1. Introduction
Anticipated with both interest and unease, the Grand Chamber of the Court of Justice (CJEU; the Court) delivered its judgement on the legal basis of the Adequate Minimum Wages Directive 2022/2041/EU (AMWD, the Directive) in November 2025.Footnote 1 Although the Court annulled limited criteria on setting and updating statutory minimum wages,Footnote 2 it upheld the Directive as a whole, including its legal basis in Article 153(1)(b) Treaty on the Functioning of the European Union (TFEU). Within the social policy title, this provision allows the European Union (EU) to adopt minimum requirements on ‘working conditions’ through co-decision and qualified majority, while Article 153(5) TFEU excludes, inter alia, pay (pay exclusion) and the right of association (association exclusion) from competence.
In navigating Article 153(5) and confirming the AMWD, the Court accommodated divergent wage-setting systems by embedding the Directive within the broader objectives of Title X TFEU on social policy (the social policy title). Its reasoning hinged on two elements: a strong emphasis on the social objectives of the Directive and Title X TFEU; and that Article 153(5) limits EU action only where a measure concretely amounts to direct interference rather than linking to excluded matters. Both elements contrast sharply with the Opinion of Advocate General (AG) Emiliou, delivered in January 2025, which proposed a broad reading of the pay exclusion to annul the Directive.Footnote 3
This careful judgement is a landmark in EU and labour law.Footnote 4 If Defrenne II balanced market and social objectives in EU integrationFootnote 5 and Albany negatively carved out an exception within competition law to uphold social policy objectives,Footnote 6 this judgement positively develops a space for an exercise of EU competence within the social policy title that preserves the capacity to realise Social Europe objectives, respects social partner autonomy and Member State diversity and protects and promotes collective bargaining. In what follows, we characterise these three dimensions as the judgement’s somewhat hidden theory of Social Europe. This theory sharpens arguments for advancing Social Europe, articulating its multiple levels and actors, and pursuing upward social convergence in living and working conditions. The analysis first presents the case and the Court’s approach to the pay and association exclusions and the working-conditions competence (Section 2). We then scrutinise the notion of ‘direct interference’, which at first sight risks appearing to offer a clear test of EU competence, but whose certainty we contest. Drawing on the Court’s assessment and current EU proposals to ban unpaid traineeships, we argue that the test alone fails in hard cases (Section 3). Instead, it is the Court’s theory of Social Europe that supplies direction and heft to it (Section 4). We explore three consequences of this theory (Section 5): its implications for European fundamental rights; its reconfiguration of the social policy title; and its broader implications for collective labour rights in EU law.
2. Key features of the case
A. Origins of the judgement
This Grand Chamber judgement stems from an annulment action by Denmark, supported by Sweden, both outvoted on the AMWD’s adoption.Footnote 7 In addition, most Nordic trade unions and employer organisations opposed the AMWD because it was seen as threatening the autonomy of their domestic wage bargaining models.Footnote 8 Denmark argued that the Directive lacked an appropriate legal basis on two grounds. First, Article 153(5) TFEU excludes pay and, as regards the Directive’s promotion of collective bargaining, the right of association from EU competence. Second, the Directive also concerns the ‘representation and collective defence of the interests of workers and employers’, a competence requiring Council unanimity, which makes it incompatible with the legal basis chosen.Footnote 9 Subsidiarily, Denmark sought annulment of Articles 4(1)(d) and (2) AMWD on collective bargaining for incompatibility with Article 153(5) TFEU.
AG Emiliou supported this challenge in January 2025 proposing annulment of the Directive in its entirety on the ground that it directly interfered with pay. The Court unusually and clearly departed from this Opinion. That this extensive 147-paragraph judgement was delivered almost three years after the action was lodged and close to a year after the AG Opinion further underscores its significance for Social Europe and EU law.Footnote 10
B. The Court’s approaches
Compared with other major validity actions in EU social policy, the judgement appears distinctive. Unlike Test-Achats, it did not proceed to a substantial annulment with consequential social implications,Footnote 11 yet annulment was not merely symbolic as in Working Time.Footnote 12 The Court may have annulled limited provisions of the AMWD, a constitutionally important event, but the establishment of competence limits is not so unusual in politically salient annulment proceedings, notably in the social field.Footnote 13 The Court, though, aligned itself more closely with the, at least in principle, confirmatory line of reasoning on social policy competences already employed in Working Time by retaining most of the AMWD. This positioning results from the Court’s approaches to the three elements of the social policy title at stake: the pay and association exclusions, and the working conditions’ competence.
