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Minimum Wage-Fixing Machinery Convention, 1928 (No. 26) - Bulgaria (Ratification: 1935)

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Replies received to the issues raised in a direct request which do not give rise to further comments (CEACR) - adopted 2019, published 109th ILC session (2021)

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.

Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

Articles 1 and 3 of the Convention. Nature, form and method of operation of minimum wage fixing machinery. The Committee recalls its previous comment in which it referred to the role of the National Council for Tripartite Cooperation (NCTC) in the determination of the national minimum wage and the efforts to put in place a mechanism for objectively reviewing changes in national economic conditions and adjusting the minimum wage accordingly. In its last report, the Government does not indicate any progress in the process of revision of the method for fixing the statutory minimum wage which now stands at 270 Bulgaria lev (BGN) (approximately €138) per month. The Government provides, however, extensive information on the system of minimum social security thresholds introduced in 2003, according to which employers are obliged to pay social security contributions for their employees on the basis of a sum which may not be lower than the minimum insurable income determined annually by the State Public Social Security Budget Act. The Government states that the minimum social security threshold, which in 2010 was on average BGN402 (approximately €206) per month, principally serves to improve the financial stability of the public social security institutions by fighting the so-called “black cash” and stopping employers paying contributions on the basis of the national minimum wage rather than the worker’s true pay. The Government further states that the minimum social security thresholds act as sectoral minimum wages for different branches and occupational categories. The Committee understands that in 2012 minimum social security thresholds have been negotiated for 50 of Bulgaria’s 85 employment sectors resulting in an average increase of seven per cent and that if thresholds could not be agreed in the remaining 35 sectors, the average increase would normally be extended to all industries.

In this connection, the Committee notes the comments of the Confederation of Independent Trade Unions (CITUB) according to which the Ordinance on wage determination of 1991 is outdated while the current legislation sets out no clear methodology for establishing minimum wage rates. According to the CITUB, it may be true that the inter-professional national minimum wage is fixed by the Government after consultations with the social partners but it does not result from the implementation of any negotiated, agreed and objective criteria (for instance, inflation, poverty line, average wage, purchasing power). In addition, the CITUB refers to an initiative launched in 2010 for improving the method for fixing the national minimum wage on the basis of social and economic parameters which, however, led to no results thus confirming the need for a very ambitious program for the implementation of the requirements of this Convention. With respect to minimum social security thresholds, the CITUB considers that these negotiated rates play in fact the role of minimum wages only when there is agreement between trade unions and employers in a specific sector but this is far from being a regular process following an established methodology and criteria.

The Committee is fully aware of the Government’s intention to fight against the widespread practice of so-called “envelope wages” by fixing and annually readjusting the amount of minimum insurable earnings by sector. It observes, however, that the system of minimum social security thresholds by its nature, method of operation and objective, is very different from the minimum wage fixing system envisaged by the Convention, namely a process for determining and periodically reviewing, in full consultation with employers’ and workers’ organizations, and taking into account socio-economic indicators, and decent wage levels for low-skilled workers. The Committee understands that the statutory minimum wage is only about half of the monthly amount deemed by the National Statistical Institute as necessary for an individual to survive in normal conditions. It also understands that, according to some estimates, the minimum wage, which is the lowest among EU Member States, is no longer sufficient to maintain a full-time worker above the official poverty line. The Committee accordingly requests the Government to pursue its efforts for reforming, in full consultation with the social partners, the method for establishing and readjusting from time to time the national minimum wage based on objective indicators and benchmarks with a view to ensuring a decent living standard for low-paid workers. The Committee would appreciate receiving up-to-date information on the content and outcome of any tripartite consultations undertaken to this end as well as any comments the Government may wish to make in response to the observations of the CITUB.

