EU social and labour law (2) - between market building and social progress: an analysis of the revised Posted Workers Directive and of the new Adequate Minimum Wages Directive - Lecture 16 - EU Law

What is meant by the ‘death of social europe’?

The year 2000 was arguably the ‘high watermark’ of the ‘Social Europe’ project, characterised by visible social progress aspirations.

Some would say, social progress ‘only in name’ as some of the legal instruments adopted in this phase were less socially ambitious (for example the Working time directive of 1993 was marred with ‘opt-out’ provisions, arguably still one of the Achilles’ heels of the revised Directive 2003/88) while other, (especially in the equality domain), were more far-reaching. The Charter itself was not declared to be in any way binding until the Treaty of Lisbon came into force in 2009.

Reflecting on this phase, on the impact of austerity, of EU induced collective bargaining decentralisation processes, and of the social conditionalities attached to bail-outs agreements between the EU Commission/ECB/IMF (often referred to as ‘the troika’) and some EU member states on the brink of defaulting, Keith Ewing posited the idea of ‘The Death of Social Europe’.

What did the era of 2007-2015 entail in relation to the EU’s common/single market and EU social law, what was this era characterised by? (there were 4 factors)

No reform agenda (no social dialogue; no new Com proposals) →

• The conclusion of the commission was that no more directives were needed, therefore they lacked ambition in terms of new measures.

• New political stances of favouring market deregulation for the sake of economic efficiency to lead to more jobs and growth. The distinction between employment policy versus employment rights were conflated, therefore not only did we need more rules and standards, we had too many that they were concerned with unemployment and hence, it led to fewer protections in place for workers. This is evidenced through soft law, such as Lisbon strategy and by 2010, the EU would become the most dynamic economy if more jobs were created by deregulating some areas of regulating employment, such as hire and firing. They believed that reducing regulations would incentivise businesses and employment opportunities.

Employment policy v employment rights

Austerity, bail-outs, macroeconomic and fiscal rigour v national IR, LL, Welfare systems →

In 2007-2008 the financial and economic crises that eventually led to a decade of austerity and restructuring policies, both in the UK and in the rest of Europe.

This is meant as a crisis of 2007 and economic crisis 2008 that followed. This led to a unsustainable debt, and if countries start defaulting and are within the Eurozone, this will potentially decline the value of the Euro. The requirements to receiving a bail-out and financial support from the EU was on the comndition of member states spending less on public spending, slashing public expenditure and imposed conditions that impacted the private labour market such as reducing wage, and a collective agreement between tradeunions and lawyers to not take place at a sector level but enterprise level to reflect the performances of businesses/decentralise wages which leads to wages dropping, entreprise collective bargaining and having a floor level payments for everyone.

‘The Death of Social Europe’?

In general, what did the Viking and Laval trigger in terms of a fault-line?

• It prompted the division between social integration and market integration

• This division caused a rift and a crisis of trust between the trade union movement and the very idea of market integration that has yet to be fully repaired.

• Critics argue these rulings protect businesses' freedom of movement over worker rights, potentially contributing to "social dumping," where companies choose low-wage countries, creating a "social deficit" in EU law.

In the words of former Internal Market Commissioner Mario Monti, he said that ‘The Court's cases have exposed the fault lines that run between the single market and the social dimension at national level’.

What was the context, issue and outcome of the Laval case?

Context → A Latvian company called Laval won the tender for construction work at a school in the town of Vaxholm, in Sweden. They ‘posted’ their workers from Latvia (now an EU Member State) to Sweden to fulfil the contract. This posting was taking place as part of a service provision, namely a construction service performed by Laval in another EU Member State. So Laval’s workforce was not subject to ‘Free movement of workers’ rules (which would not entitle them to full equal treatment, non-discrimination, all labour rights and rules of the ‘host member state’ applying to the migrant worker), but were regulated by a free movement of services instrument. As is standard practice in the highly sophisticated Swedish industrial relations system, the Swedish unions started negotiations with Laval as soon as the tender was awarded in order to sign a collective agreement with regard to wages and other working conditions, which in Sweden (a country with strong social partners and a culture of social dialogue and consensus) are always laid down by negotiation on a case-by-case basis. As Laval did not want to pay the wages requested, they signed a collective agreement in Latvia (for lower wages than the Swedish ones - the cheaper wage would be a competitive advantaged based on low wages, going against Swedish collective agreements). Following the failure of the Swedish negotiations, the Swedish trade unions took strike action by blockading the construction site. Solidarity strike actions then followed from the electricians trade unions who refused to service the site.

Issue → This arose as a clash between EU rights, and between EU freedoms and national standards and industrial relation processes. Both types of action were seen by Laval as a breach of its EU protected ‘free movement of services’ rights, with Swedish unions instead claiming that the Directive expressly included ‘core rights’ protected both by law and by ‘collective agreements’ as defined by Article 3(8) of the Directive, and that felt within their rights to support collective bargaining by means of industrial muscle, especially since the right to strike was now protected by Article 28 of the CFREU.