The pay exclusion: the approach
The CJEU made considerable efforts to clarify its earlier case-law, in which pay featured as an ancillary element of directives addressing other matters, such as fixed-term work.Footnote 14 The applicable test required a concrete assessment of what constitutes direct interference with pay determination, leading the Court to scrutinise the Directive’s relevant provisions.Footnote 15 A mere ‘link’ to pay did not suffice for direct interference.Footnote 16 EU measures may thus have positive repercussions on pay without undermining collective autonomy or Member State competence.Footnote 17 This approach clearly, albeit implicitly, contradicts the AG’s view that any such link would trigger the exclusion.Footnote 18
The association exclusion: the approach
Contrary to the broad reading of Article 11 of the European Convention on Human Rights (ECHR) on freedom of association to encompass collective bargaining and the right to strike,Footnote 19 the CJEU adopted a narrow understanding of ‘association’ to avoid bringing the AMWD’s collective bargaining provisions within the exclusion. Association was defined as the right to form and to (not) join interest organisations, including trade unions, and their right to operate without state interference.Footnote 20 As with pay, only measures that directly and thus concretely interfere with association so defined fall within the exclusion.Footnote 21
This understanding was developed in three steps. First, the Court linked all four exclusions in Article 153(5) TFEU to the protection of social partner prerogatives in work regulation.Footnote 22 Second, it relied on the Treaty’s distinction between association and collective bargaining, notably Article 153(1)(f) on representation and collective defence and, to rebut Denmark’s unanimity argument, on Article 156 TFEU that empowers the Commission to coordinate policy on association and collective bargaining.Footnote 23 Third, the broader normative context confirmed this distinction, including the separation of association (Article 12) and collective bargaining (Article 28) in the EU Charter of Fundamental Rights (EUCFR), as well as in the 1989 Community Charter of the Fundamental Social Rights of Workers (Community Charter) and the European Social Charter (ESC).Footnote 24
The working conditions competence: the approach
Finally, the Court set aside Denmark’s argument that Article 153(1)(f) TFEU should have been used. Since that provision requires unanimity, while Article 153(1)(b) allows qualified majority voting and co-decision, a dual legal basis was procedurally impossible.Footnote 25 Although both competences were considered germane, collective bargaining was treated as a means to adequate minimum wages, not as the Directive’s main goal.Footnote 26 Working conditions thus constituted the dominant and appropriate sole legal basis.Footnote 27 Where regulation of working conditions overlaps with collective bargaining, the EU legislator may promote the latter under Article 153(1)(b) TFEU and,Footnote 28 in light of Article 152 TFEU’s promotion of social partner action, may even be required to do so.
3. Clear and simple? Direct interference as a key, yet uncertain test for EU social policy competence
The test delimiting EU social policy competence first appears to crystallise in paragraph 68 of the judgement, which requires a concrete assessment of what constitutes direct interference with a competence exclusion.Footnote 29 This notion clarified earlier case-law, departed from the AG’s Opinion and created the space used to save almost all of the AMWD. In our view, however, the test offers crispness and direction only when read through the theory of Social Europe embedded in the judgement and reconstructed below.Footnote 30 Based on the Court’s application of the test, and current debates on unpaid traineeships, this section exposes the uncertainty that the test generates in hard cases when considered in isolation. These hard cases will be central to the future development of EU social policy, as the judgement opens new regulatory spaces around pay and collective bargaining.
A. The pay exclusion and the direct interference test: legal politics and uncertainty
The test’s indeterminacy first emerges when comparing the provisions annulled with those upheld under the pay exclusion. For annulment, the Court held that the pay exclusion prevents the EU from defining criteria that will guide Member States in setting and updating statutory minimum wages. It therefore annulled references in Article 5(2) AMWD requiring consideration of wage growth, long-term productivity, purchasing power and overall wage levels and distribution. Although these criteria were non-exhaustive, freely weighted and defined by national practices and agreement, this was insufficient to remove them from the realm of direct interference with pay determination.Footnote 31 The same reasoning underpinned annulment of the requirement that automatic indexation must not result in statutory minimum wage decreases.Footnote 32 The Court further confirmed – although this is not at issue in the AMWD itself – that the EU cannot determine pay constituents or their level, establish an EU minimum wageFootnote 33 or prescribe wage-setting models.Footnote 34 Nor could Article 31(1) EUCFR on the right to working conditions respecting health, safety and dignity be relied upon to derive an individual right to an adequate statutory minimum wage or its updating from the Directive.Footnote 35
Regarding the upheld provisions, the reasoning centred on the AMWD’s reliance on EU-wide aims and obligations of means rather than pay-setting results. On collective bargaining, Article 4 AMWD validly requires Member States to protect the (wish to) exercise the right to collective bargaining, including protection of workers and trade union representatives from discrimination, and from interference by the other side of industry. Where bargaining coverage falls below 80 per cent, Member States must establish enabling conditions and adopt an action plan to increase coverage.Footnote 36 For the Court, none of these provisions constituted direct interference with pay determination: the 80 per cent threshold functions as an aim, while Member States’ obligations concern enabling conditions and an action plan only.Footnote 37 Some public intervention in bargaining modalities is permissible,Footnote 38 but social partners retain broad autonomy, which this provision ‘fully guarantees’.Footnote 39
