Payment during idle time

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1 Legal opinion Payment during idle time by Anett Olofsson within LO-TCO Baltic Labour Law Project Case 56, Lithuania 16 November 2001

2 2 Summary: Lithuanian parliament is going to adopt draft amendments of Law on labour contract. One of these amendments concerns payment of wages during idle-time. Article 4 part six of draft amendments of law on labour contract states: If employee refuses to do another compatible with his or her health job during idle-time employer can pay one third (0.3) of minimum wage -35 usd. If employee gets average wage- about 300 usd so he or she can not refuse to do any other job during idle-time otherwise they will get only 35 usd. We think that it is a sanction for employee who refuses to do any other job. Therefore this statement is in contradiction to ILO convention No. 29 on compulsory work. Article 2 of the convention says that compulsory work means any work forced to do by using threats of sanctions. We also think that draft law contradicts to ILO convention No. 131 on minimum wages. Article 2 of convention states that minimum wage has the power of law and can not be reduced. The question to the expert was: is the draft law compatible with the ILO standards. INTERNATIONAL EXPERT OPINION Applicable International law: The ILO Convention concerning Forced or Compulsory Labour, 1930 (No. 29) Article 1 1. Each Member of the International Labour Organisation which ratifies this Convention undertakes to suppress the use of forced or compulsory labour in all its forms within the shortest possible period. Article 2 1. For the purposes of this Convention the term forced or compulsory labour shall mean all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily. Article 4 1. The competent authority shall not impose or permit the imposition of

3 3 forced or compulsory labour for the benefit of private individuals, companies or associations. 2. Where such forced or compulsory labour for the benefit of private individuals, companies or associations exists at the date on which a Member's ratification of this Convention is registered by the Director- General of the International Labour Office, the Member shall completely suppress such forced or compulsory labour from the date on which this Convention comes into force for that Member. The ILO Convention concerning Minimum Wage Fixing, 1970 (No. 131) Article 1 1. Each Member of the International Labour Organisation which ratifies this Convention undertakes to establish a system of minimum wages which covers all groups of wage earners whose terms of employment are such that coverage would be appropriate. 2. The competent authority in each country shall, in agreement or after full consultation with the representative organisations of employers and workers concerned, where such exist, determine the groups of wage earners to be covered. 3. Each Member which ratifies this Convention shall list in the first report on the application of the Convention submitted under article 22 of the Constitution of the International Labour Organisation any groups of wage earners which may not have been covered in pursuance of this Article, giving the reasons for not covering them, and shall state in subsequent reports the positions of its law and practice in respect of the groups not covered, and the extent to which effect has been given or is proposed to be given to the Convention in respect of such groups. Article 2 1. Minimum wages shall have the force of law and shall not be subject to abatement, and failure to apply them shall make the person or persons concerned liable to appropriate penal or other sanctions. 2. Subject to the provisions of paragraph 1 of this Article, the freedom of collective bargaining shall be fully respected. Article 3 The elements to be taken into consideration in determining the level of minimum wages shall, so far as possible and appropriate in relation to national practice and conditions, include-- (a) 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;

4 4 (b) economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment. Article 4 1. Each Member which ratifies this Convention shall create and/or maintain machinery adapted to national conditions and requirements whereby minimum wages for groups of wage earners covered in pursuance of Article 1 thereof can be fixed and adjusted from time to time. The ILO Recommendation concerning Minimum Wage Fixing, 1970 (No. 135) I. Purpose of Minimum Wage Fixing 1. 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. 2. The fundamental purpose of minimum wage fixing should be to give wage earners necessary social protection as regards minimum permissible levels of wages. II. Criteria for Determining the Level of Minimum Wages 3. In determining the level of minimum wages, account should be taken of the following criteria, amongst others: (a) the needs of workers and their families; (b) the general level of wages in the country; (c) the cost of living and changes therein; (d) social security benefits; (e) the relative living standards of other social groups; (f) economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment. III. Coverage of the Minimum Wage Fixing System 4. The number and groups of wage earners who are not covered in pursuance of Article 1 of the Minimum Wage Fixing Convention, 1970, should be kept to a minimum. 5. (1) The system of minimum wages may be applied to the wage earners covered in pursuance of Article 1 of the Convention either by fixing a single minimum wage of general application or by fixing a series of minimum wages applying to particular groups of workers. (2) A system based on a single minimum wage--

5 5 (a) need not be incompatible with the fixing of different rates of minimum wages in different regions or zones with a view to allowing for differences in costs of living; (b) should not impair the effects of decisions, past or future, fixing minimum wages higher than the general minimum for particular groups of workers. Expert opinion From the description of the draft amendment I take it that the draft concerns only relations between the employee and the (one) employer. The draft incites the employee to accept, during idle-time, other tasks than his ordinary in his employers business. First of all I would like to comment on the application of the ILO Convention on Forced Labour and Compulsory Work (No. 29) on the draft amendment in question. The definition of forced labour and compulsory work is to be found in artic1e 2 p.1 in the convention. The Committee of Experts has commented on the definition as follows: To fall within the definition of forced or compulsory labour in the 1930 Convention, work or service must be exacted under the menace of penalty. It was made clear during the consideration of the draft instrument by the Conference that the penalty here in question need not be in the form of penal sanctions, but might take the form also of a loss of rights or privileges. ( Abolition of forced labour, General Survey by the Committee of Experts on the Application of Conventions and Recommendations, International Labour Conference, 65th Session, 1979, page 9, under point 21) The Lithuanian draft amendment puts economical pressure on the employee. If the employee does not accept transference to another job during idle-time he or she will be paid only one third of minimum wage. However he or she is free to give notice and leave his or her employment. Since the employee has this way out I would argue that the draft amendment is not in conflict with the ILO Convention on Forced Labour and Compulsory Work. When it comes to the ILO Convention on Minimum Wages No. 131, I consider the draft amendment is in conflict with this Convention. The Convention does not allow abatement of the minimum wage in an idle-time situation. According to article 1 in the Convention No. 131 member of the ILO, which ratifies the Convention, undertakes to establish a system of minimum wages, which covers all groups of wage earners whose terms of

6 6 employment are such that coverage would be appropriate. Furthermore, the ILO Recommendation No.135, III p. 4 states that the number and groups of wage earners who are not covered in pursuance of Article 1 of the Minimum Wage Fixing Convention, 1970, should be kept to a minimum. If the Lithuanian government make this draft amendment come into force it will cover all groups of employees. Under certain conditions anyone who has an employment can have his or her wage reduced to only one third of the minimum wage. Hence, I do agree with the National Trade Union that the draft amendment is in conflict with the ILO Convention on Minimum Wages No National Trade Union Contact UNIFICATION J.Jasinskio 9, 2600 VILNIUS Laimonas Pivoras Legal Responsible tel Nerijus Kasiliauskas BLLP Legal assistant by UNIFICATION tel fax EXPERT Anett Olofsson LO-Rättsskydd AB Legal counsel tel tel

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