News     13.11.2025

Denmark’s Claim against the Minimum Wage Directive Dismissed by the CJEU  

In 2023, Denmark challenged the validity of Directive (EU) 2022/2041 on Adequate Minimum Wages (“Directive”) before the Court of Justice of the European Union (CJEU). Denmark argued that the Directive threatened its labour-market model, which relies almost entirely on collective bargaining and does not include a statutory minimum wage. According to Denmark, the EU lacked competence to legislate in areas concerning wage determination.

On 11 November 2025, CJEU delivered its judgment, dismissing Denmark’s action in full and confirming that the Directive is compatible with the EU treaties. TSUE clarified that the Directive does not require Member States to introduce a statutory minimum wage and does not impose any wage level. Instead, it sets procedural and organisational standards in the field of working conditions, which fall within EU competence. The ruling stressed that the Directive respects national traditions and the autonomy of social partners, including the Danish collective bargaining model.

For businesses operating across the EU, the judgment provides legal certainty. Companies can expect more structured and regular review processes for minimum wages, which may influence salary planning and labour-cost projections. The growing focus on collective bargaining may also lead to new or updated agreements at sector level, requiring companies to monitor developments more closely and adjust internal policies where necessary.

Against this background, it is helpful to recall the main objectives and mechanisms of the Directive itself.

The European Union (EU) has established a framework aimed at strengthening wage protection for low-paid workers, while still respecting the autonomy of national wage-setting systems. The Directive, adopted in 2022, forms part of the EU’s broader social policy agenda and seeks to ensure that work provides a decent standard of living across the EU. Rather than harmonising wage levels, the Directive focuses on the way minimum wages are set, reviewed and monitored, promoting transparency and more predictable wage-structuring processes in each Member State.

The Directive applies to all workers who fall under an employment relationship as defined by national laws. In Member States with statutory minimum wages, governments are required to follow clear criteria when reviewing wage levels, taking into account factors such as cost of living, productivity developments and overall wage trends. At the same time, deductions from minimum wages and any variations between worker categories must remain limited and objectively justified. Although the Directive does not interfere with the prerogative of Member States to determine wage levels, it creates procedural protections to ensure that minimum wage guarantees are effective in practice.

A main element of the Directive is the promotion of collective bargaining. In Member States where less than 80% of workers are covered by collective agreements, authorities are encouraged to take measures to increase bargaining coverage. This reflects the EU Commission’s view that collective bargaining remains one of the most effective tools for securing fair wages and stable labour conditions.

Since its adoption, the Directive has triggered adjustments across Europe. Several Member States have changed their statutory minimum wages (e.g. Romania, Portugal) or reformed their wage-setting procedures to align with the Directive’s requirements. Others (e.g. Spain) have taken steps to support sectoral bargaining or reduce administrative and legal barriers to the negotiation of collective agreements. These developments have contributed to higher wage levels for many low-income workers and reduced differences between Member States with the highest and lowest minimum wages.

With the Directive confirmed as valid, its implementation will continue across the EU. Over time, both employers and employees are expected to benefit from a clearer and more stable system for determining minimum wages.

Grzegorz Kłodkowski