Estonia: European Union Affairs Committee approved Estonia’s views on the proposed Minimum Wage Directive

NordenBladet — At its today’s sitting, the European Union Affairs Committee of the Riigikogu (Parliament of Estonia) decided to support the Government’s positions on the European Commission proposal for a directive on adequate minimum wages. The objectives of the proposal are to reduce in-work poverty and to ensure a decent living for workers who are disadvantaged on the labour market.

Deputy Chair of the European Union Affairs Committee Riina Sikkut pointed out that the aim of the proposal was not to establish a uniform minimum wage in the European Union, but to create clearer reporting and monitoring, and a transparent way of setting minimum wages. “This position will enable Estonia to continue with the current system, or to agree upon minimum wage in cooperation of social partners,” Sikkut added.

“However, it is important to recognise that increasing of minimum wage in Estonia could contribute to improving the livelihood of underprivileged people, reducing poverty risk and maybe even reducing gender wage gap.” “Minimum wage should be sufficient to protect a person working full-time from poverty risk.”

Member of the Committee Oudekki Loone said that the proposal was a step in the right direction. She emphasised that, above all, the social partners should agree upon minimum wage. “First, Estonia should support concluding collective agreements, and deal with the issue of minimum wage in this way. In the countries with a high collective bargaining coverage, the percentage of low wage earners is smaller, and the level of minimum wage relative to the median wage is higher,” Loone explained.

“In order to ensure real free movement of labour, and not free movement of wages in the European Union, it is necessary to ensure that workers could stand for their rights and interests in the same way in all countries of Europe. Workers are free when their rights are protected,” Loone said. She added that the importance of collective agreements should be highlighted and concluding of sectoral collective agreements should be promoted at the negotiations.

The proposed directive makes a distinction between countries with statutory minimum wages and countries where minimum wages are based on collective bargaining. The Member States that have statutory minimum wage should in the future take into account the purchasing power of minimum wages and the general level of gross wages. The adequacy of minimum wage should also be assessed, using indicative reference values, like whether the minimum wage is 50% of the average wage or 60% of the median wage. In Estonia, the size of minimum wage is agreed upon by the representative organisations of employers and trade unions, therefore Estonia’s position is that we are among the countries where minimum wage is set by collective bargaining.

The European Union Affairs Committee decided to support the positions of the Government on the basis of the opinion of the Social Affairs Committee. The Committee supported the principle that each worker should be ensured an adequate minimum salary, and the Directive must not violate the autonomy of social partners or the freedom of Member States to set minimum wages.

The European Union Affairs Committee discussed this topic also at its sitting on Friday, when the representatives of the European Commission Representation in Estonia, Estonian Trade Union Confederation, the Estonian Employers’ Confederation and the Ministry of Social Affairs introduced the proposal and their positions.