On 28 October, the European Commission put forward a proposal for a directive “on adequate minimum wages in the European Union”, which seeks to implement principle no. 6 of the European Pillar of Social Rights (see Social pillar). This principle stipulates that “Adequate minimum wages shall be ensured, in a way that provide for the satisfaction of the needs of the worker and his / her family (…). In-work poverty shall be prevented.”

• How can the EU take action on the issue of minimum wages, when the Treaty on the Functioning of the European Union (TFEU) does not confer any powers on it to legislate in the areas of either pay or collective bargaining? The Commission is positioning its initiative under the auspices of Article 153, paragraph 1, point b) of the TFEU, which provides that the Union shall support and supplement the action of the Member States in the field of working conditions and may adopt “by means of directives, minimum requirements” (Article 153, paragraph 2). Its proposal therefore seeks to establish minimum requirements to ensure both “that minimum wages are set at adequate level” and that the largest possible number of workers will benefit as a result.

• So, what is an adequate level? The proposal does not set a level. Instead, it states that minimum wages are “considered adequate if they are fair in relation to the wage distribution in the country and if they provide a decent standard of living” (recital 21). It suggests their adequacy should be assessed using the indicators “commonly used at international level, such as 60% of the gross median wage and 50% of the gross average wage”.

• How can this be done? The Commission is acting on three levels:
  1/ Strengthening collective bargaining. Without interfering in domestic social dialogue practices, the Commission requires that States where the number of workers covered by a collective agreement (“collective bargaining coverage”) is not at least 70%, should establish “a framework for collective bargaining”, either by law or by tripartite agreement. This framework should then be supplemented by “an action plan to promote collective bargaining”. This objective truly represents a revolution: up to now, the Commission had never viewed the erosion of collective bargaining coverage as a problem. However, it now recognises the virtues of collective bargaining: as the level of collective bargaining coverage increases, the proportion of workers earning low wages falls, wage inequality levels decline and minimum wage levels rise. The 70% target is a very ambitious one: just 10 States have met it so far and 10 others are below a level of 30%, meaning that the East European countries in question and Greece will have to make a major effort, and will have to build an effective industrial relations system.
  2/ Improving the systems that regulate statutory minimum wages. The Commission proposes that the 21 Member States that have introduced a statutory minimum wage should review the mechanisms they use to set and update these. These mechanisms must be based on “criteria set to promote adequacy with the aim to achieve decent working and living conditions, social cohesion and upward convergence”. The Commission is calling for social partners to actually become involved in setting and updating statutory minimum wages.
  3/ Covering all workers. The directive’s scope of application covers not only workers who have an employment contract (employees) but also all those who have an “employment relationship” within the meaning of case law established by the Court of Justice: “workers in non-standard forms of employment, such as domestic workers, on-demand workers, intermittent workers, voucher based-workers, bogus self-employed, platform workers, trainees and apprentices” – in short, everyone whose work is directed by an employer. This categorisation has another important consequence: these “workers” will be able to enter into collective agreements without running the risk that these “understandings” will be deemed unlawful under competition law.

Despite its shortcomings, as emphasised by the social partners (see below), this project marks a genuine turning point in European social policy, in light of its determination to battle against the phenomenon of in-work poverty and to assign a key role to collective bargaining, with a view to combating inequality.

The Commission’s 2021 work programme : On 19 October, the European Commission put forward its 2021 work programme. This is “designed to make Europe healthier, fairer and more prosperous, while accelerating its long-term transformation into a greener economy, fit for the digital age.” We note a legislative proposal intended “to improve the working conditions of platform workers” (see Platform work) and “an ambitious action plan to implement fully the European Pillar of Social Rights, making sure that no one is left behind in Europe's recovery.” A Council recommendation will ensure “access to basic services like health and education for all children”. A legislative initiative to combat gender-based violence has also been announced. Lastly, a communication on “a new strategic framework on health and safety at work” is provided for.
> Find out more: press release issued by the Commission and Annex to the work programme.

• Youth Guarantee : The Council has definitively adopted a recommendation to reinforce the Youth Guarantee (see Youth Guarantee). Member States must undertake to provide young people with an offer of employment, continued education, an apprenticeship or a traineeship within a period of four months after becoming unemployed or leaving formal education. At the same time, the recommendation raises the age limit for benefiting from the guarantee from 25 to 29. It provides for better inclusion of persons from vulnerable groups, such as NEETs (see NEET), young women and people with disabilities (see Council press release).

