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07/12/2016

European Parliament divided over German minimum wage regulation

Transport

European Parliament divided over German minimum wage regulation

Should national minimum wage laws apply to truck drivers passing through a certain EU member state? Countries with lower wages are sceptical, and MEPs are uncertain. EurActiv Germany reports.

The European Parliament was divided in a minimum wage debate on Wednesday (25 March) with Transportation Commissioner Violeta Bulc.

MEPs in Brussels discussed whether minimum wage regulations in an EU member state should also apply to foreign truck drivers passing through that country.

Bulc made it clear that national regulations must comply with EU law. The Commission has not yet concluded its investigation of German measures and their effects, she said. For this reason, Bulc explained, the Commission cannot yet provide a clear response to the parliamentary question.

But, she said, the Commission would address the question on social standards and working conditions in the transportation sector in its legislative proposals for the “road transport package” planned for 2016.

Germany was the 22nd EU member state to introduce a minimum wage when the regulation took effect on 1 January 2015.

The European Commission is currently investigating Germany’s enforcement of the new minimum wage law, including for foreign truck drivers in transit.

Complaints were submitted from several EU member states, claiming a limitation of competitive freedom and excessively high bureaucratic obstacles.

At the end of January, the German government temporarily suspended the minimum wage requirements for truck traffic. Germany’s Labour Minister Andrea Nahles explained the reasoning behind the move after a meeting with her Polish counterpart W?adys?aw Kosiniak-Kamysz in Berlin. The new arrangement also applies to inspections which have already been started.

“If procedures have already begun, these will be cut short,” the Labour Ministry reported. But the suspension only applies to transit traffic and not to cross-border traffic with a start or destination in Germany.

On 21 January, the Commission initiated an EU pilot procedure to investigate whether applying the minimum wage to transit routes through Germany is compatible with EU law. The Ministry said the suspension will apply until the EU’s inspection has concluded.

On Wednesday many MEPs emphasised the necessity of avoiding social dumping and promoting fair competition among transport companies.

Some of them suggested introducing an EU-wide minimum wage and called on the Commission to make proposals on the protection of social rights and working conditions for drivers. This should also include a “black list” of companies who disregard the requirements, the MEPs said.

MEPs discuss problems with the measure

Vice Chairman of the Parliament’s Committee on Employment, Thomas Mann (EPP), said he was surprised that Bulc did not do anything “meaningful”.

“In the plenary, she was not able to make any precise indication over whether German minimum wage rules for foreign truck drivers are compatible with EU law or not,” he stated.

By suspending the minimum wage for purely transit travel, Mann said the German government commensurately reacted to “the sometimes excessive criticism from Eastern Europe”.

“Now the European Commission should work out how to prevent competition distortions, which burden the employer and the mid-sized companies in the transport and logistics sectors,” Mann concluded.

Jutta Steinruck described the discussion over the legality of Germany’s minimum wage law as strange.

“In EU law, truck drivers fall under the provisions of the Posting Directive or the Rome I Regulation,” said the social and employment policy spokesperson from the German Social Democratic Party’s.

“Both rules make it possible for member states to create their own rules on the protection of employees from abroad,” Steinruck commented.

Other MEPs emphasised that the application of national minimum wage laws for transit drivers hinders the free movement of goods.

This would contradict the EU’s internal market laws and subsidiarity principle, because it creates additional costs and bureaucratic obstacles for transport companies from abroad, the MEPs pointed out.

For MEP Gesine Meißner, transport policy spokeswoman for ALDE, the German government has overshot the target with its minimum wage law.

“Our European neighbors are right to be frustrated, because Germany is including international transit, so that it can in part decide the salaries for foreign transport companies – not to mention the added bureaucratic burden.”

EU neighbours reject the German wage law

On Monday (23 March), Polish truck drivers blocked streets protesting at the German border against Germany’s minimum wage. The freight forwarders accused the German government of breaking EU law. The chairman of the Association of Television Transport, Jan Buczek said, “we are being crushed by the increase in costs”.

Shipping companies from Austria, Poland and Hungary are taking action against the German minimum wage with a constitutional complaint. The complaint was submitted to the German Constitutional Court on 11 March. A ministry spokesperson said the German Labour Ministry will be waiting “calmly” for the Karlsruhe-based court to make a decision.

Background

On 1 January 2015, Germany introduced a general minimum gross salary of €8.50 per hour. 

The wage floor will be readjusted yearly, starting in 2018. A minimum wage committee consisting of employer and employee representatives will decide on the adjustments made. Researchers will advise the committee. The German government can make the adjustment binding by regulation for all employers and workers.

Almost all EU member states - 21 of the 28 - have a legal minimum wage covering all sectors. The exceptions - besides Germany for the time being - are Denmark, Finland, Italy, Austria, Sweden and Cyprus.

>>Read: Merkel cabinet agrees on €8.50 minimum wage