On 11 November 2025, the Court of Justice of the European Union (CJEU/Court) delivered the anxiously awaited judgment in Denmark v Parliament and Council (C-19/23). Save for a small part of it, the Court confirmed that the adoption of the Directive on adequate minimum wages from 2022 falls within the competences conferred on the Union by the EU Treaties. This was the most momentous judgment for the European trade union movement, and for EU labour lawyers, since the Viking and Laval duo in 2008; and it is likely to go down in history as one of the most significant CJEU rulings in the making of ‘Social Europe’.

The first part of this blog set out the background to and outcome of Denmark’s action for annulment of the EU Directive on adequate minimum wages. Here, we delve into the Court’s reasoning for upholding the validity of Articles 4 and 6, and the rest of Article 5, before discussing the broader implications of the judgment for Social Europe.

Keeping the bulk of the Directive alive: The Court’s reasoning

The Court confirmed that Articles 4, 5 (except the annulled sections) and 6 all fall outside the exclusion of ‘pay’ from EU competence. A common theme in the reasoning related to all three provisions is the emphasis placed on state and collective autonomy for the finding that no direct interference took place.

In respect of Articles 4 and 5, the Court stressed that Member States and social partners retain broad discretion in determining a statutory minimum wage (SMW) and negotiating and concluding collective agreements. It further highlighted that the Directive contains ‘procedural’ requirements rather than prescribing specific results that determine SMW or the outcome or content of collective bargaining. In other words, what made the difference is that EU rules would not directly influence the levels of minimum wages.

In respect of Article 6, the Court found EU countries are still free to introduce (or not introduce) variations or deductions. Article 6 ‘merely requires’ any variations or deductions to comply with non-discrimination and proportionality and thus does not directly interfere in pay levels (para 106).

On the ‘right to association’, the Court took a narrow view of the exclusion as not covering measures governing the right to collective bargaining. This finding was informed, among others, by the existence of separate provisions on the rights to association and collective bargaining in some human rights instruments (such as the EU Charter and European Social Charter). As a result, it confirmed EU competence to legislate on collective bargaining under Article 153(f) TFEU, ‘representation and collective defence of the interests of workers and employers’ (para 136). However, this legal basis requires unanimity among Member States in the Council of the EU to adopt legislation, which is difficult to achieve in practice.

A finding of potentially greater significance is that ‘working conditions’ (Article 153(2)(b) TFEU) can serve as a legal basis for collective bargaining rules. The latter need only to be a means for promoting working conditions, and their effect on representation and collective defence to be ‘ancillary’ to this aim (para 136). In this case, the duty to promote collective bargaining was construed as a means for ensuring the adequacy of minimum wages (which are considered part of working conditions). Using ‘working conditions’ as a legal basis offers a crucial advantage. Aside from the approval of European Parliament, only a qualified majority is needed among Member States in the Council to adopt legislation (i.e., the support of at least 15 out of 27 states,  representing at least 65% of the EU population).

Implications of the judgment for Social Europe

The judgment can be considered a landmark moment in the evolution of Social Europe and its complex relationship with the CJEU. Its significance lies not only in what the Court decided, but equally in the path not taken: by rejecting the full annulment of the Directive, the Court avoided a major setback for (Social) Europe. It is too early to understand the longer-run implications of the judgment, but we can identify some immediate effects.

First, the judgment finally confirms the validity of most of the Directive with its core substance, innovations, and spirit intact, allowing the focus to shift to effective implementation. Second, it adopts an interpretation of the exceptions of ‘pay’ and ‘right to association’ that allows substantial scope for interventions not only in wage-setting but also in collective bargaining. In this sense, the Directive successfully tested the boundaries of what EU law is permitted to do in these areas.

Third, and very importantly, it confirmed that if collective bargaining provisions are related to the objective of promoting ‘working conditions’, a qualified majority (rather than unanimity) suffices. The same reasoning could apply to other legal bases listed in Article 153(1), such as workers’ health and safety or equality between men and women, if collective bargaining is shown to be an effective means to promoting them. This is significant. The judgment opens up legal space here that policy-makers can creatively use to strengthen the social dimension of the European project.

Conclusion

By any measure, the judgment is overall a positive step for Social Europe. Of course, the very fact that the Directive encountered such a strong challenge shows that genuine progress towards Social Europe is often an uphill battle. And while the judgment is a cause for celebration, it is important to avoid complacency. The judgment did not bring by itself any change on the ground and the implementation of the Directive is still a work in progress. But the CJEU has opened a door for progressive social experimentation and innovation in advancing Social Europe. Walking through that door, however, ultimately depends on political will matched by concrete action.