IR Notes

On 11 November, the EU Court of Justice handed down an eagerly awaited judgment, upholding Directive 2022/2041 of 19 October 2022 on adequate minimum wages virtually in its entirety. Denmark had been seeking its annulment. The Court went against the opinion of its Advocate General, who argued that the EU had exceeded its powers with this text (see IR Notes 244). Article 153(5) TFEU does state that the competence of the EU “shall not apply to pay, the right of association (…)”, which includes the right to form trade unions and engage in collective bargaining. However the view taken by Denmark, which is supported by Sweden, is that the directive contains measures constituting direct interference in the determination of pay, which is therefore prohibited by the treaty. In its judgment, the Court of Justice holds that the ability of the EU legislature to achieve the aims of social policy “would be seriously compromised” if it were “prevented from adopting measures which, in practice, have positive effects or repercussions on the level of pay”. Especially since the measures adopted are aimed at working conditions, of which pay forms an integral part, and they come within the EU’s competence. The Court analyses all of the contested provisions. As far as Article 5(1) of the directive is concerned, the Court notes that its wording leaves a significant margin of discretion to Member States with statutory minimum wages to define the “adequacy” of these wages, and confirms that this does not confer a right to an adequate statutory minimum wage on workers or a right to the updating of such wages. Consequently, this article does not constitute direct interference. On the other hand, the Court censures Article 5(2), which lists four elements that national criteria should include when defining the adequacy of statutory minimum wages: “the purchasing power of statutory minimum wages, taking into account the cost of living”; “the general level of wages and their distribution”; “the growth rate of wages”; and “long-term national productivity levels and developments”. The Court holds that this “harmonisation” of some of the constituent elements of these wages represents direct interference by EU law in the determination of pay. Other than this partial annulment, and the less far-reaching annulment of Article 5(3), the Court upholds all the provisions of the directive, and in particular those intended to: 1/ encourage States to use the indicative reference values commonly used at international level (60% of gross median wage and 50% of gross average wage) to assess the adequacy of statutory minimum wages; 2/ require every Member State in which the collective bargaining coverage rate is below a threshold of 80% to provide “conditions such as to enable collective bargaining” and “an action plan to promote collective bargaining”; 3/ protect workers and their representatives who assert their right to the protection offered by minimum wages; 4/ involve social partners “in the setting and updating of statutory minimum wages”, in an effective and timely manner. Consequently this directive, which has already produced some positive effects, according to a Eurofound study, is now safe. Isabelle Schömann, Deputy General Secretary of the European Trade Union Confederation, says that 19 Member States have now transposed it into their domestic law. Of these, “nine have done so in a satisfactory way” and four countries, including Ireland (see below), have already adopted action plans to boost collective bargaining coverage.

“Omnibus I” Directive : Parliament has adopted its negotiating position on the simplification of corporate reporting obligations relating to sustainability (CSRD directive) and due diligence (CS3D directive). There were 382 votes in favour, 249 against and 13 abstentions. Negotiations with the Council of the EU will commence on 18 November, with a view to finalising the directive by the year end. The text, which was adopted thanks to support from the three far-right groups, marks a further relaxation of requirements compared to the text proposed by the committee (see IR Notes 260). In particular, the obligation under the CS3D directive to produce a climate transition plan, has been completely removed.

Reaction to the “minimum wage” judgment (see Lead story) : The ECJ’s decision to uphold the minimum wage directive has been welcomed by the European Trade Union Confederation (ETUC). In response to the annulment of Article 5(2), Esther Lynch, its General Secretary, calls on the European Commission to adopt a recommendation to Member States on the criteria to be used to ensure the adequacy of the minimum wage (see press release).  All of the major European confederations have welcomed this decision, seeing it as an “important signal for social Europe” (see press releases issued by the DGB in Germany, the CFDT and CGT in France, the CGIL in Italy, the CO.OO in Spain and Cartel Alpha in Romania).  Even the Nordic trade unions, which are opposed to the directive, are pleased with the judgment. The President of the Danish Trade Union Confederation (FH) comments that the Court has “partially found in Denmark’s favour” and has “set limits on EU interference in pay-related matters” (see press release). This opinion is shared by the Swedish confederation LO (see press release). The Danish Minister of Employment also sees this judgment as “a partial victory” (see press release). BusinessEurope adopts a similar tone, commenting that “this partial annulment should lead to better consideration of the limits of the EU Treaty by EU policy makers in the future” (see press release).

Algorithmic management : On 12 November, the European Parliament’s Committee on Employment and Social Affairs adopted, by a large majority (41 votes in favour, 6 votes against and 4 abstentions), a report calling on the European Commission to adopt a directive on algorithmic management in the workplace. The text will be presented at Parliament’s plenary session in December. If the text is adopted, the Commission will then have three months to set out its intentions. Parliament would like this text to extend the protections granted to platform workers by Directive 2024/2831 of 23 October 2024 to all employees. The text states that employers will have to provide workers and their representatives with written information in the form of “a clear statement that algorithmic management systems are in use or intend to be introduced to carry out automated or semi-automated decision-making (…)”. The roll-out, use and update of new algorithmic management systems would be referred for consultation with workforce representatives, to ascertain, among other things, the impact of these systems on working conditions, and on occupational health and safety. Workers or their representatives would also have to be entitled to ask their employer “to trigger a review of the functioning of the algorithmic management systems in place where there is a justified concern that such systems exhibit systemic biases, discrimination or faults, or pose a threat to the mental or physical well-being of workers or to health and safety at the workplace”. The text adopts the principle of a ‘human in control’ of final decisions taken, such as recruitment or dismissal, and prohibits the processing of data relating to “emotional, psychological or neurological states, cognitive activity or biometric data of the workers”.

