10.6092/issn.1561-8048/13372
The proposal for a minimum wage directive has met with partly harsh criticism in many countries. Lack of EU legal competence is one of the main points contested. The present German Ministry of Labour and Social Security is in favour of the proposal seeing it as a means to strengthen welfare and peace in Europe and to improve overall wage levels. The same is true of the majority of German trade unions, whereas employers’ associations are strictly against this piece of legislation. In legal literature strong opposition can be found as well as voices who support the proposal but recommend amendments with a view to the legal base problem.
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Notes on the proposal for a directive on adequate minimum wages: a German perspective  
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Notes on the proposal for a directive on adequate minimum wages:                      Italian Labour Law e-Journal
a German perspective                                                                         Issue 1, Vol. 14 (2021)
Maximilian Fuchs                                                                                   ISSN 1561-8048
maximilian-fuchs@arcor.de                                           https://doi.org/10.6092/issn.1561-8048/13372




        Notes on the proposal for a directive on adequate
            minimum wages: a German perspective
                                            Maximilian Fuchs

 1. Introduction. 2. Industrial relations in Germany. 3. The introduction of legal minimum
 wages in Germany. 3.1. Minimum wages through collective agreements universally
 applicable. 4. The legal minimum wage (2015). 4.1. The stages of the process towards the
 legal minimum wage. 4.2. The regulation of the legal minimum wage. 5. The proposal for a
 Directive from the angle of the German law. 5.1. The scope of application of the Directive.
 5.2. The promotion of collective bargaining on wage determination. 5.3. The chapter on
 statutory minimum wages. 5.4. Horizontal provisions. 6. The legal basis of the Directive. 7.
 Final remarks.

                                                      Abstract

     The proposal for a minimum wage directive has met with partly harsh criticism in many countries.
     Lack of EU legal competence is one of the main points contested. The present German Ministry
     of Labour and Social Security is in favour of the proposal seeing it as a means to strengthen
     welfare and peace in Europe and to improve overall wage levels. The same is true of the majority
     of German trade unions, whereas employers’ associations are strictly against this piece of
     legislation. In legal literature strong opposition can be found as well as voices who support the
     proposal but recommend amendments with a view to the legal base problem.

     Keywords: EU legal competence; Social partners; Collective bargaining on wage determination;
     Horizontal provisions.



 1. Introduction.
     Keyword: EU legal base; minimum wages-national competence; collective bargaining on wage
     determination; socialthe
      A few years ago,      partners;
                              German  horizontal
                                        Federal provisions
                                                 Ministry of Labour took the initiative to request the
 EU Commission for regulatory action at the European level to protect the minimum wage
 in the Member States. In a 2019 interview, the Federal Minister of Labour announced his
 willingness to promote regulatory action in this matter, which should be qualified as one of
 the focal points of the German EU Council Presidency in the second half of 2020. The gap
 between rich and poor countries of the Union has become more marked and this,
 consequently - as some scholars pointed out - risks undermining the project of a European
 Union. Only the strengthening of a social Europe could guarantee more certainty for welfare
 and peace. The idea is to set up a European minimum wage as a benchmark for wage levels
 in the individual countries and to encourage pressure, in Germany as well, that can positively


 
     Professor Emeritus. This article has been submitted to a double-blind peer review process.
    Maximilian Fuchs                                                              Italian Labour Law e-Journal
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influence the overall wage trends. It seems to me that the German minimum wage legislation
has had a significant impact on the draft directive. The article provides an analysis and
critique of this proposal, particularly form a German perspective.


2. Industrial relations in Germany.

    With the adoption of the Federal Constitution on 23 April 1949 (Grundgesetz), a
fundamental guarantee for the collective bargaining system was introduced in Article 9(3).
This constitutional provision states that the right to form associations to safeguard and
improve working and economic conditions is guaranteed to everyone and to every
occupation or profession. It constitutes the cornerstone of the collective bargaining system1
and marks a clear shift from the experience of the Nazi era, where an authoritarian system
interfered very intrusively in the autonomy of industrial relations. A month before Grundgesetz
came into force, the Collective Agreement Act was enacted, laying the foundations for the
freedom of employers’ associations and trade unions to conclude collective agreements
regulating the establishment, contents and termination of employment relationships.2 The
interplay between the Constitution and this Act gave rise to a system of industrial relations
which even nowadays established case law of the Constitutional Court
(Bundesverfassungsgericht) is committed to protect from State and private interferences. This
constitutional framework signals a clear preference for the autonomy of the social partners
in regulating working conditions. Intervention by the law plays a secondary role.


