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Sweden joins Denmark in push to annul EU’s minimum wage directive

Sweden will next week send a formal request to the EU's Court of Justice, asking to be allowed to join Denmark in its case requesting annulment of the EU’s minimum wage directive, the country's deputy employment minister has confirmed.

Published: 20 April 2023 15:21 CEST

Sweden joins Denmark in push to annul EU's minimum wage directive

Denmark will seek to have the EU's minimum wage directive annulled by the EU Court. File photo: JOHN THYS / AFP

The right-wing government has been under pressure from the opposition Social Democrats, as well by both the unions and employer trade bodies, to join Denmark in its push to annul the directive, but has up until now held back from making any commitments.

Paulina Brandberg told TT newswire that Sweden’s permission was that unions and employer trade bodies should alone be tasked with setting salary levels and that the EU should not be involved in setting wage levels through legislation.

“This is an important issue of principle, which at root is about the limits of the EU’s authority,” she told TT. “We were waiting to see how the Danish case was formed and when we saw it, we quickly realised that it was something we could become involved in.”

READ ALSO: Danish government sues EU over minimum wage

Denmark’s government in January brought a case requesting annulment of the EU’s minimum wage directive.

An annulment suit is an attempt to have the directive revoked on the grounds that it is in breach of the EU Treaty.

An EU directive on minimum wages was adopted in October last year but Denmark and Sweden were both opposed because of the established labour models in those two countries, by which wages are set through negotiations between trade unions and employers.

The EU Commission has stated that it will respect the Swedish and Danish models of wage setting and would not force either country to code a minimum wage into law.

But the Danish government in January said it wanted the directive to be removed completely. At that time it was unclear whether the Swedish side would join the case.

Member comments

Anonymous - 20 April 2023 at 16:31 CEST

Speaking from experience on this , once a minimum wage is introduced, the desire to have /need a union is diminished. Employers will use this law to their advantage. Low level wage earners will never be paid a ” living wage “. Canada and U.S are my examples.

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Business leaders: Work permit threshold 'has no place in Swedish labour model'

The Confederation of Swedish Enterprise said in its response to the government’s consultation, submitted on Thursday afternoon, that it not only opposed the proposal to raise the minimum salary for a work permit to Sweden’s median salary (currently 34,200 kronor a month), but also opposed plans to exempt some professions from the higher threshold.

“To place barriers in the way of talent recruitment by bringing in a highly political salary threshold in combination with labour market testing is going to worsen the conditions for Swedish enterprise in both the short and the long term, and risks leading to increased fraud and abuse,” the employer’s group said.

The group, which represents businesses across most of Sweden’s industries, has been critical of the plans to further raise the salary threshold for work permits from the start, with the organisation’s deputy director general, Karin Johansson, telling The Local this week that more than half of those affected by the higher threshold would be skilled graduate recruits Swedish businesses sorely need.

But the fact that it has not only rejected the higher salary threshold, but also the proposed system of exemptions, will nonetheless come as a blow to Sweden’s government, and particular the Moderate Party led by Prime Minister Ulf Kristersson, which has long claimed to be the party of business.

The confederation complained that the model proposed in the conclusions of the government inquiry published in February would give the government and political parties a powerful new role in setting salary conditions, undermining the country’s treasured system of collective bargaining.

The proposal for the higher salary threshold, was, the confederation argued, “wrong in principle” and did “not belong in the Swedish labour market”.

“That the state should decide on the minimum salary for certain foreign employees is an unacceptable interference in the Swedish collective bargaining model, where the parties [unions and employers] weigh up various needs and interested in negotiations,” it wrote.

In addition, the confederation argued that the proposed system where the Sweden Public Employment Service and the Migration Agency draw up a list of exempted jobs, which would then be vetted by the government, signified the return of the old system of labour market testing which was abolished in 2008.

“The government agency-based labour market testing was scrapped because of it ineffectiveness, and because it was unreasonable that government agencies were given influence over company recruitment,” the confederation wrote.

“The system meant long handling times, arbitrariness, uncertainty for employers and employees, as well as an indirect union veto,” it added. “Nothing suggests it will work better this time.”

For a start, it said, the Public Employment Service’s list of professions was inexact and outdated, with only 179 professions listed, compared to 430 monitored by Statistics Sweden. This was particularly the case for new skilled roles within industries like battery manufacturing.

“New professions or smaller professions are not caught up by the classification system, which among other things is going to make it harder to recruit in sectors which are important for the green industrial transition,” the confederation warned.

Rather than implement the proposals outlined in the inquiry’s conclusions, it concluded, the government should instead begin work on a new national strategy for international recruitment.

“Sweden instead needs a national strategy aimed at creating better conditions for Swedish businesses to be able to attract, recruit and retain international competence.”

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