Sweden supports Danish annulment action of the EU Minimum Wage Directive

Considering the Swedish Government’s commitment to preserve the Swedish model, wherein wages are collectively bargained by the parties on the labour market, the Government has taken the decision to align with Denmark’s efforts in seeking the annulment of the Minimum Wage Directive.

The Directive of the European Parliament and of the Council on minimum wages in the EU (the “Minimum Wage Directive”) was adopted on 19 October 2022. Sweden’s position, both from politicians and the parties of the labour market, has been in opposition of the adoption of the Minimum Wage Directive. The opposition arises from the fact that the Swedish labour market model, which stands strong domestically and internationally, relies on wage levels determined through agreements between the parties of the labour market, rather than pre-determined statutory minimum wages. Consequently, there is a concern that this form of EU regulation could undermine the Swedish labour market model in the long run.

In January 2023, Denmark initiated legal proceedings by submitting an annulment action of the Minimum Wage Directive to the Court of Justice of the European Union, asserting its incompatibility with the treaties of the EU. The outcome of Sweden’s request to intervene in the Danish annulment action case is currently pending before the court. If granted, Sweden will actively participate in the judicial process.