Negotiators from the European Parliament and the EU Council agreed, during the night of 6-7 June, on the terms of the Adequate Minimum Wages directive after final concessions from both sides. Negotiations had started in January (see EUROPE 12869/23).
“We have a good agreement, workers are the winners”, said the Dutch co-rapporteur, Agnes Jongerius (S&D), on Tuesday (she was working with the MEP Denis Radtke (EPP, Germany)), who claims that the directive will ensure a decent standard of living for workers who are particularly affected today by “inflation and the rising cost of living”.
She welcomed the fact that the new agreement encourages the setting of adequate minimum wages through collective bargaining, with a threshold of 80% coverage of workers through collective bargaining now, compared to 70% in the original text (Article 4). National action plans will also need to be put in place to further “increase this rate”, said the MEP.
But this will not change the social model of the Member States. “National laws are respected”, she added, and the new directive does not oblige Member States to introduce a minimum income where this issue is exclusively reserved for the social partners and collective bargaining, in this case Sweden, Austria, Cyprus, Denmark, Finland and Italy. There is also no harmonisation on this minimum wage level.
Significant progress on the legal minimum wage
But the most significant advances concern the criteria for determining the level of the legal minimum wage set by the state.
Member States will have to assess whether their existing statutory minimum wage is sufficient to ensure a decent standard of living, “taking into account their own socio-economic conditions, purchasing power and based on a basket of goods and services at real prices as well as national levels of productivity and long-term development”.
Another important fact is that both parties agreed to apply reference values to determine this legal minimum income level. Member States will be able to apply reference values, such as 60% of the gross median wage or 50% of the gross average wage (written into the text). Another very important point is that these values will accompany the already existing national reference indicators.
More ‘trivial’, but nonetheless symbolic: the two sides also agreed on the title of the directive, which will finally remain the same as the Commission’s original text and will concern adequate minimum wages, whereas the EU Council had tried to replace the directive with a simple framework on minimum wages.
Final concessions
The last negotiation meeting dealt with other very specific issues, including Article 6 on minimum wage variations and reductions.
The European Parliament had fought against these possibilities for Member States to exclude workers from the minimum wage rules and demanded their abolition or strong safeguards.
Article 6 was eventually retained, but the requirement of a “legitimate objective” for maintaining variations and deductions was added.
A non-regression clause is also added for those Member States that do not have variations or deductions and cannot be obliged to introduce them. An additional paragraph had to be added to preserve the right of these countries not to introduce variations and reductions.
A recital also states that deductions from the minimum wage for housing or equipment necessary for the performance of work present a risk of disproportionality.
“We had to go towards the EU Council” on this article, says a parliamentary source, who is nevertheless satisfied that a recital recalls with stronger language that these variations and reductions risk undermining the adequacy of minimum wages.
Another provision of concern for the Parliament was potential attempts to intimidate trade unions and hinder entry into collective bargaining. The agreement states that the work of trade unions to enter into collective bargaining must be protected, particularly against interference from outside agents. The right information must also be given to workers and unions so that they can best negotiate these minimum wage levels.
The Parliament is said to have wanted more conditions, but was satisfied with these advances. Furthermore, the European Parliament also won on Article 3 and the definition of collective bargaining which takes place between an employer, a group of employers or one or more employers’ organisations on the one hand and “trade unions” instead of workers’ organisations on the other. This definition is close to the spirit of the International Labour Organization conventions.
Article 11 provides for the right to remedy, reparation and protection.
Positive reactions
The agreement was welcomed by the S&D, Greens/EFA and Renew Europe groups in the Parliament, but also by the European trade unions, who expressed their satisfaction. For the European Trade Union Confederation (ETUC), “Europe has moved closer to a fairer minimum wage”. The agreement “could be a game-changer for millions of working people struggling with the cost-of-living crisis”, says the ETUC.
“If adopted and properly implemented, this directive will not only make statutory minimum wages fairer in those countries which use them, but will also protect and promote collective bargaining as the best solution for fair pay across Europe”.
The Ministers for Employment and Social Affairs will now be called upon, on 16 June, to validate this agreement as the French Presidency of the EU Council hopes. This green light should in principle be given, although Sweden and Denmark have signalled a possible negative vote, which is also not a surprise for the Parliament’s negotiators, as both countries have already rejected the EU Council’s general approach.
The national ambassadors of the Member States will be informed on 8 June about the contours of the agreement. (Original version in French by Solenn Paulic)