A turning point: Why the CJEU’s minimum wages ruling matters

In its landmark judgment delivered on 11 November 2025, the Court of Justice of the European Union confirmed the legality of the EU Directive on Adequate Minimum Wages—an outcome that carries substantial weight for Europe’s wage-setting landscape. The ruling reaffirms that the EU can set a framework to ensure that statutory minimum wages allow workers to maintain a decent standard of living and that collective bargaining systems across the Union are reinforced and expanded.

Although the Court invalidated Article 5(2), which had introduced a detailed set of EU-level criteria for evaluating the adequacy of minimum wages, this adjustment leaves the broader architecture of the Directive untouched. The essential obligation for Member States to ensure minimum wages meet the threshold of adequacy remains firmly anchored in Article 5(1).

Likewise, Article 5(4) continues to provide Member States with important benchmark indicators—namely, the 60% of median wage and 50% of average wage reference points—to guide national reviews and adjustments. Crucially, all the provisions aimed at cultivating stronger collective bargaining remain in effect, including the requirement for countries with low bargaining coverage to prepare national action plans. The Directive’s non-regression clause, which prevents Member States from weakening their wage-setting systems, also remains fully applicable.
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Main elements of the Court’s judgment:

• The Court confirmed the EU’s authority to set a framework for adequate minimum wages.
  It held that EU action on working conditions may legitimately influence wage levels, as long as it does not directly determine pay. This interpretation preserves space for meaningful EU initiatives to combat low pay and wage inequality.
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• Only two provisions were annulled for overstepping EU competences.
  The Court struck down Article 5(2), which imposed detailed EU-level criteria for assessing wage adequacy, and Article 5(3), which prohibited the reduction of minimum wages when automatic indexation mechanisms are in place. These were considered too intrusive into national wage-setting autonomy.
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• The core adequacy framework remains intact.
  Article 5(1) continues to anchor minimum wages in the requirement of a decent standard of living, and Article 5(4) retains the key reference values—around 60% of the gross median wage and 50% of the gross average wage—providing clear benchmarks for national updates.
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• Collective bargaining provisions were fully upheld.
  The Court confirmed the legality of measures requiring Member States with low collective bargaining coverage to prepare National Action Plans and to actively strengthen bargaining structures. These are not seen as interference with the right of association.
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• The non-regression clause remains unaffected.
  Member States remain bound not to weaken existing protective elements of their wage-setting systems, ensuring the Directive drives progress rather than regression.
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• The Court clarified the distinction between the right of association and the right to collective bargaining.
  It underlined that Article 153(5) TFEU excludes EU competence only in relation to association—the freedom to create, join, or not join organisations—not collective bargaining itself. Therefore, measures regulating or promoting collective bargaining remain within EU competence.
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• The legal basis of the Directive was confirmed.
  The Court rejected arguments that unanimity was required for adoption, affirming that the Directive was validly adopted by qualified majority within the scope of EU powers on working conditions.
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The political message of the ruling is equally significant. As CESI Secretary General Klaus Heeger stressed at the time of the judgment, the Court has made it clear that the European Union retains the authority to act decisively in favour of fair pay. With the Directive upheld, national governments now have full legal clarity to raise statutory minimum wages and invest in robust collective bargaining structures.

The expectation is that Member States will use this certainty to push wage floors upwards—towards what can genuinely be considered a decent standard of living—and to reinforce workers’ negotiating power through stronger, more inclusive collective bargaining frameworks.

Looking ahead, governments are urged to move quickly: to translate the Directive into concrete reforms, strengthen collective bargaining coverage and institutions, and set minimum wages at levels that correspond to real living costs. Aligning national measures with international norms will be essential for creating durable, rights-based wage-setting systems.

CESI has reiterated its readiness to support these processes through social-partner dialogue and legislative follow-up, with the overarching aim of securing fair, adequate wages for all workers across Europe.