Published on 29th February 2024
Political debates on wages and living wages have been high on the political agenda against the backdrop of the rising cost of living and high level of inflation. In parallel, several non-governmental organisations have been driving that debate. In February 2024, the International Labour Organisation took the discussion a step forward by convening a so-called “Tripartite Meeting of Experts” to agree on key principles of wage-setting processes as well as set an appropriate definition of a living wage and methodological principles to calculate it.
“Appropriate wages and fair pay are fundamental principles for the HR services industry,” says Denis Pennel, Managing Director of the World Employment Confederation (WEC). “The outcome of the ILO negotiations, including the agreement on the concept of living wages, a proper methodology and the consideration of the economic context and economic factors, establish relevant governance and guidance for wage setting.”
For the private employment services industry, this agreement complements existing international rules on the industry, such as the ILO Convention 181 on private employment agencies and national regulation on pay and working conditions for agency workers. Based on a WEC survey, 85% of responding countries have some form of regulation in place that ensures equal treatment/equal pay for agency workers at national level. Agency work is used in almost all economic sectors and wages for its workers correspond to the occupations and tasks they perform.
The World Employment Confederation participated in the “Tripartite Meeting of Experts” as an observer, alongside representatives of employers, workers and governments. The meeting adopted a definition of living wages, which incorporates the needs of workers and their families alongside an assessment of the economic factors, including economic development, levels of productivity and employment, together with the sustainability of enterprises. This dual approach ensures that wage-setting processes are balanced towards both workers and business, relying on data and statistics for an evidence-based approach tailored to national circumstances.
Experts also agreed that wage-setting processes need to be carried out in a national framework. This is vital to ensure that local realities related to the cost of living and economic prospects are fully integrated. The ILO tripartite constituents also established the need for proper governance on wage-setting.
Recommendations from the ILO are not legally binding instruments but the World Employment Confederation encourages all international and national stakeholders involved in wage-setting processes to follow this guidance and apply the principles and methodologies agreed by the tripartite constituents.