3. The introduction of legal minimum wages in Germany.
3.1. Minimum wages through collective agreements universally applicable.

a) The Posted Workers Act (1996).

   The history of the statutory minimum wage began in 1996 with the Posted Workers Act
(AEntG), which states that workers of the construction industries posted from EU member
states must be paid the minimum wage set up in the relevant collective agreement. With this
Act, the legislator aimed to fight wage dumping3 and prevent unfair competition within the
internal market, especially through the exploitation of the competitive advantage of
companies established in Member States with low wage standards. This is the background to
§ 1 AEntG, which states that the provisions of a universally applicable collective agreement
in the construction sector also apply to an employment relationship between an employer
seated abroad, and an employee performing work in the territorial scope of application of
the respective collective agreement.

1 Preis U., Arbeitsrecht. Kollektives Arbeitsrecht, Verlag Otto Schmidt, Köln, 2017, 22 ff.
2 Extensive information on this law can be found in Herschel W., Zur Entstehung des Tarifvertragsgesetzes, in
Zeitschrift für Arbeitsrecht, 1973, 184 ff.
3 Däubler W., Ein Antidumpinggesetz für die Bauwirtschaft, in Der Betrieb, 1995, 726.



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   The rights according to the Act on the Position of Trade Union Representatives at the
Workplace and the joint regulation legislation requires that the trade union has succeeded in
reaching a collective agreement. Such organizations are the “established trade unions” in
Sweden and given a privileged status in several aspects according to labour law. There is no
requirement of representativeness, independency, or the like.


b) The legal minimum wage debate in the financial crisis (2005-2009).

   At the beginning of the first decade of the new millennium, the German economy was in
the midst of a crisis, characterised by declining economic growth, a particularly high public
deficit, high unemployment, excessively high labour costs and a substantial deterioration in
Germany’s competitiveness in the international sphere. In this context, the 2002 Hartz
reforms were launched.4 Chancellor Schröder wanted to implement the so-called Agenda
2010.5 This initiative fuelled a heated debate on the necessity of a legal minimum wage in
view of a general wage cut. However, the idea of a legal minimum wage was not supported
by the Große Koalition, which was formed at the end of 2005 and, on the advice of several
economic experts, advocated the continuation of the minimum wage model based on the
mechanism of sectorial collective agreements declared to be universally applicable. In this
perspective, an amendment to the posting law was made in 2009.6 While the legislation which
has been in force since 1996 was only applicable to the construction sector, on this occasion,
a significant extension of the sectors involved was established. The construction sector is
compared to other service sectors where trade unions are weak due to the lack of an adequate
number of members and, consequently, the wage level is very low.
   The second novelty of the 2009 law is of a procedural nature. In view of the difficulties
involved in the procedure for declaring collective agreements “universally applicable”, the
Act on posting establishes that the extension of a collective agreement can be achieved by
governmental decree if there is a joint request from the organisations signing the collective
agreement at national level. The recent experience shows that this innovation has been of
great importance. Practically all minimum wages stipulated in collective agreements under
the AEntG scheme have been given universal applicability under this new scheme.7




4  Four laws were passed that implemented the ideas of the Hartz Commission report, on this see Moderne
Dienstleistungen am Arbeitsmarkt, 2002.
5 Agenda 2010 is described by Fuchs M., Il ruolo del diritto del lavoro e della sicurezza sociale nella crisi economica:

l’esperienza tedesca, in Giornale di Diritto del Lavoro e delle Relazioni Industriali, 2013, 741.
6 Löwisch M., Die neue Mindestlohngesetzgebung, in RArbeit, 2009, 215 ff..
7 For a list of these minimum wages and their level see:

https://www.zoll.de/DE/Fachthemen/Arbeit/Mindestarbeitsbedingungen/Mindestlohn-AEntG-
Lohnuntergrenze-AUeG/Branchen-Mindestlohn-Lohnuntergrenze/branchen-mindestlohn-
lohnuntergrenze.html

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4. The legal minimum wage (2015).
4.1. The stages of the process towards the legal minimum wage.

