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EU minimum wage law passes despite criticism from Sweden and Denmark

On Tuesday, EU officials hailed an agreement on setting common rules for establishing minimum wages across most of the bloc, though Sweden and Denmark had opposed the move.

EU minimum wage law passes despite criticism from Sweden and Denmark
European Commission president Ursula von der Leyen. Photo: Kenzo Tribouillard/AFP

The negotiations between EU member states and the European Parliament did not fix a nominal minimum salary to be applied, but rather what criteria must be used to ensure an “adequate” level is arrived at in each country.

The rules will be mandatory for 21 of the EU’s 27 member countries once the directive from Brussels is introduced into national statutes, which will take another two years.

Sweden and Denmark said they were against the directive, viewing it as political interference in their national wage-setting systems, based on collective bargaining.

But that is not enough to stop the measure going ahead, as more than 15 of the 27 EU countries back it, providing the necessary qualified majority.

The directive will not apply to six EU countries where collective agreements between unions and employers set salary levels: Austria, Cyprus, Denmark, Finland, Italy and Sweden.

European Commission chief Ursula von der Leyen said the new rules “will protect the dignity of work and make sure that work pays” while respecting “national traditions and social partners’ autonomy”.

Among the criteria to set statutory minimum wages will be weighing them against median salaries in the country and the cost of living, while also ensuring they don’t worsen gender pay gaps.

READ ALSO: Why is Denmark opposed to an EU minimum wage law?

Von der Leyen’s commissioner on jobs and social rights, Nicolas Schmit, told journalists the timing of the agreement was important, coming as the EU grapples with skyrocketing inflation and tight labour markets.

“In the present context, where we have such strong inflation, those on the lowest wages should not be the victims of these inflationary trends,” he said.

He added employers had incentive to back “fair wages,” which he said helped avoid “splitting the society (between) those who have, and those who have nothing”.

EU countries have a wide range of minimum salaries, going from 332 euros ($354) per month in Bulgaria to 2,202 euros in Luxembourg, according to official 2021 figures.

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FARMING

Danish meat producer announces 350 redundancies

Danish Crown, Denmark’s largest producer of meat, is to release 350 employees due to financial challenges, the company said.

Danish meat producer announces 350 redundancies

Financial problems suffered by farmers who supply pigs to the company are behind the decision to let staff go, Danish Crown said in a statement on Friday.

Two Danish Crown abattoirs are affected. Around 275 are to lose their jobs at Sæby, while another 75 at a factory in Ringsted are also to be let go. Danish Crown currently employs around 8,000 people in Denmark.

Poor economy in the production side of the business is to blame for the decision, the company said.

“This is a very unpleasant situation. The employees affected by this have produced excellent work. Since autumn 2020 and until a few weeks ago we have almost constantly had more slaughter-ready pigs than we could slaughter,” head of production Per Laursen said in the statement.

“But the situation now looks different and it hurts to see that we now are set to say farewell to around 350 competent staff,” he said.

High energy prices are a factor in the financial struggles that have led to the redundancies, as are increasing costs of feed. These have caused many farmers to scale back or stop production of pigs for meat production.

Statistics Denmark figures show that the number of pigs in Denmark fell by almost one million during the last year. 13.4 million pigs – more than double the number of people – lived in Denmark in January 2021 according to the agency’s records.

Data from industry organisation Danish Agriculture & Food Council (Landbrug & Fødevarer)

Show additional energy costs for the sector of 20 million kroner compared to 2021, financial media Finans reported on Thursday.

Danish Crown said it will invite released staff to interviews to discuss future options. The company is obliged to launch a social plan when firing large numbers of staff under the terms of its agreement with trade unions.

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