EurWORK European Observatory of Working Life

Pay

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Pay, the core of the wage–work bargain, is regarded with some ambivalence in the EU context. There is highly developed regulation of some aspects of pay. However, this sits alongside a belated attempt to exclude general EU intervention on matters of pay.

There are a substantial number of interventions by the EU into matters concerned with pay. The best known and most highly developed is the explicit commitment to equal pay for women and men in Article 157 TFEU. The clear commitment by the EU to enforceable regulation as regards the principle of equal pay between women and men was perceived as critical to the common market objective of fair competition, ensuring that employers in some Member States did not benefit from a competitive advantage due to higher regulatory wage standards (in this case, prohibiting discrimination in pay on grounds of sex) in others. For the same reason, the EC Treaty also included a provision that, ‘Member States shall endeavour to maintain the existing equivalence between paid holiday schemes’ (Article 158 TFEU).

Similarly, Council Directive 75/117/EEC of 10 February 1975 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for women and men was based on the Treaty Article allowing for directives to harmonise provisions that ‘directly affect the establishment or functioning of the common market’ (Article 94 EC, now 115 TFEU). Council Directive 80/987 of 20 October 1980, on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer, as amended by Directive 87/164, provided in Article 3(1) that, ‘Member States shall take the measures necessary to ensure that institutions guarantee… payment of employees’ outstanding claims resulting from contract of employment or employment relationships and relating to pay….’

There was no other basis in the original EC Treaty allowing explicitly for EU intervention on matters concerned with pay. But Article 31 of the Charter of Fundamental Rights of the European Union guarantees fair and just working conditions insofar as they can affect human dignity. Aspects of employment, such as wages, are crucial to the concept of human dignity. The reference to paid leave as a fundamental right in Article 31 of the EU Charter opens the possibility of the Charter making fair pay a fundamental right in the EU but this has yet to be determined in an authoritative manner.

See also: coordination of collective bargaining; cross-border trade union cooperation; Community Charter of the Fundamental Social Rights of Workers; equal pay; European Social Charter; labour costs.


Please note: the European industrial relations dictionary is updated annually. If errors are brought to our attention, we will try to correct them.
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