EU: Governments behind in transposing Minimum Wage Directive

The deadline for the EU’s Adequate Minimum Wage Directive is nearing, yet many Member States have not implemented it into law. Unions are pushing the idea that the way to hit the 80% collective bargaining coverage marker set out in Article 4 of the Directive is a return to sectoral collective bargaining. Neither employers nor national governments agree.

The bottom line: The union’s sectoral collective bargaining goal will not happen. Employers who are not already involved in sectoral bargaining will not agree to it, and governments are not going to impose it. 

In a market economy, it is just not possible to force people to negotiate with one another if one party does not want to negotiate. Unless you have the leverage. For trade unions, that leverage is the ability to call and run a collective strike. Without that ability, collective bargaining is little more than collective discussions. Sectoral bargaining faces challenges, as demonstrated by Australia’s complex experience with similar legislation.

ADDITIONAL INFORMATION:

European Trade Union Confederation report on which countries have/have not transposed the law

This article offers an interesting insight into some of the complexities involved in trying to put sectoral bargaining systems in place.