EU: Council Agrees Position on Two Labour-Related Draft Laws

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The Employment, Social Policy, Health and Consumer Affairs Council, which was attended by the Croatian Minister for Labour, Pension System, Family and Social Policy, Josip Aladrović, agreed the common position based on which member states will negotiate with the European Parliament the final texts of the two laws.

The proposal on pay transparency should help tackle the existing pay discrimination at work and close the gender pay gap. It aims to empower workers to enforce their right to equal pay for equal work or work of equal value between men and women through a set of binding measures on pay transparency.

Member states agreed that employers have to make sure their employees have access to the  objective and gender-neutral criteria used to define their pay and career progression.

In accordance with national laws and practices, workers and their representatives have the right to request and receive information on their individual pay level and the average pay levels for workers doing the same work or work of equal value, broken down by sex. Employers also need to indicate the initial pay level or range to be paid to future workers – either in the job vacancy notice or prior to the conclusion of the employment contract. 

The gender pay gap in the EU stands at around 14%, which means that women earn on average 14% less than men per hour. There are a number of inequalities underlying this pay gap. Women are overrepresented in relatively low-paying sectors such as care and education, the so-called glass ceiling leads to their underrepresentation in top positions, and in some cases women earn less than men for doing equal work or work of equal value.

The Council also agreed on a proposal for a directive on adequate minimum wages in the EU.

The aim of the directive is not to harmonise the level of minimum wages within the EU or set a uniform European minimum threshold, because the Union does not have jurisdiction over such matters. The aim is to establish minimum conditions for setting adequate minimum wages based on clear and stable criteria which would be updated in a regular and timely manner, as well as to ensure the inclusion of social partners. In most EU member states minimum wages are not adequate.

All 27 member states have minimum wages. In 21 of them, including Croatia, they are regulated by law, while in six countries (Austria, Cyprus, Denmark, Finland, Italy and Sweden) they are agreed through collective bargaining.

Countries with a high collective bargaining coverage tend to have a smaller share of low-wage workers and higher minimum wages than those with low collective bargaining coverage. That is why ministers agreed that countries should promote strengthening the capacity of social partners to engage in collective bargaining. If their collective bargaining coverage is below 70%, they should also establish an action plan to promote collective bargaining.

Croatia is far from 70%

Minister Aladrović said that Croatia is relatively far from the 70% threshold as its collective bargaining coverage is estimated at between 30% and 35%.

“Nevertheless, I am confident that we will attain this threshold of 70%. It is attainable, especially in the private sector. In Croatia, collective bargaining is mostly linked to the state and public sector and not the private sector, where at this point we have one expanded collective agreement,” he said.

Aladrović said that Croatia would strengthen collective bargaining through the amended Labour Act, which is now under preparation.

“It includes a number of provisions aimed at strengthening collective bargaining, which is important to protect workers and make employment more certain. This is also important to employers so that they can make long-term plans,” he said, adding that this would also have an indirect effect on increases in average and minimum wages.

“I am quite sure that we will attain the planned level of average and minimum wages before the time indicated in the government programme,” Aladrović said.

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