   In view of the growth of a labour market segment offering only very low wages, which
are increasingly being supplemented by unemployment benefit II (known as Hartz IV 8), a
consensus is beginning to form in the political debate that this situation must be remedied
and that a full-time job must guarantee the minimum which is necessary to meet living needs.
In implementation of the agreement on the formation of the Große Koalition, the law of 11
August 20149 introduced a legal minimum wage. This law consists of a package of laws
(Tarifautonomiestärkungsgesetz), one of which, the Mindestlohngesetz (MiLoG), regulates
the minimum wage.


4.2. The regulation of the legal minimum wage.10
a) The right to the minimum wage.

   Paragraph 1(1) of the MiLoG states that every employee11 is entitled to a wage that is at
least equal to the minimum wage. Clause 2 of this provision quantifies the amount of the
minimum wage at EUR 8.50 gross per working hour, as of 1 January 2015. Art. 4 of the
Commission’s proposal (see below c) establishes that the minimum wage can be adjusted by
a government decree. The minimum wage has been subject to changes in the past years and
as of 1 January 2021 it is set at €9.50 per hour. Clause 3 states that decrees issued under the
AEntG and the Arbeitnehmerüberlassungsgesetz (AÜG)12 (the Temporary Employment Act) take
precedence over MiLoG regulations if the minimum wages set by these decrees are not below
the legal minimum wage.


b) Documentation and information obligations.
   It goes without saying that in sectors where low wages have been paid up to now, various
loopholes are being attempted to circumvent the obligations imposed by the legislation. For


8 Fuchs M., Precariato e welfare. Il sistema tedesco, in Lagala C. (a cura di), Precariato e welfare in Europa, 2007, 181 ff.
9 Bundesgesetzblatt 2014 I, 1348.
10 In academic studies there are numerous contributions on MiLoG, see among others Jöris H., von Steinau-

Steinrück R., Der gesetzliche Mindestlohn, in BB, 2014, 2101 ff..; Spielberger M., Schilling A., Das Gesetz zur Regelung
eines allgemeinen Mindestlohns, in NJW, 2014, 2899. For an extensive discussion of the law, see the paper by Corti
M., La nuova legge sul salario minimo in Germania: declino o rinascita della contrattazione collettiva?, in Diritti Lavori Mercati,
2014, 111.
11 The definition can be found in § 22 MiLoG and the notion includes all workers. Trainees are excluded if the

apprenticeship is required by school or university regulations as part of education. Apprentices are also excluded
because they are included in a special Act. Workers who have not reached the age of 18 do not get the minimum
wage without having completed an apprenticeship. As for the long-term unemployed, the employer is exempted
from paying the minimum wage for the first six months of the employment relationship.
12 § 3a of the law requires a decree of the Ministry of Labour and Social Affairs to define minimum salaries on

the proposal of the social partners operating in the temporary employment sector on a national basis. There is
a decree of 1 April 2014 establishing minimum limits according to regional criteria.

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this reason, the legislator has prescribed precise documentation requirements to enable
authorities to monitor compliance with the MiLoG.13


c) Adjustments to the statutory minimum wage.


   A large part of the regulations contained in the MiLoG is dedicated to the procedure for
adjusting the statutory minimum wage. The law entrusts the task of adjustment to a specific
Commission (Mindestlohnkommission), which operates on a permanent basis. The so-called
MiLoG Commission consists of a chairman, six voting members and two members from
academia with advisory status. The Federal Government appoints the voting members from
employers’ and employees’ associations on the proposal of the confederations.14 In the same
way, the Federal Government appoints the chairman of the commission. The Commission
has to decide every two years.


d) Sanctions.
    Certainly, administrative sanctions are imposed for cases of violation of the obligations
resulting from the law. Less serious cases are sanctioned with a fine of up to €30,000, while
in serious cases the fine can be up to €500,000. It is also important the provision15 imposing
the exclusion of fined employers from participating in public competitions. This provision
is dictated by the long-standing intention of regional (Länder) legislation to encourage
participants in public competitions to comply with obligations arising from collective
agreements.16


5. The proposal for a Directive from the angle of the German law.
5.1. The scope of application of the Directive.
   Both the Directive (articles 1 and 2) and the MiLoG (§ 22) lay down the minimum wage
for all workers. The question arises as to whether all the exceptions to the scope of
application contained in § 2217 are to be considered in accordance with article 2 of the
Directive and whether they can be justified by legitimate and objective reasons. The exclusion
of minors under the age of 18 without an apprenticeship seems doubtful; in this event, the
idea of creating an incentive for vocational training could be a legitimate justification.