On statutory minimum wages, the Court largely confirmed EU-wide aims and procedural obligations set by the Directive. Article 5 AMWD requires Member States with statutory minimum wages to maintain setting and updating procedures guided by national criteria aimed at social and redistributive objectives like decent living standards, reducing in-work poverty and the gender pay gap, or upward social convergence. States must review and update statutory minimum wages,Footnote 40 establish advisory committees, and set indicative reference values, potentially including international adequacy benchmarks such as 60 per cent of gross median wages.Footnote 41 However, adequacy remains an indicative aim rather than an EU concept.Footnote 42 Article 6 AMWD on non-discriminatory deductions and variations avoids direct interference as Member States remain free to introduce statutory minimum wages.Footnote 43
From this, it is apparent that the line between annulled broad non-exhaustive criteria to be defined and weighted nationally and upheld EU aims, indicative references and procedural obligations is not purely legal but also political. In other words, the decision is also an example of legal politics as it allowed Denmark’s arguments not to be entirely dismissed. EU-wide aims, optional standards and mandatory procedures and institutions seem permissible, whereas mandatory standards and obligations of result are not. The legislator could, for instance, have saved the annulled clause on automatic indexation by reformulating it as an aim rather than a requirement, which of course would profoundly transform its normative force.Footnote 44
B. The association exclusion in practice: unsettled questions
Having already found that Article 4(2) AMWD complied with the pay exclusion, the Court applied its narrow understanding of association to hold that this provision does not oblige workers to join trade unions, as the 80 per cent threshold is only an aim.Footnote 45 Article 4(1)(c), protecting workers and union representatives from discrimination in wage bargaining, was treated as regulating bargaining rather than association.Footnote 46 The more delicate test concerned Art 4(1) (d), which appears to require protection against mutual interference by unions and employer organisations. The Court accepted that this relates to freedom of association, namely the rights to establish and organise associations,Footnote 47 but concluded that it does not directly interfere with it, relying on the provision’s reference to national action ‘as appropriate’. This reference characterised the provision as not obliging Member States to act and avoiding harmonisation of measures eventually adopted.Footnote 48
This application of the direct interference test, however, sits uneasily alongside its annulment of the pay criteria in Article 5(2), discussed earlier, where Member States likewise retained broad discretion in weighting criteria. Although the distinction may stem from the Court’s view that Article 5(2) imposed mandatory criteria while Article 4(1)(d) merely articulated an aim followed up ‘as appropriate’, this does not fully explain why similar obligations under Articles 4(1), 5(1), 5(4)–(6), and 6 were upheld.Footnote 49 One has to accept that these provisions are considered different in nature from the annulled requirements for Member States to weight according to national conditions certain exceptionally generic criteria on wage evolution. Perhaps more plausibly, the Court in fact focused on the measure’s primary object: Article 5(2) was understood to primarily concern pay, while Articles 4(1)(c) and (d) primarily concern collective bargaining despite their association implications. Even so, the direct interference test alone lacks sufficient explanatory power for these hard cases.
C. Direct interference applied to banning unpaid traineeships: too hard a case to judge
The test’s uncertainty becomes most apparent when applying it to the EU legislative process, notably the currently relevant hard case of banning unpaid traineeships. Unpaid traineeships remain widespread,Footnote 50 expose trainees to in-work poverty, stratify school-to-work transitions by social origins and generate insecurity in access to labour law, social protection and collective bargaining.Footnote 51
Responding to growing pressure,Footnote 52 the Commission proposed a Directive on traineeships in 2024 under Article 153(1)(b) TFEU, the same legal basis as the AMWD.Footnote 53 Uncertainty surrounding the pay exclusion has, however, constrained both the proposal and the debate. The main tool remains the insertion of equal treatment clauses. The Commission and Council propose equal treatment in working conditions, including pay, unless differences are justified by ‘objective grounds’.Footnote 54 The Parliament requires that trainees are not treated less favourably ‘on the sole ground that they are undertaking a traineeship’.Footnote 55
While these provisions appear uncontentious under the test taken alone,Footnote 56 their effectiveness in banning unpaid traineeships is doubtful.Footnote 57 How does the AMWD judgement assist the EU legislature in designing an effective instrument to address unpaid traineeships? A formulation committing Member States to aim for traineeship pay would likely be compatible but ineffective. Could an EU Directive lawfully contain a requirement to pay trainees ‘a wage’? An obligation to ensure the result that trainees be paid would probably directly interfere with the choice of wage-setting models and collective autonomy. Even if transposition were entrusted to social partners under Article 153(3) TFEU, the state would remain responsible for ensuring effectiveness.Footnote 58
The hardest question, and where the test really lacks certainty, concerns a procedurally formulated obligation such as ‘Member States shall establish, as appropriate under national conditions, the necessary procedures to ensure that all traineeships are paid’. This mirrors upheld provisions of the AMWD, like Article 5(1) on statutory minimum wages or Articles 4(1) and (2) on collective bargaining. It avoids prescribing wage-setting models but could still risk being understood as an obligation to achieve results that constrains national choices, which would then directly interfere with pay. Would adding ‘to aim’ suffice to avoid the exclusion, and at what cost to effectiveness? Taken alone, the direct interference test provides insufficient direction for such contemporary and future hard cases in the fresh regulatory spaces of pay and collective bargaining. While it signals a restrictive reading of the exclusions, it cannot conclusively resolve hard cases when taken in isolation, such as for unpaid traineeships. Read instead through the Court’s theory of Social Europe, reconstructed in the next section, we suggest that the test becomes more capable of guiding legislative action and collective bargaining, including on traineeship pay.
