The Wage Councils is constituted in accordance with Labour Institutions Act 2007.
The Act establishes two wages councils: a general wages council and an agricultural wages council. The Cabinet Secretary is mandated to establish any other sectoral wages council on a need basis subject to the consultation of the National Labour Board.
A wages council shall consist of the following members appointed by the Cabinet Secretary–
- a chairperson;
- not more than three members nominated by the Board representing trade unions;
- not more than three members nominated by the Board representing employers; and
- not more than three independent members.
The members of the wages council are appointed for a period of three years and are entrusted with the following functions:
- to investigate remuneration and conditions of employment in any sector;
- invite and consider written and oral representation, in prescribed manner, from interested parties; and
- make recommendations to the Cabinet Secretary on minimum wage remuneration and conditions of employment.
Additionally, the Agricultural wages council may recommend to the Cabinet Secretary, minimum remuneration and conditions of employment of employees employed in the agricultural sector or any sector in which no other wages order is applicable.
On the recommendation of these Councils, the Cabinet Secretary may issue Wages Order setting minimum rates of remuneration (usually published on May 1st Each year). Minimum wages vary by occupational sectors, skill levels and geographical areas.
A wages order:
- sets the minimum rates of remuneration;
- specify the types and manner of deductions as well as the maximum amount/percentage of deductions;
- maximum amount deducted from pay in respect of rations supplied by the employer;
- regulate task based and piece work;
- regulate outwork, casual work and contract work; and
- other related terms on remuneration.
While determining the minimum wage, the Wage Council should take into account the following factors:
- 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;
- economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment and the need to encourage investment;
- the ability of employers to carry on their business successfully;
- the operation of small, medium and micro enterprises;
- the alleviation of poverty;
- the minimum subsistence level; and
- the likely impact of any proposed conditions.
An employer who fails to pay statutory minimum wage or provide a worker with conditions of employment as provided under the Wages Order commits an offence.