Sweden joins Denmark in fight against minimum wage directive

Legal - January 25, 2023
European Court of Justice

Sweden’s government will support Denmark in its contest to overturn the directive on minimum wages in the EU court. The directive clashes with established national labor models in the two Northern member states.

The new EU-directive was accepted last fall, but both Denmark and Sweden expressed extensive objections against the rules on minimum wages. Leaving it to political bodies to determine the level of minimum wages goes against the century-old traditions of how labor markets work in those countries.

Wages decides by Labor market actors

Instead of politically decided by laws, wages in Denmark and Sweden are negotiated between the parties in the labor market, trade unions and employers.

The two member states want to maintain their own established model that creates fewer conflicts in the labor market then in other countries.

Although the EU has responded that Denmark will not be forced to incorporate the minimum wage into its laws, as the EU intends to respect the Danish model, the Danish government is still resolute about its intention to nullify the directive.

The Danish Minister for employment notes that his country isn’t forced to adopt the new directive, but states it is a matter of legislation without previous precedent, and that makes it to a matter of principal.

“We insist that wages must be set in Denmark and not the EU”, Ane Halsboe-Jorgensen declared in the statement that justified why the government is turning to the European Court of Justice.

Sweden support Denmark

After the Danish position has been clarified, the Swedish government has decided to back Denmark in the lawsuit.

A decisive factor for this development of events is that the two biggest parties in the Swedish parliament – the Social Democrats (S&D) and the Sweden Democrats (ECR) – have demanded a joint action with Denmark on the question of Minimum wages.

It is the first time since the election the two non-governmental parties used their majority in the parliament, Riksdag, to together convince the center-right government (EPP/Renew) how to act.

Nether Sweden Democrats or Social Democrats could accept that that the government lies flat for the EU when Brussels try to smash the Swedish model with collective agreements between the labor market partners.

Pro-EU voices lost

When it became clear that there was a majority in the Riksdag to protect the Swedish model, the Liberal party leader (Renew) and Labor Market Minister Johan Pehrson stated that the game was changed and that the government stand behind Denmark.

“It is in Sweden’s interest as a member state to very clearly defend the Swedish model by joining Denmark’s lawsuit”, announces the Deputy Labor Market Minister.

The government’s previous plan was to investigate how the directive could best be implemented in Swedish legislation without entering the fray.

The chairman of the parliaments labor market committee, Magnus Persson (SD), told newsmedia that he had made it clear to the government that the Sweden Democrats was ready to support an initiative from Social Democrats to overrule the government. After long discussions, the government changed its mind and decided to side with Denmark in the EU court.

The labor market policies isn’t included in the agreement between the government and the Sweden Democrats that created the possibility for the center-right government to take office in October last year.

Swedish model worth protecting

The Social Democrats’ party secretary Tobias Baudin says that the Swedish wage model is worth preserving. He points out that the parties on the labor market, both the trade unions and business representatives, demanded that the government act.

“The Swedish model has benefited wage earners, companies and competitiveness. We do not want the EU and Brussels to set the wages”, the top Social Democrat stated.

The date on which the lawsuit about the minimum wages directive will be taken up by the European Court of Justice has yet to be set.