10.6092/issn.1561-8048/11879
The contribution aims at assessing the Commission’s recent Proposal on minimum wages in light of the treaties. In particular, it focuses on the choice of the legal basis and most notably the exclusion of pay resulting from Art. 153(5) TFEU.
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The Minimum Wages Directive Proposal and the External Limits of Art. 153 TFEU
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The Minimum Wages Directive Proposal and the External Limits of Art. 153 TFEU
https://illej.unibo.it/article/download/11879/11860
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The Minimum Wages Directive Proposal and the External Limits of                     Italian Labour Law e-Journal
Art. 153 TFEU                                                                              Issue 2, Vol. 13 (2020)
Giacomo Di Federico                                                                              ISSN 1561-8048
giacomo.difederico@unibo.it                                       https://doi.org/10.6092/issn.1561-8048/11879




       The Minimum Wages Directive Proposal and the
             External Limits of Art. 153 TFEU
                                       Giacomo Di Federico



 1. Preliminary remarks. 2. The principle of conferral and the risk of fuites en avant. 3. Setting
 the yardsticks: the aim and content of the Proposal. 4. Assessing the external limits of Art.
 153 in relation to pay: the case law of the Court of Justice. 5. Final remarks.


                                                     Abstract

     The contribution aims at assessing the Commission’s recent Proposal on minimum wages in
     light of the treaties. In particular, it focuses on the choice of the legal basis and most notably the
     exclusion of pay resulting from Art. 153(5) TFEU.

     Keyword: Minimum wages; EU social policy; Court of Justice; Principle of conferral; Pay




 1. Preliminary remarks.

    From the perspective of an EU lawyer, the Commission’s recent Proposal on minimum
 wages raises a number of topical issues.1 This brief contribution focuses on one in particular:
 the choice of the legal basis and most notably the exclusion of pay resulting from Art. 153(5)
 TFEU, which in the words of Robert Schütze, “represents an external limit to all Union
 legislation adopted on the basis of Art. 153 TFEU”.2


 2. The principle of conferral and the risk of fuites en avant.

    As is well-known, pursuant to the principle of conferral the EU can act only within the
 limits of the competences conferred upon it by the Member States in the Treaties to attain

 
   Associate Professor of European Union Law, Department of Legal Studies, University of Bologna. This article
 has been submitted to a double-blind peer review process.
 1 Proposal for a Directive of the European Parliament and of the Council on adequate minimum wages in the

 European Union, of 28 October 2020, COM(2020) 682 final.
 2 Schütze R., European Union Law, Cambridge University Press, Cambridge, 2018, 798.
  Giacomo Di Federico                                                                  Italian Labour Law e-Journal
                                                                                              Issue 2, Vol. 13 (2020)
                                                                                              Section: Miscellaneous




the objectives set out therein. When deciding, directly or indirectly, on the validity of EU
measures, the ECJ can be asked to ascertain the correctness of the legal basis chosen for the
adoption thereof.
    Unsurprisingly, when assessing the scope of a given provision enabling the EU legislator
to act, the ECJ has followed a substantive and functional approach. On the one side, it has
looked at the actual goal of the pertinent measures; on the other hand, it has consistently
recognized that the EU political institutions enjoy a wide discretion in order to attain the
general and specific objectives set in the treaties. In this sense, suffice it here to mention the
Tobacco cases3 concerning the use of Art. 114 TFEU to promote the Internal Market, which
effectively illustrate the risk of “unpredictable and uncontrollable competence creep”.4
    In relation to social policy, the danger of legislative fuites en avant is obviously more limited.
Nonetheless, it is also true that – as the Court, in plenary formation, reminds us in Wightman5
– “the interpretation of a provision of EU law requires that account be taken not only of its
wording and the objectives it pursues, but also of its context and the provisions of EU law
as a whole”.6 In this regard, if it is true that the proposed Directive is firmly based on Articles
153(1) (b) and 153(2) TFEU – supporting and complementing competences, no
harmonization possible – it is also a fact that, as stated by the President of the Commission
Ursula Von der Leyen in her State of the Union speech,7 the current context calls for
immediate action: pursuant to Principle No 6 of the European Pillar of Social Rights,
adequate minimum wages are a priority; Covid-19 has hit hard on low-wage workers such as
retail and tourism and on the disadvantaged groups of the population; the rate of persons at
risk of poverty is alarming and shows no sign of diminishing.


