Key Strategic Employment Issues to Consider for 2022 - #7
Draft EU Directive on Adequate Minimum Wages looms closer.
In the EU debates on a Directive on adequate minimum wages, the European Parliament has agreed its negotiating position on the directive in November 2021, including a mandate to enter trialogue negotiations and the EU Employment and Social Policy Council (of Ministers).
The Council adopted its own position on 6th December as a provisional agreement on the Directive (general approach) and will now start political negotiations with the representatives of the European Parliament. Both the Council and the European Parliament will need to agree on a final text during the French Presidency over the first half of 2022.
The Council recognises that fair wages that provide for a decent standard of living are one of the principles of the European Pillar of Social Rights. To improve working and living conditions, this draft law establishes a framework to promote adequate levels of statutory minimum wages, to promote collective bargaining on wage setting and to improve the effective access to minimum wage protection of those workers who are entitled to a minimum wage.
Significantly for Ireland, the draft law contains a commitment on the promotion of collective bargaining on wage setting. Supporters of the measure argue that countries with a high collective bargaining coverage tend to have a smaller share of low-wage workers and higher minimum wages than those with low collective bargaining coverage. The draft law requires countries to promote strengthening the capacity of social partners to engage in collective bargaining where collective bargaining coverage is below 70%. They will also be required to establish an action plan to promote collective bargaining.
The objective of increasing the collective bargaining coverage is with a view to enhancing wage setting provided by collective agreements and thus promote adequacy of minimum wages. It remains to be confirmed that the 70% of collective bargaining coverage is not an objective, but rather a threshold triggering the obligation to provide for a framework of enabling conditions and an action plan by social partners to promote collective bargaining.
If you would like to talk to us about any of these issues, or about engaging your people through the period ahead, please get in touch with me at email@example.com or any one of our Partners.
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Disclaimer: The information in this article is for practical guidance only and does not constitute legal or case specific advice. The answers to specific situations will vary depending on the circumstances of each case. This is not a substitute for specific professional advice relevant to individual circumstances facing your business.