The European Court of Justice (ECJ) has ruled that the EU directive on adequate minimum wages remains valid, rejecting Denmark’s challenge that the bloc had overstepped its powers by legislating on pay. The ruling marks a major step forward for EU efforts to ensure fair wages across the continent and a setback for countries that insist wage-setting should remain a national prerogative.
Denmark, supported by Sweden, had brought the case against EU institutions after the directive’s adoption in October 2022. Both countries, which rely on collective bargaining rather than statutory minimum wages, argued that the EU Treaty forbids Brussels from interfering in pay-setting mechanisms. They maintained that wage negotiations must remain the domain of trade unions and employers, warning that the EU’s approach could undermine their well-established labour models.
But in its decision on Tuesday, the Luxembourg-based court rejected Denmark’s arguments and confirmed “the validity of most of the directive in question,” stating that it does not represent “direct interference by EU law with the right of association.”
The ECJ also dismissed claims that the legislation was adopted on the wrong legal basis, affirming the EU’s competence to set general principles on working conditions.
Still, the court did annul two provisions of the directive. One related to the criteria for determining what constitutes an “adequate” minimum wage, and another that would have prevented reductions in countries where minimum wages are automatically indexed. The court found these elements amounted to undue interference in national pay determination.
The ruling diverged from the opinion issued earlier this year by the Court’s Advocate General, who had recommended that the directive be struck down entirely.
The Socialists and Democrats (S&D) group in the European Parliament hailed it as “a powerful signal of hope and social justice,” particularly amid Europe’s ongoing cost-of-living and housing crises. “No excuses for delay anymore,” the group said, urging all EU governments to step up implementation efforts. So far, only eight member states have formally transposed the directive into national law.
The European Trade Union Confederation (ETUC) also welcomed the verdict but expressed concern about the annulled provisions. “The directive is solid, but it needs solid implementation,” said ETUC General Secretary Esther Lynch. “Workers need real pay rises and real bargaining power, not legal loopholes.” She warned that removing the safeguard on automatic indexation could be exploited to justify cuts to statutory minimum wages.
The European Minimum Wage Directive aims to ensure that all EU workers earn wages that provide a decent standard of living, reduce in-work poverty, and narrow the gender pay gap. It also seeks to promote collective bargaining and expand wage protection across the bloc.
As of January 2025, gross monthly minimum wages in the EU range from €551 in Bulgaria to €2,638 in Luxembourg, according to Eurostat. While Denmark has no statutory minimum wage, the ECJ’s decision underscores that Europe’s social agenda is moving firmly toward greater wage fairness — even amid continued national resistance.
The far-left also celebrated the achievement. In a statement, German MEP Özlem Demirel said that the decision provides clarity for well over 20 million workers who live in households at risk of poverty despite being employed. “It is an important sign that the Court has confirmed the essential parts of the directive. However, it is very regrettable that the path to poverty wages has not been blocked and that automatic indexation, particularly with regard to inflation, has not been implemented. Similarly, European trade unions can now combat poverty wages in their member states on the basis of the European directive”, she added.
