Denmark takes minimum wage directive to the EU Court

Both voted against the directive out of principle, but while the newly elected Danish government has decided to try to have the directive annulled by the EU Court, the Swedish government has decided not to do so and implement the directive. EEA countries Norway and Iceland do not seem to have to implement it at all. 

Denmark’s new government came to power on 14 December. One item on its programme is to take an annulment suit to the EU Court to have the directive ruled invalid. This happened January 18 (press release in Danish).

The Swedish government had already announced it would not do the same. According to Deputy Minister for Employment Paulina Brandberg, Sweden got so many of its central demands through during the negotiations on the directive that the result “could be handled” without making changes to the Swedish wage negotiation model. Thus, the day after the Danish government made its announcement, a commission was tasked with looking into what Sweden might have to do in order to implement the directive.

The commission’s starting point is that the Swedish labour market model must be protected and that the social partners’ autonomy and right to negotiate and enter into collective agreements will be fully respected. The government underlines that the commission cannot propose other measures beyond those that are necessary to implement the EU directive. Among the issues it will consider is whether Sweden is doing enough to promote collective bargaining; what measures should be implemented if collective agreement coverage was to fall below 80 percent; and if the collection of data on minimum wages needs adjusting in some way so that Sweden can monitor the minimum wage protection and report to the European Commission in line with directive demands.

Like Denmark and Sweden, Norway too has questioned whether the EU really is able to adopt directives with the kind of content that the minimum wage directive has. But Norway (and Iceland) have not been able to influence the negotiations on the directive as they are not EU member states, only part of the European Economic Area, EEA. 

Norwegians have nevertheless been following the negotiations closely since most directives relating to labour legislation become binding also for EEA countries. Yet some are not – it all depends on a directive’s importance to the function of the internal market. 

When it comes to the directive on minimum wages, the Norwegian government has concluded that, unlike other directives relating to labour legislation, it is not relevant to EEA countries. The European Commission seems to have taken the same approach. This means Norway and Iceland do not need to implement the directive. 

Finally: There is much talk about the Nordic labour market model. There are indeed many similarities between the Nordics, especially compared to other EU countries, but there are also important differences. Finland has welcomed the directive on minimum wages from the start.