In a significant legal development, the Advocate General of the European Court of Justice (ECJ) recommended last month the annulment of the EU Minimum Wage Directive, thereby siding with Denmark in its legal challenge against the directive.
Denmark had brought the case before the ECJ on January 18, 2023, arguing that the directive infringed on national sovereignty over wage regulation. In his opinion issued on January 14, 2024, the ECJ’s Advocate General upheld Denmark’s position, asserting that the directive constitutes an unauthorized interference in wage-setting mechanisms within member states, an area outside the EU’s legislative competence.
Notably, the Advocate General stressed that the “principle of conferral” had been violated. This principle is “set out in Article 5(2) TEU” and, as the Advocate General explains, it “is essential in a European Union founded on the rule of law”, whereby “the European Union is to act only within the limits of the competences conferred upon it by the Member States in the Treaties.”
The Advocate General of the ECJ issued an opinion advocating for the annulment of the EU Minimum Wage Directive, adopted in 2022.
This opinion is a dangerous step towards dismantling key protections for workers across Europe.
Read more 👉 https://t.co/1te6klD4vg… pic.twitter.com/p4zkef9TwG
— The Left in the European Parliament (@Left_EU) January 14, 2025
Respect for National Wage Formation
The Minimum Wage Directive, adopted by the EU on October 4, 2022, does not impose a minimum wage in Denmark, where wages and working conditions are established through collective bargaining agreements between labor market participants. Nevertheless, Denmark pursued legal action against the European Parliament and the EU Council, contending that the directive overstepped EU authority by influencing wage structures in a way that member states should control.
The Advocate General concluded that the directive’s purpose and content interfere directly with wage-setting processes, which, according to EU treaties, remain the exclusive responsibility of individual member states. His opinion reinforces Denmark’s stance that the EU lacks the authority to regulate national wage formation.
Not the final ruling
While the Advocate General’s opinion is a critical victory for Denmark, it does not constitute the final ruling. The ECJ is not bound by the opinion and will issue its own decision at a later date. However, such recommendations are often influential in shaping the court’s final verdict.
Should the ECJ follow the Advocate General’s reasoning, the directive could be struck down entirely, setting a precedent for the limits of EU regulatory power in labor market policies. The ruling is eagerly awaited across the EU, particularly by countries that, like Denmark, rely on collective bargaining rather than statutory minimum wage laws.
The Advocate General is in any case very clear in demanding the complete annulation of the Directive, as he requests to “annul in full Directive (EU) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on adequate minimum wages in the European Union, on the ground that it is incompatible with Article 153(5) TFEU and, thus, with the principle of conferral laid down in Article 5(2) TEU.”
The case underscores the ongoing debate over the balance of power between the EU and its member states, with implications that could reach beyond wage policies and influence future EU labor market legislation.
Reactions
While leftist groups in the European Parliament have been condemning the Advocate General’s stance, at least the Danish Employer federation DI welcomed it, stating it “has been opposed to the EU’s attempts to regulate minimum wages from the start and is therefore very positive about the Advocate General’s clear rejection of the Minimum Wage Directive. DI believes that wages should continue to be agreed through collective bargaining between employers and employees. This is a fundamental element of the Danish labour market model. Even if the EU directive does not require Denmark to introduce a statutory minimum wage. However, it is still problematic that the EU has moved into areas that in Denmark are traditionally handled by the social partners.”
