Trade unions in Ireland and Brussels have welcomed a decision by the European Court of Justice (ECJ) to reject a challenge by Denmark to the validity of the EU directive on the Adequate Minimum Wage.
In its decision on Tuesday, the Court found that the EU had exceeded its powers in two specific areas of the directive but upheld the validity of a majority of its provisions.
Professor of European integration and Employment Relations at UCD, Roland Erne, characterised the judgment as “Social Europe 2, Liberal Europe 1”, saying that the directive’s key provisions on issues such as the “reference values” for local minimum wages, obligations on governments to promote collective bargaining and trade union rights had all been left in tact.
“Ironically, the EU court would not have endorsed the most important articles of the EU directive, had national and European employers association not lobbied the European Union after the financial crisis of 2008 to impose wage cuts in the EU’s new economic governance prescription during the Troika years,” he said.
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“By doing that, the employers turned wage policy effectively into an area of EU policymaking or ‘EU competence’.
Denmark, with the support of Sweden, had challenged the validity of the entire directive, claiming that the EU was not permitted to legislate on wages.
In January, an Advocate General recommended that the court annul the entire directive and while the ECJ follows such recommendations in a majority of decisions, in this instance it instead upheld the validity of the bulk of the directive, which is intended to ensure that adequate minimum wage rates prevail across member states.
In order to achieve this, governments are required to promote collective bargaining in those states where fewer than 80 per cent of workers are covered by such agreements.
In Ireland, the Government delivered the action plan it was required to produce under the terms of the directive last week when it committed to exploring a range of measures including the provision of workplace access to unions, protections to their representatives and supports for training of both employer and union negotiators.
It said it would work with all stakeholders to achieve consensus on the key issues involved while respecting the voluntarist nature of industrial relations engagement in Ireland under which employers are not legally obliged to engage with trade unions for the purposes of collective bargaining.
Welcoming the decision the Irish Congress of Trade Unions said the legality of the directive had been “put beyond doubt,” and its general secretary, Owen Reidy said it was “crucial now that we get down to work in the new year to make the action plan and each of its twenty two actions a reality”.
Speaking at the Siptu biennial conference in Galway, that union’s deputy general secretary, Ethel Buckley, said the decision meant “the fight for fair wages can continue on firm legal ground”.
Ibec, meanwhile, said it noted that the decision and the fact the Court had recognised the EU had overstepped national competences with respect to provisions listing the criteria that must be taken into account by member states when setting and updating national minimum wages as well as the rule preventing those wages from being decreased when they are automatically indexed.
“As Ibec had communicated during the transposition process for this Directive, Ireland already has a robust statutory minimum wage framework in place, with Ireland’s current minimum wage among the highest in the EU. As such, it was not necessary to substantially alter our national minimum wage legislation on transposition of this Directive. Nevertheless, Ibec welcomes the confirmation from the CJEU that the criteria to be taken into account by Member States when setting and updating national minimum wages remains a matter of national competence.”