4. The Court’s theory of Social Europe
The previous section argued that, although it may be tempting to read the judgement as developing a clear and determinative test of direct interference for all competence exclusions, in our view such a reading would be mistaken. It overlooks the Court’s broader normative framingFootnote 59 – its theory of Social Europe – which gives the test and the judgement their direction. Although the Court would never present itself as an elaborator of theory, it often performs this function in its significant rulings. To identify the CJEU’s hidden theory is neither simply a doctrinal exercise nor to look outside law for the ‘real reasons’ underlying the Court’s reasoning. It is not, in other words, centrally an exercise in assessing legal persuasiveness or systematising coherence, although we remain deeply interested in the Court’s legal arguments. Nor is it primarily an attempt at political explanation, even though legal politics may sometimes explain parts of the reasoning – including, as we suggest, that limited annulments ensured the Nordic states did not go away empty-handed. Rather, our aim is to read the judgement differently from how it would be viewed in purely doctrinal or political perspectives: we aim to reveal how the CJEU selected, assembled and interpreted EU legal materials to articulate a distinctive imaginary of how the law of Social Europe is structured and operates. This hidden theory, we suggest, is a notable – albeit not immediately obvious – feature of the judgement. It is theoretical because it constructs the law of Social Europe, its possibilities, limits and boundaries, in ways that include but also extend well beyond settling the specific dispute before the Court.
The Court’s theory of Social Europe is not set out in one place; rather, it emerges across the judgement. While unsurprisingly tailored to the specific case and leaving questions open, it nonetheless provides direction for a strengthened Social Europe. It is a resource to mine for making sense of the test’s indeterminacy and Social Europe’s regulatory space. The best place to start identifying this theory is the competence exclusions. The Court emphasised that abandoning the direct interference test would allow the exclusions to seriously compromise EU social policy competence and, with it, the social dimension of European integration.Footnote 60 Inverting this statement makes sense of it: it is the need to safeguard EU social policy competence and the social dimension of European integration that determines how to understand the test.
This contrast is clearest when set against the AG’s approach. The AG adopted a broad understanding of pay, such that any direct interference with or regulation of pay, regardless of its degree, flexibility or vagueness, fell within the exclusion. On this view, requirements to embed adequacy criteria in minimum wage-setting systems, rights to effective enforcement of whatever minimum wage a worker has and the promotion of collective bargaining were all excluded.Footnote 61 Even the lightest of touches to promote collective bargaining via an action plan fell outside competence. This reading stemmed from a failure to appreciate the social policy title’s constitutional raison d’être: to establish a space for Social Europe action that articulates levels and actors of labour regulation and pursues fundamental social rights and upward convergence.Footnote 62 The Court’s reading of direct interference reflects a different theory of Social Europe structured around three components: preserving regulatory space to realise Social Europe objectives; respecting collective autonomy and Member State diversity; and protecting and promoting collective bargaining.
A. Regulatory space to realise Social Europe objectives
The Court set out a series of EU social objectives that define its understanding of the competence exclusions: upward social convergence for workers and social cohesion; fair, inclusive and sustainable growth;Footnote 63 and improved living and working conditions.Footnote 64 Adequate minimum wages are presented as an important means to these ends, with collective bargaining playing a central role in securing adequacy.Footnote 65 This reading draws on the AMWD’s Preamble and text, as well as Articles 151 and 152 TFEU on the objectives of EU social policy and the promotion of social partner action. Above all, these sources make clear that the competence exclusions must be applied so as not to compromise EU social policy competences and the social dimension of EU integration.
