Maltese MEPs vote in favour of EU’s minimum wage directive

An overwhelming majority of European lawmakers voted in favour of adopting the EU’s new minimum wage directive aiming to lift minimum wages in member states and strengthen collective bargaining.

All Malta’s MEPs voted in favour of the directive: Labour MEPs Alex Agius Saliba, Cyrus Engerer, Alfred Sant and Josianne Cutajar; and Nationalist MEP David Casa.

505 members of Parliament voted in favour with only 92 votes against and 44 abstentions.

“People are really struggling to make ends meet. We have no time to waste, work must pay again,” member of Parliament and co-rapporteur of the directive Agnes Jongerius said.

The EU Council is expected to formally adopt the directive later this month, which would then give member states two years to implement it in national law.

The directive has been criticised by Denmark and Sweden, two countries that use a very light-touch labour market regulation based on collective bargaining instead of statutory minimum wages.

Maltese MEPs have been largely supportive of the European directive on adequate minimum wages, which came with a call by European trade unions for a mandatory ‘threshold of decency’, to peg minimum wages to average wages in member states.

However, the directive will not force countries to implement a statutory minimum wage if they do not have one, which is the case for six member states. The member states that have a statutory minimum wage will have to ensure that it is “adequate”.

The adequacy should regularly be tested so the minimum wage can be reconsidered if circumstances change, for example, due to inflation. For the purpose of assessing the adequacy of minimum wages, the directive proposes that member states use the reference values of 60% of the gross median wage or 50% of the gross average wage.

These thresholds are higher than the minimum wage in most EU member states, meaning that minimum wages might be increased in the coming years. Mounir Satouri, Green MEP, said that “thanks to this directive, 25 million workers will see their salary increase by 20%,” and that this would also erode some of the gender pay gap between men and women in Europe.

But previously in March 2021, former Labour PM now head of the Labour delegation to the EP, Alfred Sant, was most categorical in his disagreement with this proposal. “At this stage, I agree with the ‘threshold of decency’ as an indicative not as a mandatory threshold for adequate minimum or living wages and this for two reasons,” he told MaltaToday.

Consistent to his sovereignist positions, Sant had said he does not like EU intervention or interference to spread in a mandatory fashion to internal economic and social running of member states. “When the Union operates in this way, it becomes counterproductive, though for social reasons, I can understand and sympathise with the point the ETUC proposal is making.”

The EU cannot force member states to apply higher minimum wages right away. Instead, it provides guidelines for what an adequate minimum wage should be.

And the directive requires member states to draw up national action plans to increase the collective bargaining coverage in the workforce if their collective bargaining coverage is below 80%.

Both the Maltese government and the Nationalist opposition in the national parliament were opposing the EC’s proposal to set minimum wage standards across the bloc.

In a reasoned opinion to Brussels in 2021, the Maltese parliament said wage conditions were a national prerogative and the EU lacked authority to legislate in this area. “Since parts of the proposal are proposed to be binding for all member states, the Maltese parliament sees this as an infringement on national mechanisms for wage formation.”

A European Commission study found that Estonia, Malta, Ireland, Czechia, Latvia, Hungary and Romania had minimum wages below 40% of the national average wage.

In 2018, in nine member states, Malta included, the statutory minimum wage did not protect minimum wage earners against the risk of poverty.