> See also: a study of algorithmic management in the workplace (see here for a summary), performed on behalf of the European Parliament.

Bereavement leave : According to the 2026 budget agreement adopted by the governing parties on 23 October, employees who lose their spouse or partner, and have dependent children who are minors, will be entitled to a maximum of 12 weeks’ bereavement leave, with daily allowances (see press release). This new leave was introduced following a citizens’ petition launched in 2023.

Asbestos : Parliament has reached an agreement on a national asbestos strategy, which is intended to put an end to fraud linked to asbestos tests, and to impose imprisonment sentences in the most serious cases (see press release). The results of preliminary asbestos tests have to be disclosed to employees at their workplace, but there have been examples of building owners and employers falsifying results before passing them on to employees. From now on, the results will also have to be submitted to the body responsible for occupational safety within the company, or, where there are fewer than 10 in the company’s workforce, to its employees directly. The text also abolishes the waiver granted to certain companies in respect of high-pressure cleaning of asbestos roofs.

Youth employment : To encourage the creation of jobs for young people, the government and social partners have concluded an agreement on simplifying the regulations governing employment of young people aged between 13 and 17, so that they can work part-time after school in more sectors. The text provides for a rethink of the list of prohibited equipment. From 1 January 2026 onwards, the employer will have to perform a risk assessment linked to young people’s use of equipment, so that they can be entrusted with tasks such as lawn mowing, and floor sweeping or washing, using equipment that they were previously not allowed to operate as it was on the prohibited list (see press release).

Collective bargaining : On 5 November, the government unveiled an Action Plan to Promote Collective Bargaining, which it was required to prepare under Directive 2022/2041 on adequate minimum wages. Measures include facilitation of digital and physical access for trade unions to workplaces, publication of a Code of Practice on Collective Bargaining and the reintroduction of tax relief for trade union subscriptions (see press release). The initiative has been welcomed by the Irish Congress of Trade Unions (see press release).

Individual dismissal : On 23 October, the government put forward a draft law to facilitate individual dismissals, which is intended to remove “a significant barrier to hiring staff”. The aim is for this law to enter into force on 1 January 2026 (see press release). This new law will mean that the employer only has to put forward one valid reason linked to the employee’s performance as justification for terminating a contract of indefinite duration, such as a breach of obligations (failure to comply with the employer’s instructions, neglecting work, absences for no valid reason, etc.), rather than the several “proper and weighty” reasons currently required. The Finnish Trade Union Confederation (SAK) claims that the reform “will lead to an increase in dismissals and workplace-related disputes” (see press release).

A new EWC : The agreement establishing the European Works Council of the poultry meat production group LDC, signed in 2024 (see IR Notes 228), was published on 21 October. This body covers 25,000 employees in the EU, including 20,000 in France. It is made up of employees who have a mandate as workers’ representatives, and LDC management promises that no EWC member can be “appointed by management”. The EWC has 13 members (8 for France, 3 for Poland and 2 for Hungary). It will hold two face-to-face plenary meetings per year, and two select committee sessions will be conducted on line between plenary meetings. The EWC will be entitled to issue an opinion on management’s plans at the end of the wrap-up meeting held after the plenary meeting, or failing that, “within one week following the end of the meeting”. Beyond this time, the consultation process will be deemed to have come to an end. A representative of the European trade-union federation EFFAT will be entitled to attend its meetings for the first two years, following which there will be a discussion of whether to allow the federation to continue attending meetings. However, EFFAT is disappointed that this restriction has been imposed (see press release).

Brexit : France’s Institute of Economic and Social Research (IRES) has published the results of a study of the impact of Brexit on European Works Councils, analysing the choices made by 64 multinationals. Before Brexit, most of these companies had a EWC established in France, Germany and the United Kingdom. 32 of them opted to “keep their British representatives on the EWC permanently, with their rights intact”. This “stability” proved to be “the dominant result”. In 17 cases, management chose to “abide by the law, and the law alone” by unilaterally deciding to exclude the United Kingdom and its representatives from the EWC, despite opposition from employee representatives. In some cases, “the lack of participation by UK members (either because they were Brexit supporters or simply inactive) may have helped to justify” this decision. In 13 cases, management viewed Brexit as a “window of opportunity” to partially renegotiate (and downgrade ) the terms of their EWCs’ existence. Conversely, at two companies, this window of opportunity “was used to expand the EWC to take in other States beyond the EU’s borders, such as Ukraine, Switzerland and Turkey”.

Mental health : A Swedish study performed by the Saco trade union highlights the over-representation of women – especially young female graduates – among employees on stress-related sick leave. In April 2025, more than 33,000 women were on sick leave following a stress diagnosis, compared to just under 9,000 men. Two thirds of professions requiring a high-level university degree present a heightened risk. These professions are primarily those involving contact with the public, such as advisers, social workers and psychologists, as well as architects and doctoral students. “We can’t ignore the fact that young female graduates are the group most affected by stress in Sweden”, says Saco’s President Göran Arrius (see press release).