Recent EU Employment Law Developments

Recent EU legislative developments in the context of employment law include an unexpected opinion by the Advocate General of Court of Justice of the European Union and the publication of the Platform Work Directive. This update will examine both of these developments and what they might mean for Irish Employers.

Decision of Advocate General

The Advocate General (AG) issued an opinion in January 2025 recommending to the Court of Justice of the European Union (CJEU) that EU Directive 2022//2041 on Adequate minimum wages in the EU (the AMW Directive) be annulled.

Background

As statutory monthly minimum wages vary widely across EU Member States, the European Commission identified ‘the lack of clear and stable criteria to set and update minimum wages’ and ‘the insufficient involvement of social partners’ as being among the factors causing an insufficient protection of workers by adequate minimum wages across the European Union.

In response to those concerns, Article 1(1) of the AMW Directive seeks to establish a framework for

1. the adequacy of statutory minimum wages
2. promoting collective bargaining on wage-setting, and
3. enhancing effective access of workers to rights to minimum wage protection where provided for in national law and/or collective agreements.

This framework is designed to contribute to the overarching aim of ‘contributing to upward social convergence and reducing wage inequality.’

Denmark and Sweden

Denmark and Sweden voted against the adoption of the AMW Directive on the basis that it could threaten their existing national models of autonomous labour relations. The Danish government, backed by Employers’ associations and trade unions, and subsequently the Swedish government, instituted legal proceedings arguing that the AMW Directive is incompatible with EU law.

AG’s Opinion

The AG’s opinion supported the Danish and Swedish arguments and proposed the full annulment of the AMW Directive. The AG’s position was not anticipated as the directive had been carefully examined by the European Parliament, the Council, and the European Commission. The AG proposed that the Court of Justice annul in the AMW Directive in full of the European Parliament on the ground that it is incompatible with Article 153(5) Treaty on the Functioning of the EU as it legislates in the area of ‘pay’ which is excluded from the EU’s competence.

Potential Impact of Annulment

The CJEU is not bound to follow the AG’s opinion, but it is clear that the court will have to consider if the AMW Directive effectively shifts authority to regulate ‘pay’ to the EU which it is expressly forbidden to do under Article 153(5) of the Treaty on the Functioning of the EU. While annulments of entire directives are rare, the decision of CJEU in the coming months is one to watch as whatever the outcome, Ireland as an EU Member State will need to adhere to whatever wage setting mechanisms the court approves.

The Platform Work Directive

The EU Council has introduced new regulations aimed at improving working conditions for individuals engaged in digital labour platforms across the EU. The Directive on enhancing working conditions in platform work, known as the “Platform Work Directive,” was published in the Official Journal in late November of the previous year. EU member states, including Ireland, have until 2nd December 2026 to incorporate the Directive into national law. The EU is the first global legislator to propose specific regulations for digital labour platforms.

What is Platform Work?

Platform work refers to a type of employment where Organisations or individuals use an online platform to connect with others for solving particular problems or providing specific services in exchange for payment. During the COVID-19 pandemic, platform work became more mainstream, especially with the rise in food and grocery deliveries. Platform work is also sometimes referred to as the ‘gig economy.’ While digital platforms have benefited both businesses and consumers, they have also led to the emergence of ambiguous issues, particularly regarding employment status.

What is the Platform Work Directive Aiming to Achieve?

The Platform Work Directive focuses on two primary objectives:

1. It helps define the proper employment status of individuals working for digital platforms.
2. It establishes the EU’s first set of rules for the use of algorithmic systems in the workplace.

Employment Status

The Directive aims to accurately determine the employment status of people working for platforms, allowing them to access relevant employment rights. Member States will need to establish a legal presumption of employment within their legal frameworks when specific conditions indicating control and direction are met.

Regulating Algorithmic Management

The Directive also ensures that workers are well-informed about the use of automated systems that monitor and make decisions regarding their recruitment, work conditions, earnings, and other employment-related matters. It prohibits the use of automated systems for processing certain personal data of platform workers, such as biometric data or information about their emotional or psychological state. Furthermore, the Directive guarantees human oversight of automated decisions, including the right to have those decisions explained and reviewed.

Which Employers/Platforms are Covered by the Directive?

The Platform Work Directive applies to ‘digital labour platforms’ that organise platform work in the EU, regardless of their location or applicable laws. A digital labour platform is defined as a person or entity that provides a service meeting all the following criteria:

1. The service is provided, at least partly, electronically, such as through a website or mobile app.
2. The service is provided at the request of the recipient.
3. The service involves organising work carried out by individuals in exchange for payment, whether the work is done online or in a specific location.
4. The service uses automated monitoring or decision-making systems.

What Should Organisations Do to Prepare for the Directive?

Organisations should first determine if their operations fall within the scope of the Platform Work Directive. Those that use platform work as a primary or supplementary business model should familiarise themselves with the relevant provisions, particularly those concerning employment status, data processing restrictions, and algorithmic management obligations.