The National Wage Consultative Council Act: A National Minimum Wage or a National Living Wage?
On 22 April 2016, the Honourable Soodesh Callichurn, Minister of Labour, Industrial Relations, Employment and Training (the “Minister”), tabled the National Wage Consultative Council Bill at the National Assembly. The National Wage Consultative Council Act (“Act”) has been gazetted on 28 May 2016 and yet to be proclaimed. One of the objects of the Act is stated to be the “introduction of a national minimum wage in the private and public sectors.”
Concept of ‘minimum wage’
No instrument of the International Labour Organisation (“ILO”) defines the concept of “minimum wage”. In a Survey on minimum wages published in 1992, the Committee of Experts on the Application of Conventions and Recommendations (Articles 19, 22 and 35 of the Constitution of the ILO) considered, at paragraph 42, that the minimum wage may be understood to mean “the minimum sum payable to a worker for work performed or services rendered, within a given period, whether calculated on the basis of time or output, which may not be reduced either by individual or collective agreement, which is guaranteed by law and which may be fixed in such a way as to cover the minimum needs of the worker and his or her family, in the light of national economic and social conditions”.
It is, however, apposite to note that several international instruments recognise the right to a decent wage. For example, Article 23, paragraph 3, of the Universal Declaration of Human Rights provides that everyone who works has “the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection”.
Scope of the Act
The Act promotes an overall minimum wage for both the public and private sectors, without an industry or sector basis policy. The Act, however, strikes a difference between “part-time workers” and “full-time workers”. Minimum wage for part-time workers will be calculated on an hourly rate as compared to full-time workers, whose minimum wage will be calculated on a monthly rate. The actual working hour system, whether 40 or 45 hours a week or 9 hours a fortnight, and the mode of calculation of wages and salary of a worker are not likely to be amended nor affected.
Individuals assigned under apprenticeship schemes, implemented to facilitate the placement of jobseekers in gainful employment, such as those provided by the Mauritius Institute of Training and Development, the Youth Employment Programme or the Back to Work Programme are however not concerned with the a minimum wage as contemplated under the Act; hence, no minimum wage will be applicable for them.
Calculation of the minimum wage
The national minimum wage will be calculated on a proportion of domestic median wage; the same method as adopted by all countries having a national minimum wage. Section 2 of the Act defines “median wage” as the boundary between the highest 50 per cent and the lowest 50 per cent of wage earners in the wage distribution in Mauritius as determined by Statistics Mauritius.
The National Wage Consultative Council
The Act provides for the establishment of a Council, the National Wage Consultative Council (“Council”) which will have the responsibility to make recommendations to the Minister for the introduction of a national minimum wage. The Council is also responsible to evaluate the effect of the introduction of the minimum wage on several items such as pay structures and pay differentials, wealth and income distribution, wage ratio, employment, inflation, competiveness, etc. The Council will, however, have no discretion on the issue of determination of additional remuneration.
The Council will address the issue of wage relativity in the private sector that may arise following the introduction of the minimum wage in Remuneration Regulations made under the Employment Relations Act with the introduction of a master conversion table.
Upon receipt of recommendations from the Council, the Minister can implement the recommendations by way of regulations, reject or make such other regulations as he thinks fit. However, in situations where the Minister rejects a recommendation of the Council and make such other regulations as he thinks fit, he shall lay a report in the National Assembly detailing the reasons of his decision.
The Council will be administered and managed by a Board which is comprised of the different stakeholders in the country, such as 4 members of any worker’s organisation representing workers employed in the private sector and 3 members of any worker’s organisation representing workers employed in the public sector. Employers, different other Ministries, including the Prime Minister’s Office, the Pay Research Bureau too will have their representatives on that Board.
A national minimum wage will, it is hoped, protect low-paid workers against exploitation, without causing job losses. Finally and strangely enough, the Act introduces the concept of ‘living wage’ by providing that when making recommendations to the Minister, the Council will “have regard to the need to improve the living conditions of the lowest paid workers and promote decent work and living conditions”. These two expressions are conceptually different. Could this consideration which the Council must take into account when making recommendations pave the way for a National Living Wage in the future? Only Time Will Tell.