This has become one of the most important and hotly debated legislative proposals during this mandate for the European Parliament.

Adequate wages are an essential component of the EU model of a social market economy.

However, as underlined by the World Employment Confederation, the question is if a Directive is the most efficient instrument to cater for the variety between forms of work and labour market models in the EU.

Swedish and Danish labour-market models, for example, are characterised by high collective-bargaining coverage (above 70 per cent), high wages and high rates of membership of employer organisations and trade unions. In this context, - it has been noted – that this Directive could risk undermining two well-functioning systems, while providing little or no added value for Swedish and Danish workers.

The Confederation of Danish Employers considers that wage levels are an exclusively national responsibility as the result of collective bargaining agreements reached by the unions and employers’ associations and one of the core elements of the Danish model.

A working paper published by Eurofound shows that in Denmark, Norway, Austria, and Sweden, around 10% or fewer of those on the minimum wage have difficulty making ends meet, while in countries like Greece and Bulgaria – which do have statutory minimum wages – the corresponding figure is more than 50%.

For all these reasons, according to the Confederation of Danish Employers, the solution is not to implement a centralised and rigid statutory minimum wage across the Member States. 

The proposal to include a ‘social partners option’ in the directive, could allow member states not to transpose it if they fulfil these criteria:

• they do not have a statutory minimum wage or system for declaring collective agreements generally binding;
• minimum-wage protection is provided exclusively by collective bargaining between autonomous social partners;
• the option of not transposing the directive is demanded jointly by the social partners in both the private and public sectors.

One of the promoters of this social proposal, Mr. Johan Danielsson, believes that these criteria target Sweden and Denmark and avoid spilling over into those member states where trade unions see a positive potential in the directive. The solution also “empowers Swedish and Danish trade unions to demand transposition, should their national labour-market model fail over time to fulfil the goal of ensuring decent wages”.

This proposal - tabled in the European Parliament - could also “have the potential to protect well-functioning collective bargaining models and unblock the negotiations, as well as strengthening the fight against social dumping”, he added.