31 March 2024
By Roger Kennedy
roger@theCork.ie
In a significant stride towards protecting workers from the plight of low wages, the EU has laid down a directive aiming for a collective bargaining agreement coverage of at least 80% across its Member States. This initiative underscores the European Union’s commitment to enhancing labour conditions. However, recent findings by Eurofound, the European Foundation for the Improvement of Living and Working Conditions, suggest that achieving this numerical target is just the beginning.
Policymakers and social partners are encouraged to delve deeper into the essence of collective agreements, noting that not all of them govern pay rates. Furthermore, there’s Ma concern that in some instances, the agreed-upon pay rates might not have been updated for an extended period.
Pioneering Research on Minimum Wages in Collective Agreements
For the first time, Eurofound embarked on a project aimed at establishing an EU-wide database that catalogues collective agreements, focusing particularly on those affecting low-paid workers. This initiative sought to provide a clearer picture of the minimum wage levels negotiated through these agreements. A total of 24 sectors, recognised for their employment significance and the substantial presence of low-wage workers, were examined. The research drew from an expansive pool of over 3,200 documents, encompassing 692 thoroughly analysed collective agreements that, collectively, impact at least 43 million workers across the EU.
The Realities of Negotiated Pay Rates
The study reveals that 85% of the scrutinised agreements specify pay rates, with a significant number of them ensuring that workers receive wages surpassing the national minimum. However, disparities exist, with certain Member States presenting agreements where the negotiated pay falls below the national minimum wage, attributable to various legislative and contractual nuances.
Challenges of Outdated Pay Rates
An in-depth analysis highlights a prevalent issue across 15 Member States, where agreements sometimes set pay rates below the legal minimum wage. The duration for which these rates remain unadjusted varies significantly, pointing to the need for timely renegotiation to ensure fairness and relevance in wage agreements.
Implications and the Path Forward
This research underscores the complexity of collective bargaining and the challenges in ensuring that agreements not only exist but are also current and inclusive. While many agreements successfully augment the national minimum wage, gaps and delays in updates pose risks to their efficacy. The phenomenon of agreements failing to regulate or adequately update pay rates suggests missed opportunities for sector- or company-specific negotiations on wages.
As the political focus shifts towards raising minimum wages, it’s crucial to monitor the effects on collective bargaining, especially for low-paid workers. Eurofound’s pioneering data collection effort sets the stage for ongoing observation and support for the enhancement of wage and working conditions through collective bargaining.
More to read: find out more about minimum wage