B. Social partner prerogatives, respect of social partner autonomy, and articulating diversity
The Court strikingly characterised social partner prerogatives as a common, if not the sole, rationale of all four competence exclusions in Article 153(5) TFEU: pay, association, strike and lockout. This departs from earlier case-law, which justified the pay exclusion by reference to national social partners’ contractual freedom and Member State competence.Footnote 66 Paragraph 107 is pivotal here, and was reinforced throughout the judgement. Having linked the exclusions to social partner prerogatives, the Court relied on Article 152 TFEU to affirm that promoting the role of social partners and respecting their autonomy is an objective of the entire social policy title, from which it then inferred that safeguarding national social partner autonomy is a core function of the pay and association exclusions.Footnote 67
These are big steps for Social Europe. First, the new attention to Article 152, its transversal application across the social policy title and the insistence on social partner prerogatives open new ways of imagining EU social policy.Footnote 68 Second, social partner autonomy emerges as a central tenet of Social Europe, repeatedly returned to in applying the payFootnote 69 and association exclusions.Footnote 70 Third, in this respect, the judgement opens at least one perspective for moving beyond earlier case-law that had defined social partner autonomy narrowly as freedom of action for and from interference during negotiations.Footnote 71 In the March 2026 decision AESTE, for example, a tenderer challenged as incompatible with Article 28 EUCFR a contract award criterion that linked public procurement and collective bargaining. That criterion considered positively what tenderers proposed to pay above the wages set in a sectoral collective agreement and the subsequent collective negotiation of the detailed allocation of that higher pay with the representatives of the staff assigned to the contract. The Court found that such a criterion was not precluded by Article 28 EUCFR as it did not interfere with collective autonomy, but rather encouraged the right of collective bargaining. In other words, EU law can provide a framework for national law to promote wage bargaining – a finding explicitly motivated by ‘the EU acquis’ in the area of collective bargaining and ‘the first paragraph of Article 152 TFEU’.Footnote 72 Fourth, the Court distinguished Member State diversity from social partner autonomy in its assessment of the AMWD, suggesting room for regulatory pluralism within EU social policy.Footnote 73 Finally, respect for diversity extends to domestic choices in labour regulation, with the AMWD’s design respecting these diversities by preserving national choice for or against statutory minimum wages.Footnote 74
C. Protecting and promoting collective bargaining
The key to protecting and promoting collective bargaining was, as analysed earlier, to preserve an EU regulatory space for collective bargaining at national level through the Court’s carefully narrowly sculpted understanding of the right of association.Footnote 75 It relied on Articles 153(1)(f) and 156 TFEU to confirm that the EU may regulate to promote collective bargaining,Footnote 76 and clarified that, where working conditions overlap with collective bargaining, such promotion may occur under the working conditions’ competence.Footnote 77 Read with Article 152 TFEU, there is even an argument that the EU legislator should do so as part of promoting social partner action. By contrast, the Court did not rely on Articles 154–5 TFEU, despite the fact that those Articles embed supranational collective bargaining in primary law.Footnote 78
Taken together, these three elements comprise the judgement’s theory of Social Europe, which directs the application of the direct interference test. The test must therefore be applied in a way that retains space to pursue Social Europe’s objectives, respects social partner autonomy and diversity, and protects and promotes collective bargaining. While uncertainty over the boundaries of EU competence remains, this theory provides guidance for future legislation and collective agreements. Applied to unpaid traineeships, for example, it suggests that EU law should retain at least a procedural path to combat this practice that turns the absence of pay into a source of inequality and precarity – while it must respect diversity and collective bargaining in the process.
5. Three consequences of the Court’s theory of Social Europe: fundamental rights in Europe, the social policy title and collective labour rights in EU law
The Court’s theory of Social Europe can have consequences for the social dimension of EU integration beyond competence exclusions. This section examines how the Court’s approach may enable regulators, social partners, judges or scholars to plan and predict the future of Social Europe. It focuses on three areas in which this approach may recalibrate Social Europe: European fundamental rights; the reconfiguration of the social policy title; and collective labour rights more broadly in EU law.
A. Fundamental rights in Europe
The judgement’s theory of Social Europe refines Europe’s fundamental rights architecture, in particular the relationship between EU law and collective labour rights under the ECHR.Footnote 79 Fundamental rights in EU law acted as a guide and additional support for the Court’s distinction between the rights to associate and collective bargaining. Articles 12 and 28 EUCFR were used to differentiate these two rights,Footnote 80 a distinction confirmed by the 1989 Community Charter and the ESC as a non-EU source.Footnote 81 The Court constructed their relationship so ‘the right of association is a prerequisite for the exercise of the right to collective bargaining’ without that meaning the latter is an inherent element of the former.Footnote 82
This strengthening of EU labour rights, however, complicates the relationship between EU rights protection and the ECHR, which perhaps explains the latter’s notable absence from the judgement.Footnote 83 While Article 12 EUCFR and Article 11 ECHR share almost identical wording on the freedom of association,Footnote 84 the European Court of Human Rights (ECtHR) has, famously – albeit relatively recently and with certain caveats – interpreted its Article 11 to encompass not only freedom of association, but also collective bargainingFootnote 85 and the right to strike.Footnote 86 As the Explanatory Note to Article 28 EUCFR itself acknowledges: ‘The right of collective action was recognised by the [ECtHR] as one of the elements of trade union rights laid down by Article 11 [ECHR].
