EU top court rejects Denmark's bid to annul bloc-wide rules to set minimum wage

The European Court of Justice (ECJ) ruled on Tuesday that an EU directive aiming to establish an "adequate" minimum wage in all 27 member states is valid, after Denmark tried to block it on the basis that the EU overreached its powers by legislating on pay.

Denmark had brought the EU institutions to court over the directive adopted in October 2022, claiming it exceeds the EU’s authority and calling for it to be entirely overturned.

Copenhagen, aided by Sweden, maintained that member states should decide how wages are set, primarily through collective agreements between trade unions and employers, and that the EU is not permitted to set legislation on pay.

But the court confirmed "the validity of most of the directive in question" in its ruling on Tuesday, arguing that it "does not amount to direct interference by EU law with the right of association".

It also rejected Denmark's claim that the directive was adopted on an incorrect legal basis.

However, it did annul two of the directive's provisions arguing they "amount to direct interference by EU law in the determination of pay".

One of the provisions aimed to set out criteria over how this adequate minimum wage should be set, while the other sought to prevent the decrease of the statutory minimum wage in countries where they are automatically indexed.

The decision conflicts with the opinion issued in January by the Advocate General, who assists the Court in preparing cases and had recommended that the directive be annulled on the grounds that it exceeds the EU’s legal powers.

The Socialists and Democrats (S&D) group in the European Parliament welcomed the ruling, writing in a statement that it "in times of a cost-of-living and housing crisis, this is a powerful signal of hope and social justice".

"So far only eight EU member states have implemented the directive. Now, we urge the member states and the Commission to step up efforts to ensure the proper implementation of the directive. No excuses for delay anymore," it added.

The European Trade Union Confederation (ETUC) similarly called on "member states to stop the ‘wait and see’ approach and to get on with implementing the Directive in full".

“The Directive is solid, but it needs solid implementation. Workers need real pay rises and real bargaining power, not legal loopholes. Europe must make sure every worker earns a wage that meets the threshold of decency, and promote effectively collective bargaining and increase collective bargaining coverage,” Esther Lynch, the organisation's general secretary, also said.

Still, it declared itself "very concerned" about the removal of the provision that prevented automatic indexation which it fears could be "used as a reason to reduce statutory minimum wages".

Euronews has contacted Denmark's Ministry of Employment for comment but did not receive a reply by the time of publication.

The European Minimum Wage Directive seeks to ensure adequate statutory minimum wages, promote collective bargaining, and improve workers’ access to minimum wage protection across the bloc.

Under the rules, EU countries must implement procedures to guarantee that minimum wages provide a decent standard of living, reduce in-work poverty, promote social cohesion, and narrow the gender pay gap.

The directive was approved with the support of all member states except Hungary, which abstained.

As of January 2025, gross monthly minimum wages in the EU ranged from €551 in Bulgaria to €2,638 in Luxembourg, according to Eurostat.