In its judgment of 11th of November 2025 in Case C-19/23, Denmark v Parliament and Council (Adequate Minimum Wages), the Court of Justice of the European Union (CJEU) upheld the substantive validity of Directive (EU) 2022/2041 on adequate minimum wages in the European Union, while annulling two provisions deemed to constitute a direct interference with Member States’ exclusive competences in the field of wage determination.
Regulatory Background
Adopted on 19th of October 2022, the Directive aims to improve living and working conditions across the European Union by establishing a legal framework to ensure the adequacy of statutory minimum wages in Member States and to strengthen collective bargaining in the determination of pay levels.
Denmark challenged the Directive and sought its full annulment, noting that trade unions and employers in Denmark determine minimum wages exclusively through collective bargaining rather than by law. According to the Danish Government, the Directive infringed the division of competences between the European Union and the Member States, constituting direct interference in wage-setting and the right of trade-union association, areas expressly reserved to Member States by the Treaties.
Findings of the Court
The Court first clarified that the exclusion of EU competence laid down in the Treaties does not cover every measure merely connected with pay or producing indirect effects on wage levels. Otherwise, the Union’s supportive role in improving working conditions would be deprived of substance.
The exclusion therefore applies only to measures that amount to direct interference by the Union in wage determination.
On this basis, the Court identified two provisions of the Directive that exceed EU competence:
- the provision requiring Member States with a statutory minimum wage to apply certain mandatory criteria when setting and updating such wages;
- the rule prohibiting the reduction of the minimum wage in national systems providing for automatic indexation mechanisms.
The Court annulled these provisions because it considered them a form of substantive harmonization of national wage policies. This harmonization breaches the Member States’ exclusive competence in this area.
Scope and Implications of the Judgment
In all other respects, the Court dismissed Denmark’s action, confirming the overall validity of the Directive. In particular, it held that the provisions promoting collective bargaining do not constitute direct interference with the right of association. They do not oblige Member States to modify their systems of trade-union representation or to increase union membership rates.
The ruling thus clarifies the boundaries of EU action in the field of wages. The European Union may set objectives relating to the adequacy and transparency of minimum wages. However, it may not establish technical parameters or intervene directly in their determination.
Through this decision, the CJEU reaffirms the political objectives of the Directive. It ensures fair minimum wages and promoting collective bargaining. At the same time, it underscores the primacy of national competences in the concrete management of wage-setting mechanisms.