This judgement implicitly clarifies when rights ‘correspond’ under both systems so their meaning and scope should be the same under Article 52(3) EUCFR.Footnote 87 Close correspondence in wording is insufficient, and correspondence depends instead on the overall design of both instruments and the EUCFR’s embedding within a much more extensive EU legal framework. Whereas the ECHR relies on a single provision to develop collective labour rights, EU law separately protects association and collective bargaining and action.Footnote 88 This distinct treatment of the rights to associate, bargain and strike could now become a wider feature of EU law.
The right to strike, moreover, is also excluded under Article 153(5) TFEU, but it remains uncertain how it will interact with association and the promotion of collective bargaining – for example, where a Member State addresses the right to strike as an ‘enabling condition’ for collective bargaining under Article 4(2) AMWD. In line with the Court’s theory of Social Europe, however, the strike exclusion should be treated like the pay and association exclusions. One of its rationales is to protect social partner prerogatives and, while EU legislative action under the social policy title should not directly interfere with the right to strike, it may affect or link to it. The direct interference test must not be applied in a way that compromises the social dimension of EU integration.
B. Reconfiguring the social policy title
The Court’s theory also has the potential to reconfigure the social policy title in terms of regulatory design, the promotion of collective bargaining and the articulation of diversity. Here, the judgement opens space to reflect on the working methods of Social Europe. The case itself illustrates why such a reflection matters due to the considerable diversity of the domestic labour regulation systems it involved: prompted by two Nordic governments aligned with their social partners,Footnote 89 seven Western and Southern European States supported the Council and/or Parliament,Footnote 90 whereas Central and Eastern Europe were absent from the case. Three reconfigurations are discussed here: the normative direction of EU social policy; regulatory space at the boundaries of competence; and the AMWD’s procedural model for navigating competence exclusions.
The first concerns the normative direction of EU social policy legislation, in particular its commitment to upward social convergence. Since minimum harmonisation was introduced for health and safety with the Single European Act and extended to all social policy competences in the Treaty of Amsterdam, there has been a risk of EU labour and social law being confined to low ambition. Although the Court had clarified in the 1990s that EU Directives could go beyond the lowest common denominator,Footnote 91 this remains wishful thinking without political and judicial willingness. Over the years, EU Directives balanced flexibilisation and worker protection,Footnote 92 the EU regulator became reluctant to act in the social fieldFootnote 93 and the Court itself seemed to favour regulatory competition instead of worker protection.Footnote 94 The AMWD judgement, however, affirms that minimum harmonisation under the social policy title should be oriented towards upward social convergence, understood as improved living and working conditions.Footnote 95
The second reconfiguration concerns regulatory space at the boundaries of social policy competence. Based on its theory, the Court confirmed that EU legislation may link to pay and promote collective bargaining. While Article 153(1)(f) TFEU offers a route to regulate representation, collective defence or codetermination, its unanimity requirement limits its practical relevance. By contrast, treating Article 152 TFEU as an objective of the entire social policy title allows the working conditions competence to support collective bargaining. The judgement is the first to clearly endorse such an overlap for collective bargaining within Article 153 TFEU.Footnote 96 This overlap and its eventual extension beyond the working conditions competenceFootnote 97 will need further clarification, particularly where it also implicates the right to strike.
The third reconfiguration lies in how the judgement articulates diversity when navigating competence boundaries. Earlier approaches – from knowledge approximation,Footnote 98 to policy coordination,Footnote 99 explicitly possible derogations from EU labour law,Footnote 100 or entrusting domestic social partners with its transpositionFootnote 101 – often sought diversity, but struggled to accommodate it. The AMWD develops a distinct procedural model for diversity at the boundaries of EU competence: it justifies EU-set targets as aspirational aims, prioritises procedural over substantive obligations, and allows individual information and redress rights functional to wage bargaining. EU legislation thus provides procedural guidance while most substantive choices remain with Member States and domestic social partners. This approach also differs from earlier procedural instruments, such as the Collective Redundancies Directive 98/59/EC, which still imposed some substantive requirements.Footnote 102 Proceduralisation here opens regulatory space, and could be understood as a process of polity-building by accommodating diversity where EU competence is weak.Footnote 103
Proceduralisation, however, also transforms the normative force of EU social policy. In this sense, it can be prone to political (mis)understandings among Member States and social partners. Denmark’s annulment action reflected fears that the 80 per cent bargaining coverage threshold could indirectly compel statutory minimum wages, and therefore challenge the Danish wage bargaining model despite the Directive’s procedural framing.Footnote 104 In Germany, the AMWD’s indicative 60 per cent gross median-wage reference has been rendered an objective of the rules of procedure of its bipartite Mindestlohnkommission, which recommends adjustments of the statutory minimum wage.Footnote 105 The 2025 coalition agreement between conservatives and social democrats now backs up this objective politically.Footnote 106 However, extending proceduralisation into areas of strong EU competence on social policy, beyond the areas affected by competence exclusions, could unduly constrain the Union’s capacity to pursue the Social Europe objectives identified by the Court.