13 See in particular § 17 MiLoG.
14 § 5, comma 1 MiLoG.
15 See § 19 MiLoG.
16 See below V.4. a).
17 See above IV. 2. a).



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5.2. The promotion of collective bargaining on wage determination.
   Article 4 of the proposed directive is designed to counteract the increasing decline in the
contractual coverage rate. If this rate is below 70%, Member States must provide a
framework of conditions favourable to bargaining, in particular an action plan. This
provision requires implementing measures in Germany, as the coverage rate is around 44%.18



5.3. The chapter on statutory minimum wages.
a) The determination of the minimum wage.
    Article 5 of the Directive contains a programme for determining the minimum wage. It
consists of five postulates that must be taken into account when setting the appropriate
minimum wage:
    - the aim: to achieve decent living and working conditions, social cohesion and upward
convergence (no. 1)
    - a catalogue of criteria to be followed in determining the minimum wage (No 2)
    - a reference to the methods used in the international context (No 3)
    - regular updating of the minimum wage (No 4)
    - establishment of consultative bodies.
    From the point of view of the German lawmaker, minimum wage legislation is essentially
based on a number of basic reasons19 which are expressly mentioned in § 9(2) of the MiLoG:
adequate minimum protection of workers, the guarantee of fair competition and compliance
with the employment rate. With regard to the first criterion, the explanatory memorandum
to the bill points out that collective bargaining is no longer able to impose a sufficient wage
level in all sectors, i.e. to guarantee a wage level that, in connection with a full-time
employment relationship, is suitable for meeting basic living needs without having to resort
to state social benefits.20 In 2015, the legislature introduced a minimum wage for the first
time, setting a sum of €8.50 per working hour, taking into account the threshold that the
Code of Civil Procedure stipulates as a minimum income exempt from seizure and making
a slight upward adjustment.


b) Periodic updating of the minimum wage.
    The criteria laid down in Article 5(2) and the guidelines, such as the ones commonly used
at international level (No. 3), are not mentioned in the MiLoG. However, Article 9 of the
MiLoG, in defining the procedure to be carried out by the minimum wage Commission
(hereinafter “MiLo Commission”) for the updating of the minimum wage, provides a selection


18 Federal Statistical Office, see:
 https://www.destatis.de/DE/Themen/Arbeit/Arbeitsmarkt/Qualitaet-Arbeit/Dimension-5/tarifbindung-
arbeitnehmer.html
19 See BT-Drucks. 18/1558, 28.
20 Ibid., 26.



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of criteria (adequate minimum protection, guarantee of fair competition, compliance with
employment requirements)21 which corresponds to the provisions of Article 5(1), (2) and (3).
The latest biennial report of the MiLo Commission states in detail that these criteria have
been fully implemented.22 The introduction of the legal minimum wage may in itself generate
a spill-over effect in low-wage sectors, a phenomenon also highlighted in the explanatory
memorandum of the draft directive.23 In particular, it was noted that from the introduction
of the minimum wage until 2016, hourly wages in low-wage sectors increased by 14.1%, from
2016 to 2018 by 6.7%.24 With regard to the Keitz index, which measures the ratio of the
minimum wage to the median wage, the share stands at 46% in 2020. Against this backdrop,
an intense discussion has recently opened up about the goal formulated in 2014, which is to
guarantee a wage level that, in relation to a full-time employment relationship, is suitable for
meeting one’s basic living needs without having to resort to state social benefits. In the
scientific and political debate, doubts about achieving this goal are growing25 and the pressure
for a significant rise of the minimum wage is increasing. Alongside some political parties and
a large number of workers’ unions, the Minister of Labour and Finance is proposing a
minimum wage of €12 per hour. It is difficult to predict whether these demands will find the
support of a parliamentary majority. Furthermore, it has to be noted that according to § 9,
para. 4 of the MiLoG, the MiLo Commission is obliged to set the minimum wage following
the lines of collective bargaining. There are quite a few sectors whose collective agreements
do not reach the €12 level.26


c) Variations and additional remuneration.

