The Court of Justice has largely upheld the validity of the Directive on fair minimum wages in the European Union
The Court of Justice ruled in its judgment in case C-19/23 of 11.11.2025 that the adopted Directive on fair minimum wages in the European Union is largely valid. However, it annulled the provisions on mandatory criteria for determining and updating the statutory minimum wage, as well as the prohibition on its reduction in the event of automatic indexation.
On 19.10.2022, the European Parliament and the Council adopted the Directive on minimum wages in the European Union. Its aim is to improve living and working conditions in the Union by establishing a framework to ensure the adequacy of statutory minimum wages in the Member States where such wages exist, while promoting collective bargaining in their determination.
Denmark has brought an action before the Court of Justice of the EU for annulment of the Directive, on the grounds that it interferes with national powers in the areas of pay and the right of association.
The Court stated that the exclusion of Union competence under the Treaties does not apply to all matters relating to pay or the right of association. Nor does it apply to measures which may have an indirect effect on the level of pay, otherwise the Union's powers to support and supplement the action of the Member States in the field of employment law would be weakened. The exclusion therefore concerns only direct interference by Union law in the setting of pay and in the exercise of the right of association.
After examining the purpose and content of the Directive, the Court of Justice found that direct interference with national powers could be identified only in two specific cases.
First, the Directive requires Member States with existing statutory minimum wages to take certain criteria into account when setting and updating them. In this way, it harmonises certain components of statutory minimum wages and directly intervenes in the determination of remuneration.
Second, the same applies to the rule prohibiting reductions in statutory minimum wages where national legislation provides for their automatic indexation.
The Court therefore annulled the provisions of the Directive which constituted direct interference by the Union in the determination of remuneration and exceeded its legislative powers. It dismissed Denmark’s action as to the remaining parts.
In particular, the Court held that the Directive did not constitute a direct interference by the Union with the right of association. It reached this conclusion in particular in relation to the provision of the Directive on ‘the promotion of collective bargaining for the purpose of wage setting’, since it did not require Member States to ensure a greater number of trade union members. The Court also rejected Denmark’s argument that the Directive had been adopted on the wrong legal basis.