C. Might the judgement have broader implications for collective labour rights in EU law?
Beyond fundamental rights and a reconfigured social policy title, the judgement’s theory of Social Europe might, or might not, reshape more broadly the protection and promotion of collective labour rights in EU law. This section examines four areas: the role of EU-level social partners under the social policy title; conflicts between fundamental rights in the work relation; intersections of collective labour rights and fundamental freedoms; and the voice of social partners beyond the social policy title. We think this judgement and its theory still do not provide secure ground to conclude that the Court has abandoned a market-oriented approach to EU law or embraced an integration model centred on collective bargaining.
In elaborating its theory, the Court avoided reference to Articles 154–155 TFEU, despite these provisions constituting the Treaty mechanism that embeds collective bargaining via European social dialogue. This omission probably reflects the Grand Chamber’s decision in EPSU. It starkly contrasts with Albany, where the Court limited the reach of EU competition law on collective agreements by relying on a very similar set of EU social sources to those in the AMWD judgement, while explicitly invoking the European social dialogue procedure.Footnote 107 The omission suggests that the Court’s insistence on collective bargaining applies differently at a national than at the European level. In EPSU, the Court granted the Commission broad discretion over whether to submit European collective agreements to the Council for translation into EU law, in order to protect the Commission’s legislative monopoly under Article 17 TEU, notwithstanding Articles 154–5 TFEU’s special legislative procedure.Footnote 108 Scholars widely criticised this decision as restricting the autonomous bargaining capacity of European social partners, whose agreements remain dependent on the Commission’s political priorities.Footnote 109 While the AMWD judgement recognises social partner prerogatives in work regulation,Footnote 110 its silence on Articles 154–5 TFEU offers little indication of a willingness to revisit this case law or to impose a stronger duty on EU institutions to support European social dialogue.Footnote 111
A second uncertainty relates to conflicts between fundamental rights in the work relation, notably the intersections between collective bargaining and non-discrimination (Article 21 EUCFR), particularly on grounds of age,Footnote 112 and the freedom to conduct a business (Article 16 EUCFR).Footnote 113 On age discrimination, the Court has relied on the right to collective bargaining to recognise that social partner organisations, like Member States, enjoy broad discretion in employment policy, including age-based distinctions.Footnote 114 Yet it has declined to apply a distinct standard of justification to measures adopted by collective agreement, instead treating collective bargaining and non-discrimination as operating at different stages: Article 28 EUCFR protects the bargaining process, while other fundamental rights govern its outcomes.Footnote 115 The AMWD judgement is unlikely to revise this two-stage approach, but it may affect how age discrimination interacts with international standards on fair remuneration. The Court has previously accepted (youth) sub-minimum wages as a legitimate employment policy tool, whereas the ESC requires minimum adequacy standards.Footnote 116 Article 6 AMWD now subjects statutory minimum wage variations to non-discrimination and proportionality. Its orientation towards pay adequacy, combined with the absence of age-based sub-minimum wages from the Directive’s list of variations and its call to avoid them,Footnote 117 provides room to argue for adjusting age discrimination case law and the Commission’s infringement practice through adequacy benchmarks.Footnote 118 The argument is not that the AMWD prohibits age-based sub-minimum wages directly or that an adequacy standard can be derived from it,Footnote 119 but that its Article 6 provides normative inspiration to recalibrate the prohibition of age discrimination, an area much more firmly grounded in EU competence than pay.Footnote 120 In other words, this provision may allow the Court’s currently very permissive stance on age-based sub-minimum wages under age discrimination case-law to be questioned by drawing on minimum adequacy benchmarks, including from instruments such as the ESC.
Where the right to collective bargaining intersects with the acquis and fundamental rights, the Court’s theory might also support a more social and fundamental-rights-oriented interpretation of the existing EU acquis. Nonetheless, such a shift would require a significant judicial reorientation. In Werhof, for example, the Court adopted a static interpretation of collective agreements following a transfer of undertakings under Directive 77/187/EEC,Footnote 121 releasing the transferee employer, unwilling to join the employer organisation, from updates of these agreements.Footnote 122 A dynamic interpretation not releasing the employer could have strengthened participation in bargaining and a more worker protective understanding. Subsequently, Alemo-Herron reframed Werhof as protecting the transferee’s right not to join an association,Footnote 123 now considered an inherent element of association excluded from EU competence.Footnote 124 In Alemo-Herron, the Court further conceptualised dynamic obligations as unduly limiting the essence of Article 16 EUCFR where a transferee employer could not participate in collective bargaining, as this would impair their ability to assert interests in a contractual process and negotiate working conditions.Footnote 125 This limitation is likely to endure, since the essence of Charter rights cannot be interfered with.Footnote 126 Although AGET Iraklis clarified that national measures that frame, rather than entirely exclude, business choices relevant to collective bargaining do not restrict Article 16’s essence, they remain subject to proportionality review.Footnote 127
How might the Court’s theory of Social Europe in the AMWD judgement alter the reasoning and assessment on collective bargaining and the freedom to conduct a business? On the one hand, the Court insisted in its AMWD judgement that the social acquis, at issue in the above-cited cases, should be read to preserve a regulatory space to realise social objectives, respect social partner autonomy and protect and promote collective bargaining, and that association can be respected while still promoting collective bargaining. This is certainly important ammunition for those arguing that these cases misunderstood and under-protected collective bargaining while over-extending the freedom to conduct a business. Yet, the AMWD judgement does not eliminate the possibility that when social rights – including collective bargaining – confront other fundamental rights in interpretations already established by the Court, the business freedoms are seen to appropriately balance and limit those social rights.