   With regard to Article 6 of the directive, which sets out certain variations in the minimum
wage for specific groups of workers, it seems to me that the restrictions in current German
law mentioned above can be justified by the pursuit of legitimate objectives.27 It is very
common in the systems of the Member States to allow a different wage for apprentices than
for other workers. The reason for the special pay scheme for the long-term unemployed
within the first six months, is to improve employment opportunities and § 22 para. 4 of the
MiLoG allows the Government to derogate from this rule if necessary. With regard to
additional remuneration, case law and labour law scholars show a divergence of views. With
the introduction of the minimum wage, the legislator hoped that the minimum wage would
be defined in accordance with the criteria developed by the case law of the Court of Justice.28

21 See above IV.2.c).
22 Cfr. Dritter Bericht zu den Auswirkungen des gesetzlichen Mindestlohns, 2020.
23 See, COM (2020) 682 final, 4.
24 Dritter Bericht nt. (22), 47.
25 For recent researches see Dritter Bericht nt. (22), 78 ff..
26 For an analysis of the various resulting problems see Pusch T., Schulten T., Mindestlohn von 12 €: Auswirkungen

und Perspektiven, in Wirtschaftsdienst, 2019, 335 ff.
27 Apprentices usually have a special wage regime. The exception for the long-term unemployed pursues the

objective of a facilitated integration into the labour market and is subject to a review by the government on the
success or failure of the provision.
28 See Däubler W., Der gesetzliche Mindestlohn – doch eine unendliche Geschichte?, in NJW, 2014, 1924 (1926).



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The Court had opted to recognise bonuses and supplements as components of the minimum
wage, which do not alter the relationship between the worker’s performance and the
consideration received to the detriment of the worker.29
  A ruling by the BAG,30 in referring to a further decision of the Luxembourg Court31, has
opened up a debate in recent academic studies: the question has arisen as to whether the
BAG ruling has paved the way for an orientation contrary to the case law of the ECJ.32


d) Involvement of the social partners.

    The provision laid down in Article 7 is of extraordinary importance for the majority of
the Member States. In countries where labour and/or constitutional law emphasises the role
of the social partners in setting wage levels and the rate of coverage of collective bargaining
is quite high, the legal minimum wage generates mistrust or even resistance on their part. In
this regard, the example of the Nordic countries is particularly significant.33
    The approach of §§ 4 ff. of the MiLoG is very much in line with the openness to the
involvement of the social partners provided for in Article 7 of the proposal. It can be said
that the determination of the legal minimum wage is de jure left to the social partners. They
are also guaranteed a prominent role in the composition of the MiLo Commission, which
adopts the principle of equal participation between employer and employee representatives
who have the right to vote. In a way, it could be said that the composition of the Commission
mirrors what happens in the field of collective bargaining. Even the choice of two experts in
the MiLo Commission in an advisory capacity is attributed to the social partners. The fact
that the law requires the MiLo Commission to turn to collective bargaining at a later stage is
another element which reflects the tendency to create a certain parallelism between the
outcome of collective bargaining and the setting of the minimum wage and reflects the
criteria contained in Article 7. In addition, by sanctioning the prevalence of decrees issued
by the Ministry under special laws (AEntG, AÜG), the legislator shows respect for the
autonomy in collective bargaining of the collective parties involved: in fact, without the
consent of the parties to collective agreement, the issue of these decrees is not authorised.
That is why the respect for collective bargaining autonomy called for in Article 7 is certainly
to be found in the German legislation.34




29 See ECJ Case C-341/02, Commission v. Federal Republic of Germany, EU:C:2005:220; ECJ Case C-522/12, Tevfik,
EU:C:2013:711.
30 BAG 5 AZR 374/16 in NZA, 2017, 378.
31 ECJ Case C-396/13, Sähköalojen, EU:C:2015:86.
32 For detailed information see Franzen M., in Erfurter Kommentar zum Arbeitsrecht, 2021, § 1 MiLoG par. 11 ff..
33 See. Eldring L., Alsos S., European Minimum Wage: A Nordic Outlook, 2012; Furâker B., Larsson B., The European

Trade Union Movement and the Issue of Statutory Minimum Wages, in Trade Unions Cooperation in Europe, 2020, 75-107.
34 See, Corti M., nt. (10), 22.



