On 14 January 2025, a significant threat emerged to the European Union’s social policy agenda. Advocate General Nicholas Emiliou of the Court of Justice of the European Union (CJEU) issued an opinion recommending the full annulment of Directive (EU) 2022/2041 on adequate minimum wages. While not binding, the Advocate General´s opinion casts serious doubt over the future of a directive designed to improve wage adequacy and strengthen collective bargaining across the EU, which is considered a cornerstone of the European Pillar of Social Rights.
The directive, adopted with the backing of 24 out of 27 Member States, does not mandate a universal EU minimum wage. Instead, it sets a framework encouraging Member States to ensure that their statutory minimum wages are adequate, and more importantly, that collective bargaining covers at least 80% of workers. It aims to combat in-work poverty, promote social cohesion, and level the playing field in the internal market, especially where wage competition undercuts fair labour practices.
Yet the directive now hangs in the balance. The Advocate General´s opinion came in the context of Case C-19/23, brought by Denmark and Sweden, countries that had opposed the directive from the outset. Both governments, with the support of employers’ associations and trade unions, argue that the directive oversteps EU competence under Article 153(5) TFEU, which excludes “pay” from the Union’s legislative remit. The Advocate General appears to support this view, suggesting the directive indirectly regulates pay, even though it explicitly leaves wage levels to the discretion of Member States.
This legal interpretation, however, is far from settled. Critics argue that the directive does not set wage levels but merely provides procedural standards and adequacy criteria with benchmarks like 60% of the gross median wage or 50% of the gross average wage to guide national wage-setting systems. In fact, trade unions across Europe stress that the directive respects the autonomy of social partners and does not interfere with national traditions of wage bargaining.
Despite the legal uncertainty, Member States remain legally bound to transpose the directive by 15 November 2024. Some have taken minimalistic approaches, implementing the bare legal minimum. Others, like Malta, have gone slightly further. Malta’s Minimum Wage and Collective Bargaining Regulations, 2024, introduce a detailed action plan with timelines, targets, and a five-year review mechanism to improve collective bargaining coverage. The law also sets out formal negotiation procedures and extensive data-keeping requirements for trade unions and employers exceeding the directive’s procedural baseline. However, Malta’s legislation does not include the adequacy benchmarks (50–60%) suggested in Article 5 of the directive. With Malta’s minimum wage currently amounting to €961/month or just 46% of median gross earnings, this omission raises concerns over whether wages are objectively adequate.
The first 2025 Eurofound data show that Malta, despite a 3.9% increase in its minimum wage, is slipping down EU rankings. In relative terms, its minimum wage is among the lowest in proportion to median earnings. With 17 EU Member States having fewer than 25% of workers unionised, and only three having a majority, the erosion of collective bargaining over the last two decades has undermined fair wage-setting across the continent.
The directive sought to reverse this trend. It called for national action plans to increase union access, protect worker representatives from retaliation, and align public procurement with fair labour standards. Yet the Advocate General´s opinion now threatens to invalidate this policy approach entirely. This would not only weaken efforts to reduce wage inequality but also represent a political blow to the EU’s social model.
Importantly, Advocate General opinions are not binding. The CJEU often follows them, but it also frequently diverges, especially in politically sensitive cases. Given the ambiguity in the treaties, which is even acknowledged in the opinion given by the Advocate General, the Court may take a more nuanced view, balancing legal interpretation with the political consensus of 24 Member States and the clear public interest in tackling in-work poverty.
Even if the directive were to be annulled, this would not prevent Member States from continuing to implement its principles. The political will exists. Countries can still choose to raise minimum wages and promote collective bargaining autonomously. What is at stake, however, is the EU’s role in shaping fair labour standards, a role that was significantly expanded after the 2008 financial crisis and is now being tested.
Ultimately, this case is not just about wage formulas or legal competences but about the social values of the European Union. At a time when these values are under pressure from economic uncertainty, geopolitical instability, and rising populism, defending the right to fair wages and strong social dialogue is more important than ever. Employers should stay alert to national developments in wage-setting laws, but policymakers must also ensure that the EU remains a credible actor in the fight for decent work across the continent.
