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- Introduction
On July 12, the European Parliament Employment and Social Affairs Committee voted on the provisional agreement resulting from interinstitutional negotiations[1] for a directive on minimum wages.
The agreement was approved by the committee, with 34 votes in favour, 8 against and 2 abstentions. Among MEPs voting against was Mr. Hermann Tertsch, a member of the Spanish delegation in the ECR group who was replacing on the occasion Mrs. Margarita de la Pisa.
Their reasons for a negative vote were based on a matter of principle. In fact, the Vice-President of the ECR party, Mr. Jorge Buxadé, had previously conveyed a written question on the matter to the Employment Commissioner, Mr. Nicolas Schmit, a Luxembourgish socialist.
Mr. Buxadé reminded the Commissioner that Article 153.5 of the Treaty on the Functioning of the European Union (TFUE) expressly reserves competence on wages in favour of the Member States. On the other hand, the VOX politician observed that the directive contained important provisions in matter of collective action, which according to Article 153 TFUE requires approval by unanimity in the Council of the European Union.
Mr. Schmit responded to both questions on September 9, as analysed hereafter. The reader can judge whether the title of this article is perhaps exaggerated or else rather precise.
- Abuse of law in order to side-line unanimity at the Council
The so-called ordinary legislative procedure (commonly abbreviated as “COD” due to its former name of “co-decision”) is currently predominant in European Union acts of a binding nature, and requires the conformity of two of its three institutions, namely, the Council of the European Union and the European Parliament.
The European Parliament approves most acts by simple majority; that is, they are passed if more favourable votes than negative ones are awarded to a proposal. In the present case, this is what occurred in the plenary session on 14 September.
But a different situation happens in the Council of the European Union. Such body includes the representatives of all Member States, acting on an equal footing. And regarding minimum wages there were at least two national governments, those of Sweden and Denmark, who had expressed strong reserves and even opposition to the Union regulating on this matter. On top of its lack of competence, they quite sensibly held that such regulation would erode the role and leadership of the social partners when negotiating wages at national, sectoral or corporate level.
In order to ascertain where reason stands, let us refer to the wording of article 153.2 TFUE, as claimed by Mr. Buxadé in his address to the European Commission:
“In the fields referred to in paragraph 1(c), (d), (f) and (g), the Council shall act unanimously, in accordance with a special legislative procedure, after consulting the European Parliament and the said Committees [the Economic and Social Committee and the Committee of the Regions].”
And what exactly is the field referred to in paragraph 1(f), for which unanimity in the Council is required, together with consulting the European Parliament, the Economic and Social Committee and the Committee of Regions? None other than “representation and collective defence of the interests of workers and employers”, precisely what MEP Jorge Buxadé reminded Commissioner Schmit.
The Commission proposal included nineteen Artícles, out of which twelve (i.e., numbers 1, 2, 3, 4, 5, 7, 8, 9, 10, 11, 13 and 16) regulate the representation and collective defence of the interests of workers. However, in his attempt to escape the application of Article 153.2 TFUE, the socialist Commissioner writes that “the provisions on collective bargaining contained in the text are ancillary to the material scope of application of the directive”.
As per this trick he assures himself a more favourable playing field -through majority consensus between socialists and Christian-democrats- than what the Rule of Law actually provides, that is, unanimity at the Council of the European Union, where of course the Commission’s influence would fall short.
Commissioner Schmit continues to develop his peculiar argumentation in front of Mr. Buxadé criticism: representation and collective defence of the interests of workers “are only included as a means to achieve the objective of the directive”.
But that clearly deviates from the TFUE provision, which does not at all qualify the regulation of representation and collective defence of the interests of workers, but rather requires a procedure based on Council unanimity when they are affected.
Furthermore, Mr. Schmit’s argument is expressly disproved by the very terms of Article 4 of his own proposal, which promotes collective action not just as a means of minimum wage determination.
- Manipulation of European jurisprudence
In alignment with his party’s defence of national competences against illegal invasion of same from Brussels, VOX member Mr. Buxadé reminded Mr. Schmit that Article 153.5 TFUE expressly excludes attribution to the Union in matters of pay.
Readers of The Conservative Online are used to watching the European Commission accuse the governments of Poland and Hungary, close to the ECR party positions as well as VOX, of an allegedly continuous violation of the Rule of Law. On the contrary, it seems quite clear that, in this case, it is rather the institutions of the Union that are failing to comply with such principle, by acting where they have no competence.
Here, Schmit’s reply transforms the Treaty to make it say what it does not. According to the Luxembourgish socialist, the Union may not “directly” regulate the level of pay, but could indeed “adopt acts with effects on pay”.
Therefore, what was defended to evade the Council unanimity because of the material object of regulation is now portrayed as having a sort of indirect nature, which is affected but not through a “direct” treatment.
Again, such nuances might exist in the imagination of Commissioner Schmit, albeit nowhere in the Treaty, which excludes pay regulation, not just “direct” pay regulation.
Such little magical word, of a sweeping effect in the mouth of Schmit, he brings up together with the supplementary authority of none other than the Court of Justice of the European Union.
In its 2008 “Impact” judgment, the Luxembourg court decided on a preliminary ruling as requested by the labour jurisdiction in the Republic of Ireland, more particularly on a case where a union of public employees (Impact) opposed several bodies in the Irish administration regarding working conditions and pensions.
In its ruling, the European court confirmed that the Union primary law “excludes determination of salary levels through harmonisatión” (paragraph 123), which is exactly what Schmit’s proposal aims to perform – when it indicates that minimum wages should not amount to less than 50% of average or 60% of global median salaries, according to recital 21 of the directive.
Such jurisprudence never talks about “direct” determination; said adjective is only invented by the socialist Commissioner in his response. Interestingly, a harmonisation or determination via a non-binding provision, such as that included in recital 21, qualifies as “indirect” determination or harmonisation.
But let us further analyse “Impact” in its own terms, for another proof that neither the European jurisprudence nor TFUE allow for Schmit’s indirect determination or harmonisation:
“Standardisation of all or part of the constituent elements of wages and/or their level in the Member States or the introduction of a Community minimum wage would entail direct interference by Community law in the determination of remuneration within the Community” (paragraph 124).
Thus, the Court of Justice of the European Union expressly outlaws any standardisation, either global or partial, of pay level in the Member States, whether such standardisation be direct or indirect.
We acknowledge, together with the magistrates in “Impact”, that “not any matter having some bearing on remuneration” (paragraph 125) is automatically excluded as a Union competence. But establishing a law on minimum wages amounts to more than “having some bearing” on remuneration.
Finally, “Impact” was decided in a context of discrimination among employees (paragraph 126), which has nothing to do with the determination of minimum wages.
We can therefore conclude, with the authors of “Impact”, that “the determination of the level of the various constituent elements of an employee’s remuneration is beyond the competence of the Community legislator and remains indisputably within the competence of the competent authorities of the various Member States“ (paragraph 129).
During a September 20 parliamentary delegation to the European Commission’s agency EU-OSHA based in Bilbao (Spain), the author of this article witnessed how socialist MEP Estrella Durà boasted that the minimum wages directive was an example of how political may supersede treaty provisions. A curious view of the Rule of Law, indeed, and certainly not one supported by the ECR party principles.
[1] https://www.europarl.europa.eu/meetdocs/2014_2019/plmrep/COMMITTEES/EMPL/AG/2022/07-11/1258585EN.pdf