The Directive on Adequate Minimum Wages proposed by the European Commission raises concerns for Ceemet with regard to (lack of) the legal basis and its (unintentional) consequences.

A bad start for the Commission proposal for a Directive

On 28 October 2020, the European Commission presented a proposal for a Directive on Adequate Minimum Wages which, according to the Commission, aims:

  1. to ensure that workers across the EU are protected by adequate minimum wages, allowing for a decent living;
  2. to strengthen collective bargaining as the main instrument to ensure fair wages and working conditions.

A few days after the European Commission proposed the Directive, the European Council Legal Service started looking into the proposed legal basis.

No legal basis

It is surprising that the Commission eventually proposed a Directive in an area that deals with collective bargaining and wage setting. Article 153(5) of the Treaty on the Functioning of the European Union (TFEU) explicitly excludes ‘pay’ from an EU level competence. It is a pure national competence.

The Commission argues that it stays within the limits of Article 153(5) as the proposal “does not contain measures directly affecting the level of pay’. Ceemet disagrees with this statement as the proposal obliges Member States to take pre-defined criteria into account, which will inevitably result in a set level of minimum wage. Any measures related to pay should be taken at national level, in full respect of national regulations and practices. Hence employers and various national trade unions expressed their opposition to the introduction of an EU Directive in this area during both stages of the consultation.

Collateral damage of the Commission proposal

The consequences of the proposed Directive would be detrimental for social partner autonomy and collective bargaining.

For example, the new catalogue of criteria in the setting of statutory minimum wages would impact national legislation, but also the collective bargaining on sector level. The ECJ who acquired jurisdiction over national collective agreements would have to impose any criteria laid down in the Directive.

The proposed Directive will thus weaken the role of social partners as well as well functioning collective bargaining systems.

One option to avoid a drama: withdraw the proposal

Ceemet undoubtedly agrees to the overall objective of the Directive according to which “all employees are entitled to decent working and living conditions”. And it surely is an unintended consequence of the Commission’s proposal to weaken social partner autonomy and to undermine collective bargaining.

Opposing the proposal is about condemning the EU deeply intervening in something it said it wouldn’t and it shouldn’t. It is about defending the basic functioning principles of the European Union that have been agreed upon in European Treaties.

The Commission proposal cannot deliver what it promised without undermining existing and successful collective bargaining systems. Therefore, as one of the most active sectors in terms of collective bargaining in Europe, Ceemet strongly advocates for the sole option to avoid a drama, and that is to withdraw the proposal.

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