Mozambique: Minimum Wage Negotiations Suspended Sine Die

Maputo — The Labour Consultative Commission (CTT), the consultative forum between the Mozambican government, the trade unions and the employers' associations has suspended negotiations on increasing the statutory minimum wage.

The negotiations begun on 18 March, but now the Covid-19 pandemic has been used as the excuse to stop the talks - which means that there will be no rise in the minimum wage until further notice. In previous years, an increase in the minimum wage was usually announced in late April and was always back dated to 1 April.

At a Thursday press conference in Maputo, Labour Minister Margarida Talapa announced that the members of the CCT, meeting on Monday, "assessed the situation and agreed to suspend immediately the negotiations on the national minimum wages for this year".

She said the decision arose because of the state of emergency, declared in reaction to the pandemic, which took effect on 1 April, and which has been seriously affecting the Mozambican economy.

She claimed that the decision to suspend talks (and hence not to increase wages this month) was taken to guarantee the maintenance of jobs.

Talapa said it will be up to the CCT to decide when to resume the negotiations. The CCT "will have the responsibility, as soon as the situation normalises, to assess the conditions for the resumption of the wage negotiations for the present year".

The trade union have accepted the decision. The general secretary of the main union federation, the OTM, Alexandre Munguambe told the press conference there was no alternative to suspending the negotiations until "normalisation" at some unknown date in the future.

He said that most companies are currently closed, and it made no sense continuing to negotiate, while many employers are absent because of the restrictions imposed by the state of emergency.

"Right now, the companies are not working, and most workers are also at home", said Munguambe. "We shall wait until the situation improves".

The chairperson of the Confederation of Mozambican Business Associations (CTA), Agostinho Vuma, said the impact of Covid-19 on businesses has been enormous. A preliminary assessment suggests that the losses incurred by Mozambican businesses may have reached 375 million US dollars.

Vuma said the sectors most affected are tourism, transport and agriculture, and the situation reduces the capacity of companies to honour their wage commitments to their workers.

Talapa said the Labour Ministry has received notifications that the current situation has affected 300 companies, employing 10,395 workers. Of these companies, 252 have suspended the contracts with their workers, while the rest have made redundancies.

Other companies - Talapa did not say how many - have opted to suspend their activities altogether, or to send their workers home on "collective holidays". Still others have followed the government suggestion that their staff should work in rotation.

Talapa said that even the companies which have suspended work contracts have agreed to pay the current wages, albeit in instalments.

"It's not worth advancing with a wage increase, when we know that the conditions do not exist to comply with it", she said.

The call for workers to forego their annual wage rise would be more compelling if Mozambican politicians showed any sign of willingness to make comparable sacrifices. Instead, in early April the country's parliament, the Assembly of the Republic, voted itself an enormous increase in its budget. The Assembly's operational budget (i.e. excluding capital expenditure) for 2020 almost doubled, to reach 2.8 billion meticais (about 42 million US dollars, at current exchange rates).

Commentators found particularly outrageous the money spent on the "reintegation" into society of parliamentary deputies. This is money given to deputies of the outgoing legislature - even if they were re-elected in last October's general election. This handout is around four million meticais per deputy.

So regardless of Covid-19, the deputies will receive their reintegration allowance, but ordinary workers are to be deprived, at least temporarily, of the annual pay rise they were expecting.

The deputies have now voted to give three days of their wages to the anti-Covid campaign - which is ten per cent of their monthly wage. This pales into insignificance compared with the voluntary 50 per cent cut in his wages taken by the mayor of the central city of Chimoio, Joao Ferreira.

There is no national minimum wage. Instead the wages are negotiated sector by sector. The OTM calculated last year that to provide a basic basket of goods and services for an average family, a minimum wage of 19,600 meticais (297 US dollars) would have been needed. This year, the cost for the same basket, according to the OTM would be 22,700 meticais.

The monthly minimum wages agreed in 2019 came nowhere near 19,600 meticais. They ranged from 4,266 meticais for fishery workers on Lake Cahora Bassa in Tete province, to 12,760 meticais for workers in banking, insurance and other financial services. The minimum wage for public sector workers was just 4,467 meticais a month.

The CCT only discusses the minimum wage. Anything above the minimum is a matter for collective bargaining between unions and employers in each company or workplace. More enlightened employers tend to pay their workers more than the statutory minimum, and there is nothing to prevent companies paying workers more this year, regardless of the CCT negotiations.

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