3. Setting the yardsticks: the aim and content of the Proposal.

   The proposed Directive essentially aims to ensure that the workers in the Union are
protected by adequate minimum wages allowing for a decent living wherever they work. It is
also capable of contributing to a number of other relevant fields of EU action: promotion
of the well-being of its peoples, development of a highly competitive social market economy
(Art. 3 TFEU) and improvement of living and working conditions (Art. 151 TFEU), but also

3 See Judgment of the Court of 4 May 2016, Case 547/14, Philip Morris Brands SARL and Others v. Secretary of State
for Health, ECLI:EU:C:2016:325; Judgment of the Court of 4 May 2016, Case C-477/14, Pillbox 38 v. Secretary of
State for Health, ECLI:EU:C:2016:324; Judgment of the Court of 12 December 2006, Case C-380/03, Germany
v. Parliament and Council (Tobacco Advertising II), ECLI:EU:C:2006:772; Judgment of the Court of 14 December
2004, Case C-210/03, Swedish Match, ECLI:EU:C:2004:802; Judgment of the Court of 10 December 2002, Case
491/01, British American Tobacco, ECLI:EU:C:2002:74; Judgment of the Court of 5 October 2000, Case C-
376/98, Germany v. Parliament and Council (Tobacco Advertising), ECLI:EU:C:2000:544.
4 Prechal S., De Vries S., Van Eijken H., The Principle of Attributed Powers and the 'Scope of EU Law', in Besselink

L., Pennings F., Prechal S. (eds.), The Eclipse of Legality, Wolters Kluwer International, Alphen aan den Rijn,
2011, 213 ff.
5 Judgment of the Court of 10 December 2018, Case C-621/18, Wightman, ECLI:EU:C:2018:999.
6 Ibidem., para. 47.
7 See State of the Union Address by President von der Leyen at the European Parliament Plenary, Brussels, 16

September 2020, SPEECH/20/1655:
https://ec.europa.eu/commission/presscorner/detail/ov/SPEECH_20_1655.

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    Giacomo Di Federico                                                                 Italian Labour Law e-Journal
                                                                                               Issue 2, Vol. 13 (2020)
                                                                                               Section: Miscellaneous




the creation of a level playing field in the Single Market; enhancement of gender equality and
workers’ right to fair and just working conditions (Art. 31 of the Charter). As already
mentioned, moreover, the proposed Directive contributes to implementing the European
Pillar of Social Rights.
    The Proposal is also coherent with the European Semester priorities and the adoption of
the Directive would in principle contribute to appease concerns expressed in relation to the
fact that country specific recommendations are not reviewable under the EU Charter of
Fundamental Rights. While the latter are not binding, they can still impact on social dialogue
and pay, thereby potentially circumventing the limitations included in Art. 153 TFEU.8
    The Proposal does not aim to harmonize national legislation on minimum wages, nor
does it attempt to impose a one-size-fits-all solution. Rather, it establishes, a governance
framework to improve the adequacy of minimum wages and to increase the access of workers
to minimum wage protection regardless of whether the national system has opted for
statutory minimum wage or collective bargaining, as well as it fosters compliance and
effective enforcement. Nothing in the text indicates that Member States will lose control
over matters (directly) related to pay.


4. Assessing the external limits of Art. 153 in relation to pay: the case law of the Court
of Justice.

   Albeit not fully satisfactory, the developments following the controversial Laval quartet9
are obviously a good term of comparison when assessing the compatibility of the proposal
with the treaties. Indeed, had the Proposal for a Regulation on the exercise of the right to
take collective action,10 advanced by the Commission in 2012, passed the national
parliaments’ scrutiny (although the latter is formally limited to subsidiarity and
proportionality concerns), it remains to be seen whether it would have passed a possible
judicial review of the kind recently solicited by Hungary vis à vis the Posted Workers’
Directive.
   In the view of the Hungarian government, Art. 153 TFEU represents the correct legal
basis for the adoption of Directive 2018/957.11 However, insofar as it prescribes that the
remuneration of workers must conform to the legislation in force in the host Member State,
that directive infringes Art. 153(5) TFEU, which would explain why the EU Legislator turned
to Articles 53(1) and 62 TFEU, allowing for the approximation of laws in relation to the

8 See Dawson M., de Witte F., Constitutional balance in the EU after the Euro-Crisis, in Modern Law Review, 2013, 817
ff.
9 Judgment of the Court of 19 June 2008, Case C-319/06, Commission v. Luxembourg, ECLI:EU:C:2008:350;

Judgment of the Court of 3 April 2008, Case C-346/06, Rüffert, ECLI:EU:C:2008:189; Judgment of the Court
of 18 December 2007, Case C-341/05, Laval un Partneri, ECLI:EU:C:2007:809; Judgment of the Court of 11
December 2007, Case C-438/05, Viking, ECLI:EU:C:2007:772.
10 Proposal for a Council Regulation on the exercise of the right to take collective action within the context of

the freedom of establishment and the freedom to provide services of 21 March 2012, COM(2012) 130 final.
11 Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive

96/71/EC concerning the posting of workers in the framework of the provision of services.