Finally, the Committee recalls that, following the recommendations of the Working Party on Policy regarding the Revision of Standards (GB.283/LILS/WP/PRS/1/2, paragraphs 19, 40), the ILO Governing Body has decided that Convention No. 26 is among those instruments which may no longer be fully up to date but remain relevant in certain respects. The Committee therefore invites the Government to consider the possibility of ratifying the Minimum Wage Fixing Convention, 1970 (No. 131) which marks certain advances compared to older instruments on minimum wage fixing, for instance, as regards its broader scope of application, the requirement for a comprehensive minimum wage system, and the enumeration of the criteria for the determination of minimum wage levels. The Committee requests the Government to keep the Office informed of any decision taken or envisaged in this regard.

Direct Request (CEACR) - adopted 2011, published 101st ILC session (2012)

The Committee notes that the Government’s report has not been received. It hopes that a report will be supplied for examination by the Committee at its next session and that it will contain full information on the matters raised in its previous direct request, which reads as follows:

Repetition
Article 3(2)(2) of the Convention. Minimum wage fixing machinery. Tripartite consultations. The Committee notes the Government’s statement that there have been no new developments, in law or practice, regarding the operation of the National Council for Tripartite Cooperation (NCTC) in matters related to the determination of the national minimum wage. The Committee understands, however, that over the past two years the method for fixing the statutory minimum wage has been subject to serious dispute and that the social partners have expressed discontent with the lack of an institutionalized manner for objectively reviewing changes in national economic conditions and adjusting the minimum wage accordingly. It also understands that, in an effort to address the concerns of NCTC members, the Government has committed itself to proposing a draft minimum wage-fixing mechanism which would take into account objective parameters, such as productivity, the average wage, the poverty threshold and the inflation rate. The Committee therefore requests the Government to provide detailed information on the elaboration of a new scheme for calculating minimum pay rates and full particulars on the content of any tripartite consultations undertaken to this end. It also requests the Government to transmit a copy of any new legislative or administrative provisions that may have been adopted in this regard.
Article 5 and Part V of the report form. Practical application. The Committee notes that the minimum wage was last revised in January 2006, by virtue of Decree No. 8 of 20 January 2006, and it is currently fixed at 160 BGN (approximately US$106) per month or 0.95 BGN (approximately US$0.6) per hour. Bearing in mind that, in order to play a meaningful role as a tool of social protection and poverty reduction, the minimum wage should maintain its purchasing power in relation to a basic basket of essential consumer goods, the Committee would be particularly interested in receiving statistical data showing the evolution of the national minimum wage in recent years as compared to the evolution of economic indicators, such as the inflation rate, in the same period.
Moreover, the Committee notes the Government’s reference to the 2003–04 activity reports of the General Labour Inspectorate according to which the employers’ failure to comply with the statutory minimum wage is a frequently reported violation of the labour legislation and is usually encountered in less competitive enterprises or enterprises with financial difficulties. The General Labour Inspectorate also refers to the widespread practice of workers being fraudulently presented in payrolls as if they were paid at the minimum rate (even though in reality they receive much higher wages) so as to minimize the corresponding taxes and social security contributions. The Committee would be grateful if the Government would provide in its next report concrete information on the practical application of the Convention, including, for instance, the number of workers remunerated at the minimum wage rate, labour inspection results showing the number of offences observed concerning the payment of sub-minimum wages and the sanctions imposed, as well as any other measures or initiatives taken or envisaged to ensure the effective enforcement of the minimum wage system.

Direct Request (CEACR) - adopted 2007, published 97th ILC session (2008)

The Committee notes the Government’s report.

Article 3, paragraph 2(2), of the Convention. The Committee notes the Government’s statement that there have been no new developments, in law or practice, regarding the operation of the National Council for Tripartite Cooperation (NCTC) in matters related to the determination of the national minimum wage. The Committee understands, however, that over the past two years the method for fixing the statutory minimum wage has been subject to serious dispute and that the social partners have expressed discontent with the lack of an institutionalized manner for objectively reviewing changes in national economic conditions and adjusting the minimum wage accordingly. It also understands that, in an effort to address the concerns of NCTC members, the Government has committed itself to proposing a draft minimum wage-fixing mechanism which would take into account objective parameters, such as productivity, the average wage, the poverty threshold and the inflation rate. The Committee therefore requests the Government to provide detailed information on the elaboration of a new scheme for calculating minimum pay rates and full particulars on the content of any tripartite consultations undertaken to this end. It also requests the Government to transmit a copy of any new legislative or administrative provisions that may have been adopted in this regard.