Reactions to the proposed EU directive on adequate minimum wages : The employers’ organisation BusinessEurope has strongly rejected the Commission’s proposal for a binding legal instrument, calling it “a legal monster” that comes at a time when “companies are fighting for their survival and to save jobs threatened by the COVID crisis” (see press release). This position is shared by employers in the chemical industry, whose view is that a text like this “poses both a direct threat to social partners’ autonomy and collective bargaining negotiations, with the Union overstepping its mandate” (see ECEG press release). Their position coincides with that of employers in the metalworking industry (see CEEMET press release). For its part, the European Trade Union Confederation (ETUC) has expressed satisfaction, though it has also highlighted a number of shortcomings. In particular, it wants the minimum wage level (60% of the median wage) to be a mandatory requirement, and would like to see companies that don’t pay the minimum wage barred from public procurement contracts and denied eligibility for European funds. (see ETUC press release).

• Chemical industry: On 14 October, the European Commission put forward a “Chemicals Strategy for Sustainability”  (see press release and Questions and Answers press release). This is the “first step towards a ‘zero pollution’ ambition for a toxic-free environment” announced in the European Green Deal. The European social partners in the chemical sector reacted to this initiative by issuing a joint statement of their own, counterbalancing the Commission’s objectives: “zero pollution would mean zero production and, in turn, zero employment and zero value creation.” They call for support for research and development, and a greater commitment on the EU’s part to boosting skills among the sector’s workforce and to provide better training opportunities for graduates and apprentices in this industry.
  > Find out more: press release issued by IndustriAll Europe and the ECEG.


• Private security and cash management: After their joint statement issued in November 2019, the European social partners in the private security and cash management sector are now sounding the alarm at the decline in the use of cash for making payments, which is endangering the entire cash cycle sector and the jobs it provides. Over and above the economic arguments, they emphasise that “cash remains an essential payment system for (…) the economically disadvantaged, elderly, children and foreigners.” On 28 October, they adopted an action plan calling in particular for the European Union to pass “legislation that ensures the continued availability of cash to everyone and that enforces the legal tender status of cash, making it illegal to refuse payment in cash.”
  > Find out more: joint press release issued by UNI Europa and CoESS.

Use of videoconferencing : The European trade-union federations have revised their recommendations for members of European Works Councils (EWCs), European Company Works Councils (SE-WCs) and Special Negotiation Bodies (SNBs), to take account of the Covid-19 crisis, which will prevent face-to-face meetings being held “for a considerable time to come”. The federations insist that physical meetings must become the norm again once this is possible. In the meantime, they offer a set of instructions to ensure that the use of videoconferencing in the current exceptional circumstances proceeds smoothly, and a model agreement for overseeing this practice, to be signed with management.

Cross-industry agreement on teleworking : On 20 October, the employers’ organisation UEL and the two trade union confederations LCGB and OGBL signed a cross-industry agreement on teleworking. The agreement governs both regular teleworking – which is already regulated by a previous agreement signed in 2006 – and occasional teleworking, where this is undertaken “to cope with unforeseen events or where teleworking represents less than 10% on average of the teleworker’s normal annual working hours.” The text establishes the principle of voluntary agreement, based on a contract signed between employer and employee. In particular, this must specify the periods during which the employee must remain contactable; any remuneration payable as benefits in kind; and any fixed monthly connection and call charges payable. The agreement will soon be extended to all employers, so that it can quickly enter into force.
> See also the joint press release issued by the signatories.

Forest industries : On 1 October, the employers in the Finnish forest industries announced their intention to withdraw from national collective bargaining and to transfer future negotiations on wages and working conditions to the company level. This is a historic turning point for one of Finland’s most important industrial sectors (140,000 employees). The aim is to negotiate more flexible arrangements in terms of wages and working hours. Isabelle Barthès, Deputy General Secretary of IndustriAll Europe, says: “This is a setback for sectoral collective agreements. If one brick is removed from a solid social model that functions well, others might follow.” (see press release issued by IndustriAll Europe and Article in Trade Union News).