From a third perspective, the judgement engages the relationship between collective labour rights and the fundamental freedoms, most clearly illustrated by the decisions in Viking and Laval.Footnote 128 Both cases concerned collective bargaining and ensuing industrial conflict over wage determination in Nordic countries, and have crucially motivated the contestation of the AMWD. The legal advice sought by Nordic social partner organisations during the discussions on the AMWD makes this fear quite clear: in Denmark, the AMWD was considered to ‘make wage setting and the design of the collective bargaining system into an EU matter, and thus also a matter for the CJEU’.Footnote 129 In Sweden, the Directive risked ‘key issues on wage formation [to] be subject to review by the European Court of Justice’ creating ‘unacceptable legal uncertainty for … the collective agreement model’.Footnote 130 Both Viking and Laval acknowledged that EU integration pursues both economic and social objectives, but they treated social policy primarily as a counterweight to the fundamental freedoms.Footnote 131 Collective action functional to collective bargaining was characterised as a restriction on the freedoms of establishment and services and subjected to proportionality review,Footnote 132 which then constrained the scope of domestic collective bargaining and action.Footnote 133 Laval, in particular, suggested a preference for public regulation over social partner action under EU legislation – in this case, the Posted Workers Directive 96/71/EC.Footnote 134
The AMWD, its procedural model and its confirmation by the Court reflect greater awareness of the need to accommodate diversity in national industrial relations systems. Therefore, the AMWD as operationalised is unlikely to submit wage-setting or the design of domestic collective bargaining systems to the CJEU’s review, contrary to the fears of the above-quoted social partner organisations from Denmark and Sweden. The Directive is designed to support domestic collective bargaining. Nonetheless, rather than genuinely challenging the imbalanced relationship between collective labour rights and fundamental freedoms, the AMWD judgement is more likely to coexist with it. The Court affirmed the promotion of collective bargaining, but situated this objective squarely within the social policy title. Viking and Laval demonstrate why the promotion of collective bargaining and social partner action would need to be strengthened beyond the social policy title as an objective of the EU legal order as a whole. Otherwise, there is little reason to expect a broader rebalancing between collective labour rights and the fundamental freedoms in future conflicts, and a risk of review of domestic collective bargaining systems would persist under EU free movement law. Put differently, the AMWD judgement does not fundamentally reconfigure the structural imbalances between labour and capital that have underpinned EU law in the past.
More promising short-term prospects arise from the judgement’s potential impact on the voice of social partners beyond the social policy title. While their involvement is rather established within that title,Footnote 135 they have often struggled to participate meaningfully in other areas of EU governance, as illustrated by their initial marginalisation under the European SemesterFootnote 136 or, earlier, unsuccessful attempts to involve them in EU immigration or environmental policy.Footnote 137 Yet the Court’s repeated emphasis on upward social convergence, decent living and working conditions, or fair, inclusive and sustainable growth underscores the necessity of closer cooperation with social partners across EU governance.
In sum, the judgement’s theory of Social Europe translates into tangible consequences for the social dimension of EU integration. It revisits the European landscape of fundamental rights, reconfigures the social policy title and exposes the limits of embedding collective labour rights across EU law. This section thus shows how the Court’s theory enables a more precise mapping of both the future trajectory of Social Europe and its persistent uncertainties.
6. Conclusion: a judgement, many resources to mine
The judgement confirming the AMWD is highly significant for labour law and EU law more generally. The decision is much more than a validity action on legal bases as it engages profoundly with debates on the structure, agency and methods shaping, and potentially constraining, EU integration – particularly in the social field. Through its theory of Social Europe, the judgement develops space for realising Social Europe’s objectives, respecting social partner autonomy and Member State diversity, and protecting and promoting collective bargaining. This theory clarifies the constitutional position and working methods of the social policy title, allows its developments and limits to be evaluated and enables anticipation of how and why Social Europe initiatives may succeed or fail. More than the endpoint of an annulment challenge, the judgement and its theory are resources whose advances and limits are to be mined for the future.
Open access
