Trade unions have welcomed a European Court of Justice ruling that confirmed the validity of the EU directive on Adequate Minimum Wages, following a challenge brought by Denmark and supported by Sweden. The Court rejected arguments that the EU had exceeded its authority, finding the directive to be broadly lawful.
In its judgment, the Court held that while the EU had gone beyond its powers in two specific areas, the core provisions remain intact. These include requirements on governments to promote collective bargaining, establish reference indicators for assessing minimum wage adequacy, and support stronger protections for workers and trade unions. The ruling confirms that the directive is a legitimate instrument for improving wage-setting systems across member states.
The decision represents a setback for Denmark, which argued that wage regulation falls exclusively within national competence. The CJEU instead found that the directive operates within the EU’s social policy remit and does not require member states to introduce statutory minimum wages.
In Ireland, the judgment reinforces the Government’s recently published action plan under the directive, which outlines measures to expand collective bargaining coverage. The Irish Congress of Trade Unions said the ruling removes any remaining uncertainty around the directive’s legality and urged progress on implementing the plan.
Employer group IBEC noted that the Court recognised limits to EU involvement in national wage-setting but welcomed the legal clarity. The directive aims to ensure that adequate minimum wage mechanisms function effectively across the European Union while respecting domestic industrial relations frameworks.