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     Giacomo Di Federico                                                                Italian Labour Law e-Journal
                                                                                               Issue 2, Vol. 13 (2020)
                                                                                               Section: Miscellaneous




freedom to provide services. The case is still pending but in his Opinion of 28 May 2020,
AG Campos Sánchez-Bordona,12 discarded any misuse of power. The Member States’
exclusive competence in relation to pay, which is openly recognized in recital 17 of that
directive – as it is in the Proposal –, cannot serve to stop the competent institutions from
carrying out their tasks under the treaties. There are plenty of good reasons to believe that
the ECJ will follow the Advocate General in this instance. Indeed, the EU judges have
consistently held that Art. 153(5) TFEU must be interpreted strictly so as not to affect unduly
the scope of paragraphs 1 to 4, nor to call into question the aims pursued by Art. 152 TFEU.
This is why it cannot be construed in such a way as to include any question involving “any
sort of link with pay”.13
    It follows from Impact14 and Del Cerro Alonso,15 that Art. 153(5) TFEU must be interpreted
as covering measures – such as the equivalence of all or some of the constituent parts of pay
and/or the level of pay in the Member States, or the setting of a minimum guaranteed
Community wage – which amount to direct interference by EU law in the determination of
pay within the Union. Hence, the exception relating to “pay” set out in Art. 153(5) TFEU
cannot preclude the interpretation of the framework agreement on fixed-term work as
imposing on the Member States the obligation to ensure that fixed-term workers are also
guaranteed the application of the principle of non-discrimination in relation to pay.16
    Similarly, in Specht & others,17 where the referring court wondered about the compatibility
of Directive 2000/7818 with Art. 153(5) TFEU insofar as the expression “employment and
working conditions” covers, inter alia, dismissals and pay, the ECJ reached the conclusion
that “[I]n the case of the German civil service, the amount of pay for each grade and step is
determined by the competent national courts and the European Union has no competence
in that regard. On the other hand, the national rules governing the methods of allocating
those grades and steps cannot be severed from the material scope of Directive 2000/78”.19




12 Opinion of Advocate General Campos Sánchez-Bordona delivered on 28 May 2020, Case C-620/18, Hungary
v. European Parliament and Council of European Union, ECLI:EU:C:2020:392, paras. 52, 58, 80-82, 89-100.
13 Ibidem, para. 93.
14 Judgment of the Court of 15 April 2008, Case C-268/06, Impact, ECLI:EU:C:2008:223, paras. 128-130.
15 Judgement of the Court of 13 September 2007, Case C-307/05, Del Cerro Alonso, ECLI: EU:C:2007:509,

paras. 31-48.
16 See Opinion of Advocate General Jääskinen delivered on 20 Novembre 2014, Case C-507-13, United Kingdom

of Great Britain and Northern Ireland v. European Parliament and Council of the European Union, ECLI:EU:C:2014:2394,
paras. 109-124; Opinion of Advocate General Trstenjak delivered on 16 June 2011, Case C-155/10, Williams
and Others v. British Airways plc, ECLI:EU:C:2011:403, paras. 58-67; Judgment of the Court of 10 June 2010,
Joined Cases C-395/08 and C-396/08, Istituto nazionale della previdenza sociale (INPS) contro Tiziana Bruno e Massimo
Pettini, ECLI:EU:C:2010:329, paras. 35-36.
17 Judgment of the Court of 19 June 2014, Joined Cases C-501/12 to C-506/12, C-540/12 and C-541/12, Specht

and Others, ECLI:EU:C:2014:2005, paras. 32-37.
18 Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment

in employment and occupation.
19 See nt. (17), para. 35.



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 Giacomo Di Federico                                                   Italian Labour Law e-Journal
                                                                              Issue 2, Vol. 13 (2020)
                                                                              Section: Miscellaneous




5. Final remarks.

   On the basis of these brief considerations on the Proposal and the case law of the Court
of Justice on the adoption of social policy measures it would seem that the Legislator is
actually competent to adopt the Directive. Looking back at the progress made in the social
realm since the introduction of Art. 118A by the Single European Act, considering, in
particular, the important amendments included in the Maastricht and Amsterdam Treaties
and the new framework resulting from the Lisbon Treaty, and keeping in mind the legal,
social and economic context, it is believed that a new systematic interpretation of the
provisions on social policy, read jointly with Articles 2, 3, 6 TEU and Art. 9 TFEU, should
now prevail. A reading which can accommodate proposals such the one the Commission
advances on minimum wages. This of course, does not detract from the fact that a more
exhaustive, comprehensive (and far reaching) assessment on the actual impact that the
Directive could have on pay would be more than advisable, perhaps not only in strictly legal
terms.




                                               Bibliography


Dawson M., de Witte F., Constitutional balance in the EU after the Euro-Crisis, in Modern Law
Review, 2013, 817;
Prechal S., De Vries S., Van Eijken H., The Principle of Attributed Powers and the 'Scope of EU
Law', in Besselink L., Pennings F., Prechal S. (eds.), The Eclipse of Legality, Wolters Kluwer
International, Alphen aan den Rijn, 2011, 213;
Schütze R., European Union Law, Cambridge University Press, Cambridge, 2018, 798.




Copyright © 2020 Giacomo Di Federico. This article is released under a Creative Commons
Attribution 4.0 International License




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