Article 5 and Part V of the report form. The Committee notes that the minimum wage was last revised in January 2006, by virtue of Decree No. 8 of 20 January 2006, and it is currently fixed at 160 BGN (approximately US$106) per month or 0.95 BGN (approximately US$0.6) per hour. Bearing in mind that, in order to play a meaningful role as a tool of social protection and poverty reduction, the minimum wage should maintain its purchasing power in relation to a basic basket of essential consumer goods, the Committee would be particularly interested in receiving statistical data showing the evolution of the national minimum wage in recent years as compared to the evolution of economic indicators, such as the inflation rate, in the same period.

Moreover, the Committee notes the Government’s reference to the 2003–04 activity reports of the General Labour Inspectorate according to which the employers’ failure to comply with the statutory minimum wage is a frequently reported violation of the labour legislation and is usually encountered in less competitive enterprises or enterprises with financial difficulties. The General Labour Inspectorate also refers to the widespread practice of workers being fraudulently presented in payrolls as if they were paid at the minimum rate (even though in reality they receive much higher wages) so as to minimize the corresponding taxes and social security contributions. The Committee would be grateful if the Government would provide in its next report concrete information on the practical application of the Convention, including, for instance, the number of workers remunerated at the minimum wage rate, labour inspection results showing the number of offences observed concerning the payment of sub-minimum wages and the sanctions imposed, as well as any other measures or initiatives taken or envisaged to ensure the effective enforcement of the minimum wage system.

Direct Request (CEACR) - adopted 2003, published 92nd ILC session (2004)

The Committee notes the Government’s report.

Article 3, paragraph 2(1) and (2), of the Convention. Further to the explanations provided by the Government in its previous report on the working rules of the National Council for Tripartite Cooperation (NCTC), the Committee notes that the composition and functions of the NCTC have now been codified in sections 3(a) and 3(c) of the Labour Code as last amended by the Act of 2 March 2001 (SG No. 25/2001). The Committee requests the Government to keep it informed of any new developments, in law or practice, regarding the operation of the NCTC, as well as of the councils for tripartite cooperation established at the industry, branch and municipal levels, in respect of the determination of minimum wage rates.

Article 3, paragraph 2(3). The Committee notes that section 12 of the Order on wage determination, referred to in section 4 of the Ordinance No. 129 of 5 July 1991 regarding negotiations on wages, provides that the minimum wage negotiated through collective bargaining or fixed under an individual contract of employment cannot be lower than the national minimum wage decreed by the Council of Ministers, thus giving effect to the principle of the Convention according to which minimum wage rates once fixed have the force of law and may not be subject to abatement.

Article 5 and Part V of the report form. In the absence of reply to its previous request on this point, the Committee is obliged to renew its request for up-to-date and detailed information on the practical application of the Convention. Recalling that no specific data on minimum wage rates in force have been provided since 1992, the Committee asks the Government to communicate with its next report all available information in this respect, including copies of relevant statutory instruments fixing minimum monthly and hourly wage rates, statistics on the number of workers covered by minimum wage provisions, extracts from inspection reports showing the number of infringements and sanctions imposed as well as information on any practical difficulties encountered in the application of the Convention. The Committee would be particularly interested in observing the evolution of minimum wage levels in the last ten years to have a clearer idea as to the method for the adjustment of minimum wages and the maintenance of the purchasing power of such wages in the light of fluctuations of economic indicators such as the inflation rate, labour productivity and consumer prices.