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e) Effective access to legal minimum wages.

   Article 8 intends to ensure compliance with minimum wage obligations. It contains a
number of provisions aimed at: (a) imposing monitoring and inspections in the field, (b)
providing guidance to the enforcement authorities and (c) providing workers with adequate
information on the applicable legal minimum wages.
   The first two provisions have the broad scope of the provisions of Articles 14 et seq. of
the MiLoG, being addressed primarily to the customs authorities as the bodies responsible
for the enforcement of the MiLoG. Article 12 of the MiLoG regulates the establishment of
an office which is responsible for providing support to the MiLo Commission and
guaranteeing workers and employers information on the subject of the minimum wage.35
Information is particularly important, as the MiLo Commission pointed out in its latest
report. The MiLo Commission has commissioned institutes to carry out representative
surveys to find out how many people are fully aware of the exact amount of the minimum
wage in their employment relationship. The surveys show that only 15% of the people
employed in low-wage sectors know the exact amount, 40% have an approximate
knowledge.36 The MiLo Commission emphasises the function and importance of controls
and points out that the inspections currently carried out by the competent customs
authorities do not meet the necessary standards.37


5.4. Horizontal provisions.
a) Public procurement.

   Article 9 takes its inspiration from some recent developments in German legislation,
namely that of certain Länder, where the legislator aims to prevent foreign companies from
taking advantage of the award of public contracts to pay wages below the level of
local/regional collective bargaining. At first these attempts were unsuccessful because the
public procurement laws conflicted with Directive 96/71.38 The Länder then adapted these
laws to meet the requirements of the law on the freedom to provide services.39 To this day,
14 of the 16 Länder have enacted such laws, whereby all contractors (national and foreign)
are obliged to respect regional/local collective agreements including minimum wages.40 In




35 That office has been established at the Federal Institute for Occupational Safety and Health (Bundesanstalt für
Arbeitsschutz und Arbeitsmedizin).
36 Dritter Bericht nt. (22), 57.
37 For an overview of controls see Dritter Bericht nt. (22), 60.
38 See Court of Justice, C-346/06 (Rüffert), EU:C:2008: 189 The same result (concerning a subcontractor) in

the case 549/13 (Bundesdruckerei), EU:C:2014:2235.
39 ECJ C-115/14, RegioPost, EU:C:2015:760.

40 For an analysis of these laws and the problems they raised with regard to German and European law, see
Faber M., Die verfassungs- und europarechtliche Bewertung von Tariftreue- und Mindestentgeltregelungen in
Landesvergabegesetzen, in Neue Zeitschrift für Verwaltungsrecht, 2015, 257.

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accordance with Art. 9, the other two Länder should legislate in a similar way. With regard to
contracts commissioned by federal institutions, the Parliament should pass a special law.41


b) Monitoring and data collection.

   Paragraph 9, section 4 of the MiLoG assigns the MiLo Commission the task to periodically
monitor the effects of the minimum wage on the conditions of worker protection, on the
functioning of competition and the employment rate in certain sectors and regions as well as
on productivity. This monitoring activity makes it possible to collect a large amount of data
that will form the basis for the compulsory biennial report. By doing so, it would not be
difficult to fulfil the requirements of Article 10 with regard to the EU Commission.


c) The right to take legal action and the prohibition of victimization.

   Article 11 of the draft directive pursues the objective (similar to other directives) of
providing effective protection in the event of the infringement of rights concerning the legal
minimum wage or the guarantee of the minimum wage laid down in collective agreements.
In addition, the provision strengthens the position of the workers interested in the
prohibition of the so-called victimisation. With regard to both measures, there is no need to
transpose the provision into German labour law, since all the relevant protective regulations
also apply to minimum wages and § 612a of the Civil Code contains a general prohibition of
victimisation.


e) Penalties.

   Paragraph 21 of the MiLoG contains detailed rules and establishes fines which are
proportionate to the gravity of the breach of the obligations under the MiLoG.42 The
imposition of a fine results in the exclusion of the contractor from participating in a future
public procurement procedure for an adequate period (§ 19 MiLoG). Consequently, a
transposition of Article 12 into German law seems entirely superfluous.


