1998, were fully considered and discussed. The Committee further notes the Government's statement that a special consultative meeting was held on 3 October 1997, during which the Government fully briefed representatives of the two abovementioned unions of the need for a wage freeze in the public service during 1998 in light of the targets and time frame of the PSRP. In these circumstances, the Committee considers that adequate consultations were held between the Government and the trade unions concerned prior to the imposition of a wage freeze for all workers in the public service for 1998.
2. 847. With regard to the compatibility of the wage restraint measure with collective bargaining principles, the Committee had acknowledged during its previous examination of this case that where, for compelling reasons of national economic interest and as part of its stabilization policy, a government considered that it was not possible for wage rates to be fixed freely through collective bargaining, any restrictions should be imposed as an exceptional measure and only to the extent that was necessary without exceeding a reasonable period, and should be accompanied by adequate safeguards to protect workers' living standards. The Committee had noted that the wage freeze was one of several measures which the Government had taken to facilitate the implementation of a public service reform programme. It had concluded that since the wage freeze was imposed for a 12-month period pursuant to which collective bargaining resumed in the public service, it was an exceptional measure which was temporary in nature. The Committee had nevertheless noted that this wage freeze was not accompanied by adequate safeguards to protect workers' living standards and had therefore requested the Government to provide information on compelling reasons for adopting this wage restraint measure (see 318th Report, paras. 613-615).
3. 848. In this regard, the Committee notes the Government's statement that in an effort to assist workers most affected by the wage freeze, the Government offered a 40 per cent increase in value of the tax credit. The Government further indicates that it believed that its fiscal and monetary policies would result in a further decline in inflation which could be regarded as a measure to protect workers' living standards. Finally, with regard to compelling reasons for adopting the wage freeze in 1998, the Committee notes the Government's statement that this measure was taken to ensure that there was no distortion in the effective implementation of the public PSRP. Additionally, the Committee notes that the wage freeze was imposed due to the Government's lack of resources since its 1998 budget did not provide for funds to finance increases in wages.
4. 849. The Committee notes that, during the imposition of this wage freeze for the public service in 1998, the Government did take a certain number of measures through which it attempted to protect workers' living standards. The Committee notes that, according to the complainant, these measures did not constitute adequate safeguards to protect workers' living standards, especially those with a low income, since a sizeable number of people suffered untold hardships as a result of this wage freeze (see 318th Report, paras. 600 and 615) .
5. 850. In view of the foregoing, the Committee regrets that the Government did not give priority to collective bargaining as a means of determining the employment conditions of its public employees but rather that it felt compelled to freeze all wages in the public service for a year without ensuring adequate safeguards to protect workers' standards of living. The Committee trusts that the Government will refrain from taking such measures in the future.