PROPOSAL FOR A DIRECTIVE ON MINIMUM WAGES: EMPLOYERS CONCERNED

Following the presentation of the European Commission’s proposal for an EU Directive on adequate minimum wages in October 2020, the European Parliament and the European Council have been debating the Commission’s proposal for the last 12 months. The two institutions have just reached agreement on their respective positions to go to the trialogue negotiations.  

On 24 November, the European Council completed the first step towards a final adoption of a joint text, which is expected to be adopted on next Employment, Social Policy, Health and Consume Affairs Council (EPSCO), to take place of 6 December 2021. Despite confirming its support for an EU Directive, the EFCI welcomes the much more flexible approach that the Council text intends to bring to the final proposal. In particular, the text turns the 70% of collective agreement coverage into an indicator – and not a mandatory objective – thus respecting Social Partner’s autonomy and their right to collective bargaining. Additionally, as opposed to the Parliament’s text, the Council has also maintained the references to productivity levels and developments as elements to be taken into account for the calculation of adequate wages, a key element to guarantee the viability of any wage variations and protect employment.

The European Parliament adopted its position in the plenary meeting of 25 November. Regrettably, against the recommendations of European employer organisations and several national and European unions organisations, the Parliament amended the text originally proposed by the Commission by enhancing many of the provisions for which many national and European social partners have advised withdrawing or changing their mandatory nature. In particular, the adopted text (i) increases the mandatory collective agreement coverage from 70% to 80%, (ii) includes the obligation to implement an action plan for those member states that don’t reach the collective bargaining coverage goals and (iii) excludes the considerations on labour productivity developments from the adequacy criteria. In EFCI’s view, the enforcement of mandatory collective agreement coverage percentages is incompatible with the workers’ and employers’ freedom of association and imposes the intervention of public administrations in the collective bargaining process. In parallel, the withdrawal of the considerations on labour productivity developments can endanger the adequate setting of minimum wages, which could potentially lead to an unsustainable loss of competitivity for companies and consequently to employment loss.

The EFCI has been closely following the evolution of the discussions. EFCI’s position on the text was summarised in  two statements: EFCI´s views on the Commission’s proposal (November 2020) and the Multi-sectoral joint statement on minimum wages (May 2021). Additionally, during this time the EFCI has been in touch both with MEPs of several major political groups and the representations of the EU Member States to voice the views and concerns of the sector on the proposal and ongoing negotiations.