6. The legal basis of the Directive.

   Does the EU have the competence to intervene in the field of minimum wages by
adopting a directive like the one at hand? This question is as crucial as it is controversial. The


41 The total annual procurement amounts to €400 billion (=15% of GDP), of which 12% falls on the federal
state. That is why the DGB (the roof association of workers) is calling for a federal law, see DGB position
paper of 26 May 2020.
42 For a quantitative documentation of fines imposed see Dritter Bericht nt. (22), 63.



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EU Commission has identified the legal basis for this regulatory intervention in Articles
153(1)(b) and 153(2) TFEU, affirming full compliance with the limits imposed on EU action
by Article 153(5) TFEU. The divergence of views emerged during the consultation phase of
the directive leads to the assumption that Member States will have to deal with this issue
during the final approval and may not be able to agree on it.
    The question of regulatory competence would need a study proper. A few brief remarks
in this regard will be adequate for the purposes of this contribution.43 According to German
labour law scholars the scope of the exclusion of remuneration in Art. 153 para. 5 TFEU is
highly debated. Generally speaking, there are two different opinions on this matter.44 Some
labour scholars argue that the EU is precluded from regulating wages either directly or
indirectly, while other scholars only allow indirect intervention. The debate so far has mainly
focused on anti-discrimination rules and measures concerning wages. The second position
seems to be supported by the case law of the Court of Justice.45 According to the European
Courts, the limitation of competence cannot be extended to all matters that have any
connection with wages, at the risk of depriving certain sectors covered by Article 153(1)
TFEU of a significant part of their content. Therefore, following the Court’s opinion, a
restrictive interpretation seems to be more satisfactory, considering that the exclusion of
wages in Article 153(5) TFEU is justified by the fact that the determination of the level of
wages falls within the collective bargaining autonomy of the social partners operating at
national level, as well as within the competence of the Member States in this matter. This, in
my view, is the case-law framework against which the legitimacy of the proposed directive
must be assessed. And this assessment must be carried out in each case in close connection
with the individual provisions. By way of example, reference is made to Article 4 of the
directive, which refers neither directly nor indirectly to wages. The impression is that, in this
respect, Article 153(5) TFEU does not stand in the way of the proposed directive, although
some elements still require careful consideration.46


7. Final remarks.

    It is doubtful whether the German government will continue to support the minimum
wage project as it has been transposed into the proposal. This depends among other things
on the outcome of the autumn elections and the composition of the new government. As
far as the social partners are concerned, the employers’ inter-sectorial organisation is strongly
opposed to the directive,47 whereas the DGB has shown significant openness in favour of
the EU Commission’s initiative.48

43 See for adetailed review Sagan A., Witschen S., Schneider C., Der Kommissionsvorschlag für angemessene Mindestlöhne
in der Europäischen Union, in ZESAR, 2021, 103. Thüsing G., Hüller-Brungs G., Soziale Gerechtigkeit ultra vires, in
NZA 2021, 170. These authors firmly deny the competence oft he EU.
44 See for a presentation of views Riesenhuber K., Europäisches Arbeitsrecht, De Gruyter, Berlin, 2009, 108.
45 See ECJ, C-307/05, Del Cerro Alonso, EU:C:2007:509 par. 39-41. Confirmed by ECJ, C-268/06, Impact,

EU:C:2008:223 par. 122-125 and ECJ, C-501/12, Specht et al., EU:C:2014:2005, para. 33.
46 For an argument in this direction see Sagan A., Witschen S., Schneider C., nt. (43).
47 https://arbeitgeber.de/themen/europa-und-internationales/europaeischer-mind
48 https://www.dgb.de/schwerpunkt/mindestlohn/hintergrund/mindestloehne



https://doi.org/10.6092/issn.1561-8048/13372                                                                        75
 Maximilian Fuchs                                                                   Italian Labour Law e-Journal
                                                                                           Issue 1, Vol. 14 (2021)
                                                                                                  Section: Theme




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Copyright © 2021 Maximilian Fuchs. This article is released under a Creative Commons
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https://doi.org/10.6092/issn.1561-8048/13372                                                                    76