European Works Councils and teleworking : Eight months after the start of the Covid-19 pandemic and at a time when a second wave of the virus is sweeping across Europe, there is no general consensus among businesses regarding the role played by European Works Councils in overseeing teleworking. Some multinational companies are clearly committed to the goal of establishing a European framework. This is the case with the Italian bank UniCredit (see below) and also the French reinsurance group Scor. In September, the group’s European Companies Works Council suggested launching negotiations with a view to reaching a European agreement on remote working. “It’s about making use of all feedback received (both positive and negative) on the lockdown period”, explains Christophe Lefebvre, Secretary of the European Works Council, “and improving the mechanisms contained in the 2002 European social partners agreement, in the countries that have made little progress in implementing it”. At SAP, the company’s European Works Council and management are conducting a survey of what is legal and of the practices in use in every European country in various domains, such as working from home, teleworking, part-time working, etc. with a view to producing recommendations for use in all European countries. Some EWCs plan to set up their own working groups to deal with this subject. Other groups are adopting a much more decentralised approach. No discussions are planned on the European Works Council of the pharmaceuticals group Sanofi. The same goes for LafargeHolcim where “management has devolved discussions to the level of each country”, according to Hélène Debegnac, Secretary of the European Works Council. The subject has not been discussed on the Société générale EWC. At Verizon, the European Works Council’s request to negotiate a European agreement was met with an outright refusal. At Total, there are no plans to discuss a European agreement, but the group is encouraging each country’s HR to telework two days per week. On 22 October, the group signed a methodology agreement in France, allowing the introduction of pilot schemes to experiment with new forms of teleworking, with the aim of improving the existing agreement. At Schneider Electric, management has conducted a global survey on teleworking, with the aim of allowing local managements to negotiate and cut the amount of office space they occupy (target: 8 offices for every 10 employees). A new global teleworking policy is under preparation at L'Oréal, based on the principle of no more than two days’ teleworking per week. Training courses on how to manage teleworking, especially in e-learning format, will soon be available to all staff, as will sessions specifically tailored to managers. All staff will also be given a set of equipment to make home-working more efficient.

Incomplete information on a reorganisation : On 8 October, the bottling group Coca-Cola European Partners held an extraordinary meeting of its European Works Council via videoconferencing, to announce a reorganisation that will affect 5% of the group’s total workforce in Europe, i.e. an estimated 914 job losses, according to a breakdown provided to the European Works Council. Almost 40% of the job losses will be in Germany. Surprisingly, management explained that it would not be consulting the European Works Council on the restructuring as a whole, but only on the transnational projects involved in this reorganisation; in the end, these will affect 200 people. As far as the other employees are concerned, management’s view is that the job losses will result from decisions taken at national level, and that consequently, they lie outside the remit of the European Works Council.

Difficult negotiations during the Covid-19 period : On 23 October, the European Federation of Public Service Unions (EPSU) denounced manoeuvring by the management of Orpea, Europe’s largest multinational company in the care-for-the-elderly sector, which has scheduled a face-to-face meeting of the special negotiating body, with workers’ representatives from various countries, in an isolated location in Alsace, at a time when France is dealing with the second wave of the Covid-19 pandemic. The group is therefore endangering the health of its workers by refusing to organise a meeting via videoconferencing, says the federation, condemning what it sees as an attempt to sabotage the negotiation process (see EPSU press release).

Joint declaration on remote working : On 21 October, the management of the Italian bank UniCredit (see ‘A question for…’ opposite) and the group’s European Works Council issued a joint declaration on remote working, which “may be a solution for achieving work-life balance, and improving the quality of life of individuals and communities, from a viewpoint of social and environmental responsibility”. The declaration includes a right to switch off, so that employees can keep to their standard working hours. The move to remote working is based on voluntary agreement, and the exact terms are tailored to the various settings in which the business operates: at head office and in central offices, remote working may account for “on average 40% of the working hours, broken down on a weekly or monthly basis”, e.g. 2 days per week. Within the bank branch network, remote working may account for 20% of an employee’s working hours, on a weekly or monthly basis (e.g. 1 day per week). Luciano Malvolti, Secretary of the UniCredit European Works Council, emphasises that this joint declaration “is the outcome of a proactive initiative taken by the select committee of the UniCredit European Works Council (the UEW) which, from the very outset of the pandemic crisis, was aware that the new ways of working would also be based on remote collaboration”. He continues: “The added value represented by the collective approach at European Works Council level is clear, and close cooperation with local trade union representatives will enable the principles and minimum standards agreed in the joint declaration to be implemented by way of binding collective agreements.”
> Find out more: This agreement is part of a long tradition of social dialogue within UniCredit, which has seen the adoption of several joint declarations (Equal Opportunities and Non-Discrimination, Responsible sales, Work-life balance and the signing of a Global Framework Agreement in 2019.

Demonstrating the value of a global framework agreement : In a press release, the IndustriAll Global Union federation emphasises the role played by the global framework agreement signed with the Spanish group Inditex, in resolving breaches of the agreement applicable at a Romanian supplier (Tanex) to the group, which owns Zara (see press release).