Direct Request (CEACR) - adopted 2001, published 90th ILC session (2002)

Article 3, paragraph 2(1) and (2), of the Convention. The Committee notes with interest the information supplied by the Government on the composition and working rules of the National Council for Tripartite Cooperation (NCTC) as set out in Decree No. 51 of 15 March 1993. It would appreciate receiving a copy of the Council’s quarterly bulletin as well as any other information relating to its functioning in the field of minimum wage fixing.

Article 3, paragraph 2(3). In its previous comments concerning the binding effect of the minimum wage, the Committee requested the Government to indicate the legislative or regulatory provisions which protect the national minimum wage fixed under section 244 of the Labour Code from abatement by individual or collective agreements. In its reply, the Government refers to the Ordinance on negotiation of labour remuneration, section 12 of which provides that the minimum wage negotiated through collective bargaining or fixed under an individual contract of employment cannot be lower than the national minimum wage decreed by the Council of Ministers. The Committee requests the Government to specify the details and transmit a copy of the above Ordinance.

Article 4, paragraph 1. The Committee notes from the Government’s report that the Confederation of Labour Podkrepa has made an observation suggesting that workers’ representatives should be given a legal opportunity to participate in the work of the general labour inspectorate. The Committee also notes the Government’s comment in this respect to the effect that section 402, paragraph 3, of the Labour Code already provides that the rights and powers of the controlling bodies shall be extended to trade union organizations. Noting that Chapter 19, section 1, of the Labour Code refers to state bodies responsible to control observance of labour legislation, and also that under section 399 of the Labour Code the general labour inspectorate is defined as a government agency under the overall authority of the Ministry of Labour and Social Welfare, the Committee would be grateful if the Government would further clarify how the powers attributed to workers’ organizations are exercised in practice, especially in matters related to minimum wages.

Article 5 of the Convention and Part V of the report form. The Committee requests the Government to provide all available information on the practical application of the Convention, including, for instance, the minimum wage rates in force, statistics on the number of workers and occupational categories covered by minimum wage provisions, and reports of inspection services regarding the enforcement of minimum wage rules and regulations.

Direct Request (CEACR) - adopted 1998, published 87th ILC session (1999)

The Committee notes the information provided in the Government's report in reply to its previous request.

Article 3, paragraph 2(1) and (2), of the Convention. The Committee notes the Government's indication that, based on the tripartite principles approved by the Regulations on the Functions of the National Council for Tripartite Cooperation (NCTC), the NCTC is a national body for consultations and cooperation in solving the problems of labour relations and social security, as well as the living standards problems. Government, trade unions' and employers' representatives participate in the NCTC. The Committee requests the Government to provide further information on the composition of the NCTC, together with a copy of the above Regulations.

Article 3, paragraph 2(3). In the absence of reply to its previous request, the Committee requests the Government to indicate the measures taken or contemplated to protect the minimum wage fixed under section 244 of the Labour Code from abatement by individual agreements.

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

Direct Request (CEACR) - adopted 1994, published 81st ILC session (1994)

The Committee notes the Government's report as well as the Labour Code as amended in December 1992 (State Gazette, No. 100, 1992).

Article 3, paragraph 2(1) and (2), of the Convention. The Committee notes that section 244 of the Code provides that the minimum wage for the country should be fixed by decree of the Council of Ministers. It also notes the provisions of section 3 concerning the principle of cooperation and consultation with the representative organizations of employers and workers. The Committee requests the Government to indicate how it is ensured in the process of minimum wage fixation that the employers and workers concerned are consulted and associated on equal footing.

Article 3, paragraph 2(3). (i) The Committee requests the Government to indicate the manner in which the minimum wage fixed under section 244 is protected from abatement by individual agreements. (ii) Noting that section 245(1) guarantees the payment of the minimum wage to the worker who has fulfilled the duties in good faith, the Committee asks the Government to specify who is the guarantor of this payment (the employer, the State or some other bodies?).