[Denmark] Annulment of EU Minimum Wage Directive requested

On October 19, 2022, the European Parliament and the Council adopted a directive on appropriate minimum wages in the European Union. The Danish government is now trying to annul the minimum wage directive at the European Court of Justice. Lexology reports on the move and its implications.

In October 2022, the European Parliament and the Council adopted Directive (EU) 2022/2041 on appropriate minimum wages in the European Union (Minimum Wage Directive), which must be implemented in national legislation no later than November 15, 2024.

In EU Member States, where statutory minimum wages have already been set, the Minimum Wage Directive reportedly obliges the Member State, among other things, to establish procedures for setting and continuously updating the minimum wage with the purpose of achieving adequate living standards, reducing poverty and reducing the gender pay gap.

The Minimum Wage Directive does not require Member States to introduce statutory minimum wages if the Member State does not already have statutory minimum wages. In Denmark, where minimum wages are set in collective agreements and not by legislation, the Minimum Wage Directive will therefore not oblige Denmark to introduce statutory minimum wages. 

However, the Minimum Wage Directive obliges all Member States with a collective agreement coverage rate of less than 80 per cent to draw up an action plan to promote collective bargaining. According to a calculation made by the Danish Employers' Association in December 2020, 82 per cent of Danish employees are covered by a collective agreement.

In accordance with the Minimum Wage Directive, Denmark will reportedly have to report to the Commission every two years on the rate of collective bargaining coverage, the lowest pay rates set by collective agreements and the wages of those not covered by collective agreements. 

Denmark’s annulment action

Regardless of the fact that the Minimum Wage Directive will not affect the determination of wages in Denmark, the Danish government issued a claim against the European Parliament and the Council on January 18, 2023, to annul the Minimum Wage Directive. 

In a statement from the Ministry of Employment, Employment Minister Ane Halsboe-Jorgensen reportedly said that the determination of wages must take place in Denmark and not in the EU and that the government, therefore, has decided that the EU Court must rule on the case. The annulment action has immense support from the social partners.

The European Parliament and the Council must submit a reply to Denmark's subpoena and then the Commission and the other Member States will have the opportunity to support either Denmark or the European Parliament and the Council in the case. 

The Member States are reportedly obliged to implement the directive, regardless of the annulment action issued by Denmark. 

The press release from the Ministry of Employment can be found here.

The Minimum Wage Directive in its entirety can be read here.

Source: Lexology

(links via original reporting)

On October 19, 2022, the European Parliament and the Council adopted a directive on appropriate minimum wages in the European Union. The Danish government is now trying to annul the minimum wage directive at the European Court of Justice. Lexology reports on the move and its implications.

In October 2022, the European Parliament and the Council adopted Directive (EU) 2022/2041 on appropriate minimum wages in the European Union (Minimum Wage Directive), which must be implemented in national legislation no later than November 15, 2024.

In EU Member States, where statutory minimum wages have already been set, the Minimum Wage Directive reportedly obliges the Member State, among other things, to establish procedures for setting and continuously updating the minimum wage with the purpose of achieving adequate living standards, reducing poverty and reducing the gender pay gap.

The Minimum Wage Directive does not require Member States to introduce statutory minimum wages if the Member State does not already have statutory minimum wages. In Denmark, where minimum wages are set in collective agreements and not by legislation, the Minimum Wage Directive will therefore not oblige Denmark to introduce statutory minimum wages. 

However, the Minimum Wage Directive obliges all Member States with a collective agreement coverage rate of less than 80 per cent to draw up an action plan to promote collective bargaining. According to a calculation made by the Danish Employers' Association in December 2020, 82 per cent of Danish employees are covered by a collective agreement.

In accordance with the Minimum Wage Directive, Denmark will reportedly have to report to the Commission every two years on the rate of collective bargaining coverage, the lowest pay rates set by collective agreements and the wages of those not covered by collective agreements. 

Denmark’s annulment action

Regardless of the fact that the Minimum Wage Directive will not affect the determination of wages in Denmark, the Danish government issued a claim against the European Parliament and the Council on January 18, 2023, to annul the Minimum Wage Directive. 

In a statement from the Ministry of Employment, Employment Minister Ane Halsboe-Jorgensen reportedly said that the determination of wages must take place in Denmark and not in the EU and that the government, therefore, has decided that the EU Court must rule on the case. The annulment action has immense support from the social partners.

The European Parliament and the Council must submit a reply to Denmark's subpoena and then the Commission and the other Member States will have the opportunity to support either Denmark or the European Parliament and the Council in the case. 

The Member States are reportedly obliged to implement the directive, regardless of the annulment action issued by Denmark. 

The press release from the Ministry of Employment can be found here.

The Minimum Wage Directive in its entirety can be read here.

Source: Lexology

(links via original reporting)