The Court of Justice of the European Union (CJEU) ruled on Tuesday that the European Union exceeded its competences when it imposed rules regarding the minimum wage.
The Luxembourg-based court annulled two provisions of the European directive adopted in 2022, stating that they interfered with the right of member states to establish their own wage policies.
The highest EU court, headquartered in Luxembourg, annulled a provision establishing criteria for setting and updating salaries and another one that prevented salary reductions if they were subject to automatic indexation.
Denmark challenged the regulations adopted by the majority of EU states in 2022, and the court has now issued a partial verdict in favor of the Nordic country, as reported by dpa.
The judges stated that specifying criteria for minimum wage levels directly interferes with the setting of wages, which, according to EU treaties, remains the responsibility of member states.
The same reasoning applies to the provision that blocks salary reductions within automatic indexation, usually a formula linked to inflation.
The rest of the directive remains in force, including the obligations of countries to encourage workers to engage in collective negotiations regarding working conditions and wages.
The CJEU appreciated that this provision does not constitute a direct violation of the right to freedom of association, as member states are not obliged to compel workers to join a union.