Industrial relations

EU level: Latest developments in working life Q1 2020

Social partners’ reactions to the Commission's proposals for a strong social Europe, including a minimum fair wage initiative, are the main topics of interest in this article. This EU update reports on the latest developments in working life in the EU in the first quarter of 2020. Topics related to the COVID-19 pandemic are presented in a separate article.

Commission’s proposals for a strong social Europe

On 14 January, the European Commission presented a Communication on building a strong social Europe for just transitions. The first proposals relate to adapting the EU economy and working life to address climate change and environmental degradation. The starting premise of the proposals is that social justice is the cornerstone of the European social market economy and represents the core values of the EU. Therefore, the goal is to build a resilient society with the highest standards of well-being in the world. According to the Commission, actions under the European Pillar of Social Rights (EPSR) aim to meet the current challenges and take advantage of emerging opportunities.

The reactions of the social partners were positive but noticeably divergent. The European Trade Union Confederation (ETUC) indicated it would insist on a comprehensive and ambitious action plan to implement the EPSR and ensure socially just transitions for people. ETUC Confederal Secretary Liina Carr focused on proposals for platform workers, indicating that the proposals are positive but need to be improved on to ensure that all people with non-standard contracts have access to both social protection and collective bargaining too. [1]

BusinessEurope Director Markus Beyrer stated that the European Semester process is a key tool to coordinate necessary reforms at national level too, to ensure that good jobs are provided for citizens. [2] The European Centre of Employers and Enterprises providing Public Services and Services of general interest (CEEP) General Secretary Valeria Ronzitti declared there is a need for a clear social roadmap, as employers cannot be left to anticipate and manage transitions on their own. [3]

Social partners differ on fair minimum wage initiative

On 14 January, the European Commission initiated the first phase of consultation with social partners on possible action to address the challenges related to fair minimum wages. [4] The consultation followed an earlier announcement by European Commission President Ursula von der Leyen that she intended to look at ways to develop the EU minimum wage framework. The Commission took the view that such an initiative at EU level could be appropriate, because it would:

  • increase the purchasing power of low-wage people in all Member States and thus help to stimulate internal demand, while maintaining employment and competitiveness
  • help Member States to achieve upward convergence in terms of working conditions
  • give political impetus to improvement by supporting ongoing efforts at national level
  • contribute to ensuring fair minimum wages for workers in the EU

EU-level employer organisations voiced their scepticism about the initiative when it was announced. There was wide agreement among employer organisations that the issue of wages is not within the competence of the EU and the TFEU does not provide a legal basis for setting the minimum wage at EU level.

BusinessEurope expressed the view that the determination of appropriate wages should take place at national level, given that income is derived from various sources, such as social security, and is determined on the basis of country-specific elements, such as taxes and non-wage labour costs. On the other hand, the organisation sees added value in the possible strengthening of the involvement of national social partners in discussions regarding the minimum wage as part of the European Semester. [5]

In CEEP's opinion, continuous monitoring of wage developments in the context of the European Semester and continued implementation of the EPSR and Sustainable Development Goals are more important. CEEP noted that benchmarking differences between Member States is also possible.

SMEunited stated that defining the adequate level of minimum wage is a complex issue that cannot be restricted to a percentage of the national median wage or average wage in a given country. According to the organisation, the principle of subsidiarity as well as the autonomy of social partners must be respected when the Commission is addressing this issue. [6]

The ETUC was more positive in its response to the Commission's initiative. [7] It noted, however, that the Commission’s diagnosis is only partially accurate, as statutory minimum wages are set at rates that are too low to be fair. ETUC also stated that the second leading cause of unfairness in the labour market – lack of adequate support for collective bargaining by Member States – has largely failed to be identified. According to the ETUC, fair minimum wages will only be created in labour markets with vibrant collective bargaining that raises the whole wage structure in Member States, thus also lifting the minimum wage. The ETUC, therefore, stressed the necessity for effective measures to promote workers’ rights to organise and bargain collectively to be included in the initiative. Notably, this topic caused a heated dispute inside the ETUC with a group of Nordic trade unions. In an unprecedented action, the group stated in a separate letter to the Commission that they did not agree with the opinion of the ETUC.

The second phase of consultation is due to start in May.

Mobility Package meets resistance

The situation around new EU rules for the road haulage sector is becoming complicated. Although on 19 December 2019, the Council and the European Parliament reached an agreement on the content of the package, it still needs to be formally approved by the Member States and the European Parliament.

It is not yet known when this will happen because European Commission Vice-President Valdis Dombrovskis warned that the current shape of the package contains elements that are not in line with the objectives of the Green Deal. He noted that these measures were not part of the original Commission proposal and were not subject to the impact assessment. The two elements of concern are the compulsory return of the vehicle to the Member State of establishment every eight weeks and the restrictions imposed on combined transport operations. It is possible that the Commission, after assessing the impact of these two aspects on the climate, the environment and the functioning of the single market, will exercise its right to submit a targeted legislative proposal on the content of the package.

On 18 February, transport ministers from nine Member States traditionally opposing the package (Bulgaria, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and Romania) met with Executive Vice-President Frans Timmermans responsible for the European Green Deal and Commissioner for Transport Adina Vălean warning that the new rules will have negative effects on the climate and insisting that the impact assessment should be ready before the legislation enters into force. [8]

The situation has been further complicated due to the COVID-19 pandemic. In light of this, on 27 March, transport ministers from eight Member States urged the Croatian Presidency to postpone the consideration and adoption of the Mobility Package until the COVID-19 pandemic has ended and its impact on the transport sector has been assessed. [9] It was originally assumed that work would be finalised in mid-2020.

Outlook

In view of the unprecedented situation associated with the COVID-19 pandemic, a reorientation of EU priorities in relation to working life towards first and foremost saving jobs and ensuring safety in the workplace can be expected.


Footnotes

  1. ^ ETUC, ETUC on Commission’s ‘Strong Social Europe’ communication , 14 January.
  2. ^ BusinessEurope, EU can only deliver for people if the economy works well , 14 January.
  3. ^ CEEP, Transitions and social Europe: You will need SGIs employers to succeed , 14 January.
  4. ^ Based on Article 154 of the Treaty on the Functioning of the European Union (TFEU).
  5. ^ BusinessEurope, Response to first phase social partner consultation on a possible action addressing the challenges related to fair minimum wages , undated.
  6. ^ SMEunited, SMEunited reply to the first phase consultation of Social Partners under Art 154 TFEU on a possible action addressing the challenges related to fair minimum wages , 3 March.
  7. ^ ETUC, ETUC reply to the First Phase Consultation of Social Partners under Article 154 TFEU on a possible action addressing the challenges related to fair minimum wages , 26 February.
  8. ^ Euractiv, Nine EU countries voice opposition to EU ‘Mobility Package’ , 19 February.
  9. ^ Delfi.en, Lithuania and some other EU countries ask for Mobility Package postponement , 20 March.


 

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