Observation (CEACR) - adoptée 2010, publiée 100ème session CIT (2011)

Article 12 of the Convention. Payment of wages at regular intervals. The Committee notes the Government’s detailed report in reply to the observations of the International Trade Union Confederation (ITUC), which were forwarded to it on 18 September 2009. The ITUC had reported significant problems of wage arrears, principally in the sugar cane, metal industries and textile sectors, with delays in payment ranging from two to 12 months. The Committee recalls that it has been commenting on this issue since 2005 and that the Office carried out two missions in 2006 and 2007, following the examination of the situation on two occasions by the Conference Committee on the Application of Standards, with a view to gathering concrete figures on wage arrears and the number of workers affected in order to gain a better understanding of the nature and scope of the problem.

In its report, the Government admits that the accumulation of wage arrears is in contravention of the letter and the spirit of the Convention and states that it is determined to accelerate its efforts to find appropriate solutions to the problem of the delayed payment of wages through social dialogue and better implementation of active labour policy, labour legislation and other corresponding laws and regulations. It reiterates that wage arrears are due, among other reasons, to unfair globalization causing inequalities both within and between nations, the lack of competitiveness, the scarcity of skilled labour and the lack of investment in human resources development at the enterprise level, the outdated equipment used in plants, the weakness of supporting industrial infrastructure, the privatization of state industries, low productivity and the rapid increase in wages, which are making certain industries, such as textiles, sugar and steel production, more fragile. In this respect, the Government indicates that it is continuing to invest massively in enterprises experiencing difficulties with a view to renewing the means of production and improving productivity, saving jobs and avoiding labour conflict. The Government adds that programmes are proposed for the payment of debts in instalments, together with managerial advice.

I.         Monitoring and evaluation of the situation of wage arrears

The Government indicates that 680 large and medium-sized enterprises have encountered problems, including problems of delayed payment of wages, including 459 public enterprises and 71 private enterprises. It adds that, of these enterprises, 311 have reported problems relating to wage arrears classified as mild to serious, while mismanagement and lack of flexibility were identified as the reasons for similar problems in 89 other enterprises. The Government finally indicates that these figures do not include small workshops in the informal economy, which must have been more adversely affected by the crisis. With regard to the court proceedings initiated in this field, the Committee notes that 80,972 complaints were lodged in 2007, resulting in 51,872 rulings in favour of 61,385 workers. Similarly, 85,626 complaints were lodged in 2008 resulting in 45,765 rulings in favour of 59,215 workers. With reference to the monitoring of the situation, the Committee notes the Government’s indication that the number of inspections is constantly increasing (a 45.6 per cent increase in 2008 in scheduled inspections and a 14.7 per cent increase in unscheduled inspections), as well as an increase in the staff of the inspection services (rising from 531 inspectors in 2007 to 821 in 2009). It notes that labour inspectors have a new form that has been prepared to include inspection of the payment of workers’ wages. In the event of problems due to the non-payment of wages, labour inspectors have to note the amount of the arrears and the period, in months, during which the wages have not been paid. The Committee also notes the establishment of working groups in each province to supervise the payment of wages and, where necessary, to report the non-payment of wages and any arrears that build up. Finally, the Committee notes the indication that some concrete steps still have to be taken for the analysis of the data collected by the labour inspection services, but that more detailed statistical data will be provided in future reports on the amount of wage arrears, the sectors and regions most affected, and estimates of the delays in the payment of wages.

II.        Situation of wage arrears in the sugar cane, textile and metal sectors

The Government indicates that in the sugar cane sector covered by Decree No. 40030.53539 of June 2008, the enterprise Haft Tapeh Sugar is now under the control of the Industrial Development and Renovation Organization (IDRO), the main task of which is to pay the wages due to the 17,000 workers in the enterprise. The Committee notes that 2,477,647,642 rials (or approximately US$250,000) have been paid in wage arrears and that, as of October 2009, all the workers had received what was owed to them. It also notes the Government’s indication that the delay in the payment of wages, which used to be three months, is now one month.

In the textile sector, which accounts for 280,000 jobs in 9,400 enterprises, the Government indicates that the delay in the payment of wages ranges from two to four months, particularly in the province of Mazandaran. It notes that the debts of 43 major enterprises in this sector have been rescheduled over several months, and even years, depending on the gravity of their financial problems, and that the Government is continuing to invest massively in this sector and in renovation programmes (US$4 billion in 2008). However, the Government does not provide any specific indication of the amount of wage arrears in the metal industry sector, or on any progress made in this respect.

While noting this information, the Committee observes that wage arrears are far from being resolved and that the international economic and financial crisis has only aggravated already existing structural factors. The Committee therefore requests the Government to continue providing detailed information, and particularly statistical data, on the amounts of wage arrears and the sectors affected. It also requests the Government to keep the Office informed of any new legislative, administrative or other measures intended to ensure the regular payment of wages, as required by Article 12 of the Convention.

In this respect, the Committee recalls its general observation of 2009 on wages which refers to the Global Jobs Pact, adopted by the International Labour Conference in June 2009 in response to the global economic crisis. The Pact places particular emphasis on the need to strengthen respect for international labour standards and explicitly identifies ILO instruments on wages as being relevant in order to prevent a downward spiral in labour conditions and build recovery (paragraph 14). The Committee wishes to emphasize that the Protection of Wages Convention, 1949 (No. 95), in particular, seeks to prevent wage arrears, which not only deprive workers of means of subsistence and therefore lower consumption, but also imply poor tax revenues and reduced public spending, thus leading to a vicious circle that affects the entire economic and social tissue of society. The Committee recalls that in view of the complexity of the issues, progress in this field can only be made through cooperation with the social partners. Implementing reforms and reaching compromise solutions in a crisis environment needs constant and genuine social dialogue. Drastic conditions also call for strict monitoring and enhanced enforcement, which in turn implies the strengthening of labour inspection services and a system of truly dissuasive and effective sanctions.