Czech Business Today

During the March plenary, the Employers’ Group adopted a counter-opinion (contrary to the Committee’s opinion) on the minimum wage, noting that the area of ​​minimum wages must remain the exclusive competence of individual Member States. They also point out that the October 2020 proposal for a European directive on the minimum wage lacks a proper assessment of the impact of the ongoing economic crisis linked to the COVID-19 pandemic and may lead to a further widening of disparities and inequalities in Europe.

Employers do not dispute that greater wage convergence, including minimum wages, can contribute to better social and economic cohesion in Europe and close the gender pay gap or improve living and working conditions while ensuring a level playing field in the single market. However, they contradict the way in which the European Commission wants to achieve wage convergence.

Like some Member States, employers’ representatives consider that a directive is not appropriate to achieve this goal. Alternative instruments are, for example, Council recommendations.

• The legal basis of the proposal is also ambiguous. The EU may adopt legal instruments concerning working conditions on the basis of Articles 151 and 153 of the Treaty on the Functioning of the EU. The EU Treaties stipulate that Article 153 does not apply to “remuneration”. We already have EU case law and existing directives that consider the issue of remuneration to be a key working condition.
• The employers also consider that the setting of minimum wages falls within the national competence and is addressed in accordance with the specificities of each national system. In this respect, employers’ representatives disagree with the views of other members of the Committee, who consider that setting minimum wages is a matter for the EU. On the other hand, the Nordic trade unions are in favour of employers, who oppose legal interference in autonomous collective bargaining between the social partners. In its memorandum explaining the proposed measures, the Commission stated that Member States with a high coverage of collective bargaining perform better than others in terms of higher wages and fewer low-paid workers.
• In this respect, the EU Minimum Wage Directive would disrupt collective bargaining systems, especially in countries where minimum wage limits are set by collective agreements.
• European minimum wage policy could have a potentially negative impact on employment, especially for young people and low-skilled workers, and could exacerbate non-compliance, which could also force many low-paid workers to work illegally. Undeclared work leads to unfair competition and worsens social and tax systems and does not respect workers’ rights, including the right to decent working conditions and a minimum wage.

The current economic and social situation is very serious, and it is therefore necessary to properly assess its impact and its contribution to the economic recovery before introducing any new legislation, in order to avoid the opposite effect. The Commission should therefore reconsider and take a more balanced and cautious approach and strive for real EU convergence through a non-binding instrument, while fully respecting the autonomy of the social partners and the different models of industrial relations, as called for by the employers’ group.

Alena Mastantuono, EESC Member, Group I – Employers