On 14 January 2025, the Advocate General proposed that the CJEU annul the EU Directive on adequate minimum wages.

Written by

The Directive on adequate minimum wages in the European Union (the “AMW Directive”) took effect on 14 November 2022 and the deadline for the EU member states to implement the Directive into national law was 15 November 2024. Our article on the adoption of the AMW Directive can be found here.

In short, the AMW Directive does not impose an actual minimum wage on member states. It requires member states with statutory minimum wages to put in place a procedural framework for setting and updating minimum wages and member states without statutory minimum wages to introduce means to promote coverage of collective agreements. All member states must collect and report data on minimum wages to the EU.

From the very beginning, the AMW Directive has been met with considerable resistance from Denmark, although it is considered to have little immediate impact in Denmark, and on 18 January 2023, Denmark lodged an action for annulment against the European Parliament and the Council, which was later supported by Sweden. We have previously written an article about the action for annulment, which can be read here.

The Danish government claimed for the annulment of the AMW Directive, arguing it is incompatible with the EU Treaty provisions that give the European Parliament and the Council the competence to adopt directives on “working conditions”, while “pay” is expressly excluded from the EU’s competence.

The European Parliament and the Council – with the support of the European Commission and seven member states – argued, among other things, that the AMW Directive does not breach the EU Treaty provisions, as the Directive does not directly interfere with the wage-setting mechanisms of member states, but only sets the procedural frameworks for wage-setting.

Opinion of the Advocate General
In its Opinion, the Advocate General assessed that the AMW Directive should be annulled in its entirety because it is incompatible with the EU Treaty basis.

The Advocate General first noted that the exclusion to the EU’s competence regarding “pay” is not limited to measures harmonising the “level of wages” itself in member states, as the exclusion also covers measures harmonising other aspects of the wage-setting mechanisms of member states.

The Advocate General then assessed that the objective of the AMW Directive is to regulate ”pay”. The Advocate General emphasised, among other things, that the title of the AMW Directive, which contains the word ”wages”, is a ”clear and even obvious sign that the object of the AMW Directive is to regulate ”pay””. An interpretation of the preamble and provisions of the Directive confirms that objective.

For these reasons, the Advocate General found that the Directive is incompatible with the Treaty provision which states that the EU does not have the competence to adopt directives on “pay”.

Norrbom Vinding notes:

The Advocate General’s Opinion is not binding on the CJEU. The question of whether the AMW Directive is incompatible with the EU’s Treaty-based competence to adopt directives regarding labour market issues, and should therefore be annulled, will not be finally settled until the CJEU makes its ruling in the case.

The ruling will also have an impact on how to interpret the exclusion provision specifying that the EU does not have the competence to adopt directives on “pay”.

We will provide an update when the CJEU makes its final ruling in the case. 

The content of the above is not, and should not be a substitute for legal advice.