"The 2022 Directive on Adequate Minimum Wages in the EU marks a milestone on the journey towards a more social Europe. With its two key objectives of ensuring adequate minimum wages and strengthening collective bargaining, the Directive aims to realize the broader policy goals of reducing in-work poverty and wage inequality. In order to achieve these objectives, the Directive sets out procedures and reference values concerning minimum wage setting and collective bargaining. Of particular importance are the reference values for the assessment of the adequacy of statutory minimum wages set out in Article 5.4 of the Directive – this is the so-called ‘double decency threshold' of 60% of the national gross median wage and 50% of the national gross average wage.

Furthermore, the Directive contains several important provisions which aim to support (sectoral) collective bargaining. First, Article 3.3 emphasises that collective bargaining is the prerogative of trade unions. This is important to prevent a competitive race to the bottom through agreements concluded by non-union organisations which may undermine adequate minimum wage protection. Second, Article 4 contains various provisions calling on the Member States to promote the bargaining parties' capacity to engage in collective bargaining at (cross-) sectoral level, as well as to protect the right to collective bargaining. This explicitly includes protection against discrimination against union representatives who (seek to) exercise this right. Finally, Article 9 underlines that, in accordance with EU Public Procurement Directives 2014/23/EU, 2014/24/EU and 2014/25/EU, Member States shall take appropriate measures to ensure that, in the awarding and performance of public procurement or concession contracts, economic operators and their subcontractors comply with the applicable obligations regarding wages, the right to organise and collective bargaining on wage-setting.

Article 4.2 of the Directive, furthermore, requires each Member State in which collective bargaining coverage is below 80% to establish an action plan to promote collective bargaining. The aim of this provision is to create a framework of enabling conditions in these countries with a view to progressively increase bargaining coverage. In its expert group report on transposition of the Minimum Wage Directive, the European Commission clarifies that this threshold ‘imposes an obligation of effort, not of result' and should therefore not be viewed as ‘a mandatory target to be reached'. Thus, even if this provision does not oblige Member States to achieve collective bargaining coverage of 80% in the strict legal sense, it de facto defines an EU-wide standard for collective bargaining coverage that Member States should aim for as a necessary condition of adequate minimum wage protection."

Support: Digital