Wednesday, July 6

Agreement to set an “adequate minimum wage” in the EU and strengthen collective bargaining

The Spanish PP and Vox voted against in the European Parliament. But this morning the negotiators of the European Parliament and the Council – the governments – have reached an agreement on the directive on adequate minimum wages, whose origin is in the proposal of the European Commission of October 2020. Of course, “the directive it does not require Member States to introduce minimum wages by law, nor does it establish a common minimum wage level across the EU. The draft directive on the minimum wage aims to establish minimum requirements to guarantee a minimum income that gives workers and their families a decent standard of living. This can be achieved by setting a minimum wage by law or by allowing workers to negotiate their wages with employers in collective bargaining systems.

Brussels notes the increase in “poor workers”, asks for “adequate minimum wages” and calls for “promoting collective bargaining”

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The new law “will promote the adequacy of minimum wages by law and help achieve decent working and living conditions for European workers,” says the Council of the EU: “The directive establishes procedures for the adequacy of minimum wages by law, promotes collective bargaining for wage setting and improves effective access to minimum wage protection for those workers who are entitled to a minimum wage under national law, either at a minimum wage set by law or by collective agreements”.

The directive calls on Member States with statutory minimum wages to “establish a procedural framework to establish and update these minimum wages in accordance with a set of clear criteria.” Thus, the Council and the European Parliament agreed that the updates of the minimum wages by law “will be carried out at least every two years (or at most every four years for those countries that use an automatic indexing mechanism). The social agents must participate in the procedures for fixing and updating the minimum wages by law”.

“Since collective bargaining on wage setting is an important tool to ensure that workers can benefit from adequate minimum wages, the directive aims to extend the coverage of workers through collective bargaining,” says the Council of the EU. : “For this reason, the co-legislators agreed that countries should promote the strengthening of the capacity of the social partners to participate in collective bargaining, including the protection of workers’ representatives”.

The provisional agreement between the Council and the European Parliament provides that when the collective bargaining coverage rate falls below the 80% threshold, Member States must establish an action plan to promote collective bargaining. The action plan must establish a clear timetable and concrete measures to progressively increase the coverage rate of collective bargaining.

“Adequate minimum wages are important to strengthen social equity and underpin a sustainable and inclusive economic recovery. Better working and living conditions also benefit companies, as well as society and the economy in general by boosting productivity and competitiveness”, states the European Commission, which states: “Member States with statutory minimum wages must establish a strong governance framework for setting and updating minimum wages: clear criteria for setting minimum wages (including: purchasing power taking into account cost of living, level, distribution and growth rate of wages and national productivity); the use of indicative reference values ​​to guide the assessment of the adequacy of minimum wages, with the directive giving indications as to possible values ​​that could be used; regular and timely updates of minimum wages; establish advisory bodies, in which the social partners may participate; guarantee that the variations and deductions of the legal minimum wages respect the principles of non-discrimination and proportionality, including the search for a legitimate purpose; and effectively involve the social partners in setting and updating the minimum wage”.

In the Commission’s proposal, for example, reference was made to “adequacy indicators commonly used internationally, such as the Kaitz index, an economic indicator that represents the ratio between the legal minimum wage and the average wage. Or the decent standard of living defined by the Council of Europe, which relates the minimum net salary to the average net salary”.

“The protection of the minimum wage exists in all the Member States of the EU, either through legal minimum wages and collective agreements, or exclusively through collective agreements”, explains the Community Executive: “Ensuring that workers earn adequate wages it is essential to improve their living and working conditions and to build just and resilient economies and societies. However, some workers are affected by low adequacy and/or gaps in coverage of minimum wage protection. The new directive aims to address this by establishing an EU framework to improve the adequate protection of the minimum wage. This will be done in full respect of national traditions and competences, as well as the autonomy of the social partners. It does not require Member States to introduce legal minimum wages, nor does it establish a common minimum wage level across the EU.

Commission President Ursula von der Leyen said: “The new minimum wage rules will protect the dignity of work and ensure that work pays. All this will be done in full respect of national traditions and the autonomy of the social partners.” And the Commissioner for Employment and Social Rights, Nicolas Schmit, who has participated in the triologs, the tripartite negotiations, explained: “At a time when many households in the EU are worried about making ends meet, it is essential that all Member States have adequate minimum wage protection. The framework that has been agreed by the European Parliament and the Council will help ensure that minimum wage earners can afford a decent life. This is a good day for a strong social Europe that protects”.

The political agreement reached by the European Parliament and the Council is now subject to formal approval by the co-legislators. Once published in the Official Journal, the directive will enter into force 20 days after its publication and Member States must transpose the new elements of the directive into national law within two years.

The Spanish PP, when the time came to vote in plenary session on the mandate to negotiate the content of that report with the Council and the Commission, decided to vote against it, together with the extreme right of Vox.

The European Parliament, for its part, approved on November 25 the opening of negotiations on a directive that guarantees all workers in the EU a fair and adequate minimum wage.

MEPs confirmed the negotiating mandate agreed in the parliamentary committee on Employment and Social Affairs, with 443 votes in favor, 192 against and 58 abstentions. Talks with the Council can start now, while the Member States have just adopted their negotiating position this Monday in Brussels.

The European Commissioner for Employment, Nicolas Schmit, welcomed the vote in the European Parliament, which included the No of the Spanish PP.