BEERG Newsletter - EU: Employment Law update

At the recent European Trade Union Confederation (ETUC) conference in Berlin, union leaders called on EU Member States to implement the recently adopted Minimum Wage Directive as quickly as possible and not to wait out the two-year period allowed for transposition. 

The 2022 Directive mandates all EU Member States introduce processes to ensure wage rates remain “adequate”. Denmark has gone to the Court of Justice of the European Union (CJEU) to challenge the legality of the Directive. It argues that the Directive is illegal as the EU Treaty specifically rules out the EU having anything to do with pay.  

More importantly for trade unions, the Directive also obliges Member States where collective bargaining coverage falls below 80% to take steps to bring it up to at least that level. The unions see this as something that will help them rebuild membership that has been on a steady downward drift for many years. However, we believe that they are likely to be disappointed as workers cannot be forced to join unions and younger generations show little interest in wanting to do so. 

“We now have the minimum wage directive that guarantees that member states do that everywhere,” Esther Lynch ETUC general secretary said, “not just in some places, but everywhere”.

She was joined by Nicolas Schmit, European Commissioner for Jobs and Social Rights, who encouraged member states to implement the directive as national law prior to the two-year deadline, citing the needs of low-wage workers as the reason for his urgency.

“Some countries […] discourage collective bargaining,” Schmit said, “and this is not part of the social contract of Europe”. The Directive was adopted in October 2022, meaning it must become national law by October 2024.

Last week, the European Parliament finally agreed its position on the proposed Corporate Due Diligence Directive, despite a last-minute attempt by the right-of-centre European Peoples Party to rewrite part of it. Talks between the Parliament, the Council of Ministers, and the Commission were due to begin this week to see if an agreement on a common text can be found. Once adopted, the Directive will oblige businesses to take steps to ensure compliance with global human rights, labour standards, and environmental regulations throughout their supply chains. 

While welcoming the Parliament’s vote, the ETUC has called for:

• Proper involvement of trade unions and workers’ representatives throughout the whole due diligence process in the companies and their whole value chain.
• Effective access to justice for victims and trade unions.
• Dissuasive sanctions and remedies for companies which violate human rights, workers’ rights, or their obligations to protect the environment, and strong liability rules.

Meanwhile, according to EurActiv the Council of Ministers continues to struggle to find an agreed position on the proposed Directive on the Employment Status of Platform Workers. Some countries, such as Spain and the Netherlands, are pushing a strong “presumption of employment” article which would see platform workers automatically regarded as employees unless the platforms can prove otherwise. 

Other countries, such as France and many in central and eastern Europe, wanted lighter provisions in this regard. It was anticipated that Spain, which holds the EU Presidency from July 1, would have used its position to push hard for its position, as well as pushing the proposed revision of the European Works Council Directive. However, Prime Minister Sanchez has called a snap general election for late July which polls suggest the opposition, conservative PP will win, thus changing the dynamics in the Council, tipping the balance in favour of those wanting a lighter law. 

Once the Council agrees its position it will have to be negotiated with the Parliament and the Commission. The Parliament has already adopted a hardline position on the presumption of employment which means the negotiations will not be easy.