Portuguese employer groups reject EU involvement in setting minimum pay

Most of Portugal’s labour and employer representatives have today rejected the idea of the European Commission being involved in setting the minimum salary, arguing that this should be the sole responsibility of each European Union member state.

That was the tenor of the response from three of the top four employer confederations with a seat in the CGTP- the largest trade union federation- to the European Commission’s announcement on the 14th January that it was launching a phase of consultations with social partners on ensuring that all workers in the EU are paid fairly.

“This initiative is open to manifest criticism and thus strong opposition,” António Saraiva, the president of CIP, Portugal’s leading business confederation, told Lusa. “We are facing a very worrying and possibly dangerous initiative that, for the first time, means that the European Commission intends to act directly on the issue of wages, which, from our perspective, must remain in the national competence of states.”

He pointed out that most countries in the EU have legislation on minimum pay and argued that it is “crucial to take into account and respect the diversity of existing labour relations systems in the different member states, as well as their methods of setting pay.”

He points out that the European Commission, “within the social policies established by the treaty on the functioning of the European Union, does not have the power to introduce wage enforcements such as ones that would interfere significantly in member states’ systems of setting pay.”

The president of the Confederation of Trade and Services of Portugal (CCP), João Vieira Lopes, also told Lusa that “Portugal has an established system of consultations around increases in the minimum salary” and so “the intervention of the European Commission is not justified”.

In Portugal, the national minimum salary, which this year is €635 (paid 14 times a year rather than 12) is set by the government, after consulting big employer representatives.

The opposition to the commission’s initiative is also shared by the Confederation of Tourism of Portugal (CTP), headed by Francisco Calheiros, who in written statements to Lusa states that “there are much more important issues in Europe to discuss at this time” and that any changes to pay “must respect the scope of negotiation, in particular, collective bargaining.”

He also argues that “the setting of a European minimum salary, even if in terms of a percentage of the average salary of each member state, is an attempt to further impose an EU administrative levy on setting something that must be granted member state by member state, based on its internal circumstances, in dialogue between social partners and governments”.

Among Portugal’s trade unions, positions differ, with the CGTP criticising the European Commission’s “interference” in this field and the rival UGT federation, for its part, agreeing with the proposal.

The CGTP’s secretary-general, Arménio Carlos, argued that “the European Commission’s proposal clearly aims to assume a logic of interference in what is the responsibility of each member state, which is to define collective hiring policies and at the same time salary increases.

“We are facing a trap because there is no European minimum salary,” he went on. “What there is is a discussion of criteria that, if applied, would be detrimental to Portuguese workers.”

The EU, he alleged, “remains committed to maintaining inequalities and labour legislation that accentuates imbalances in labour relations.”

The head of the UGT, Carlos Silva, by contrast expressed his “support for this Commission proposal” for “ensuring the existence of a minimum salary in all member states, but leaving the various governments and social partners the possibility of determining how to fix and update the value of the minimum salary, in line with the economic, business and social reality of each country.”

The European Commission headed by Ursula von der Leyen has stated its goal of “building a strong social Europe”, with proposals for action at EU level that it proposes to set in motion in the coming months. One of the first actions was the launch of the first phase of consultations on the issue of minimum pay in the EU, while making clear that the idea is not to standardise the minimum salary in Europe.

“There will not be a universal minimum salary,” the commission announcement states. “Any potential proposal will reflect national traditions, whether at collective agreements or in terms of legal provisions.” It notes that “some countries already have excellent systems in place.”

The objective is, rather, “to ensure that all systems are adequate, have sufficient coverage, include in-depth consultations with the social partners and have an appropriate upgrade mechanism.”

The commission argues that the initiative is justified by the fact that, while the rate of employment In the EU is at a historic high, “many workers have difficulty making the salary last to the end of the month”. So it aims to work to ensure that “each worker has a fair minimum salary that allows them to have a decent life, regardless of where they work” in the EU.

With regard to the consultation now started, the commission has stressed that “it is in listening mode”, as its objective at this stage is to find out “whether the social partners believe that EU action is needed and, if so, whether they wish to negotiate the issue with each other.”

According to data published in December by the commission, variations between minimum wages in Europe continue to be marked, ranging from €286 in Bulgaria to €2,071 in Luxembourg (2019 figures), with Portugal in the bottom half of the table, in 12th position out of 22 countries that have a legal minimum salary.

The minimum in Portugal on 1 January increased to €635, up from €600 last year. As 14 such salaries are paid per year, the new minimum is equivalent to €740 a month, up from €700.

Six EU member states – Austria, Cyprus, Denmark, Finland, Italy and Sweden – set no legal minimum.