The Advocate General in favor of complete annulment of the Minimum Wage Directive

On 14 January 2025 the Advocate General delivered an opinion on the action for annulment by the Danish Government (and supported by Sweden) seeking the annulment of the Minimum Wage Directive. The Advocate General proposes that the Directive be annulled in its entirety.

Background

The Minimum Wage Directive (Directive) was adopted on 4 October 2022 and requires Member States to establish a framework to improve the adequacy of statutory minimum wages and enhance effective access of workers to minimum wage protection, including through collective bargaining. Among other things, the Directive requires countries with a collective bargaining coverage rate of less than 80% to draw up an action plan to promote collective bargaining.

The Directive does not regulate the level of minimum wage in Denmark, where wages and other working conditions will continue to be agreed between the social partners in collective agreements. Nevertheless, the Danish government, with the support of Sweden, filed a lawsuit against the European Parliament and the Council of the EU to have the Directive annulled, as the Danish government does not believe that the EU has the power pursuant to EU Treaties to influence wage formation in the individual Member States.

Denmark and Sweden have argued that the European Parliament and the Council lacked competence to adopt the Minimum Wage Directive under Article 153(2)(b) TFEU, read in conjunction with Article 153(1)(b) TFEU. These provisions empower the European Parliament and the Council to adopt, by means of directives, minimum requirements relating to ‘working conditions’. However, Article 153(5) TFEU states that the EU does not have any jurisdiction or competence to interfere with pay, the right of association and the right to strike or the right to impose lock outs in the Member States.

Opinion of the Advocate General

In the Advocate General’s opinion of 14 January 2025, the Advocate General supports the Danish Government’s claim that the purpose and content of the Directive constitute a direct interference with pay conditions in the European Union, which the EU is not competent to regulate under the EU Treaties. This is a subject that has been left to the individual Member States. The Directive therefore risks exceeding the competence of the European Union by interfering with the sovereign right of the Member States to regulate wages and working conditions.

On this basis, the Advocate General concludes that the Directive should be annulled in its entirety.

Mette Klingsten Law Firm notes

The Court of Justice of the European Union is not bound by the Advocate General’s opinion; however the court often follows the Advocate General’s opinion. Until a decision is made, by the Court of Justice Member States must continue to work on implementing the directive. The implementation deadline was 15 November 2024.

We will follow the case closely and will update our news page when there is a final decision from the European Court of Justice. A final verdict in the case is expected within the next six months.

The Opinion of the Advocate General of 14 January 2025 in Case C-19/23 can be read here.