Outcome → The ECJ also applied the proportionality test and said that collective action for the protection of the workers of the host State against ‘social dumping’ may constitute an overriding reason of public interest, which in principle could justify a restriction on one of the fundamental freedoms, namely free movement of services. The means of blockading action by a trade union falls within the objective of protecting workers.

• While the right to strike is a fundamental right, it must be exercised proportionately and cannot infringe on the fundamental freedom of companies to provide services across borders. The collective action was seen as an unjustified restriction on Laval’s freedom to provide services.

• The ruling confirmed that industrial action can be restricted if it violates EU freedom of movement principles. It significantly narrowed the scope for trade unions to use collective action to force compliance with local agreements by foreign companies.

What is the 6 consequences/impacts of the Laval case?

• National labour rights were placed in a diminished position than EU rights, therefore EU market integration and market freedoms were prioritised over EU and national social rights. There raises concerns of no room for diversity of CB and IA practices, threat to voluntaristic systems of IR and threat to equal treatment of workers. The priorisation of the free open market economy over social rights.

• The fear of ‘social dumping’ and ‘globalisation’ in an enlarged Europe, with new Easter European countries that had both high skills and low wages. The fear that EU market freedoms prevail over both EU and national social rights. A debate about protection v protectionism and east v west was also triggered by these decisions

• The concern within the Posted Workers Directive is how this would impact other employers? - This treats the minimal floor of standards as the ceiling, as it would be disproportionate to interfere with the worker’s rights. This challenges states with traditions of collective bargaining, and implicitly condones the race to the bottom, treating the lower standards as the absolute maximum.

• Doctrine of mutual recognition with Cassis De Djion recognised the concerns of race to the bottom, and this was realised within the Laval and Viking case. The collective bargaining treats the minimum as the maximum, it directly contradicts initial beliefs of Delor and having minimum standard undercutting what the MS initially agreed. That minimum right is treated as the end in itself, disincentivising collective bargaining.

• On the narrow reading, the Viking and Laval case contradicts the Minimum Harmonisation directive outlining that as long as MS adhere/adopt the minimum standard of directives, it will not impede MS from imposing higher standards or protections, however Viking and Laval case undercut these higher standards which Scandanavian nations which historically have stronger rights and collective agreements, the court concluded the minimum was supposed to be the maximum, lowering the standards - therefore disencentivising nations from implementing a higher threshold. (floor of rights versus ceiling → Laval case treats the minimum requirements as the ceiling)

• The Court put into question the flexibility of the Swedish collective bargaining system, emphasising the alleged lack of certainty for business unable to ascertain in advance the conditions they would have to guarantee to their posted workers. More worryingly, this and other cases cast a doubt on the ability of any collective agreement that is not ‘universally applicable’ (i.e. applying by law to all workers in a sector or industry) to reach the level of precision and foreseeability demanded.

What was the context, issue, outcome and importance of the AGET Iraklis case?

Context → AGET Iraklis, a Greek cement company, was denied approval by the Greek Minister of Labour to proceed with a plant closure and mass redundancies, which was required under Greek law.

Issue → A reference strategically litigated by a French multinational group in the cement industry partly to dismantle the residual role of Greek national authorities to control collective redundancies at a time EU austerity policies had worsened the economic performance and job market prospects of the Greek economy. The company challenged the decision, arguing that the need for administrative approval violated Directive 98/59 (on collective redundancies) and Article 49 TFEU (freedom of establishment).

Outcome → The CJEU ruled that, in principle, national regimes requiring prior approval to protect employees are valid, even in severe economic crises. However, such decisions by public authorities must be based on objective criteria, be properly reasoned, and respect a balance between worker protection and the freedom to conduct business.

Importance → The Court refuted AG Wahl’s opinion that ‘the EU is based on a free market economy which implies the undertakings must have the freedom to conduct their business as they see it’, and indirectly refuted by saying since the Lisbon treaty ‘as is apparent from Article 3(3) EU, the European Union is not only to establish an internal market but is also to work for the sustainable development of Europe, which is based, in particular, on a highly competitive social market economy aiming at full employment and social progress, and it is to promote, inter alia, social protection’ (shift in attitude?)

What is the impact of the AGET Iraklis from various ways of looking at the judgment?

The Troika would probably argue that EU law does not require that such a protective regime for workers exist, and that therefore it could perhaps be abolished. Given that a state which is seemingly constantly on the brink of insolvency does not have equal bargaining power as its lenders, it would not be surprising if the Greek authorities came under tremendous pressure to relax the requirements for carrying out collective redundancies.

The Greek Government would presumably seek to argue in its negotiations with the Troika that the impugned national law is not in principle incompatible with EU law, and that EU law does not require that such a law be disapplied.

The Court surely cannot be expected to broker an agreement between Greece and the institutions, as its proper role is to interpret and rule on the validity of EU law.

What was introduced after backlash from the Laval case and the posted workers directive?

The Enforcement Directive 2014/67 was introduced by the Commission with a visible sense of satisfaction as an instrument that and ‘sends a clear signal […] that Europe does not accept fraud or abuse at the expense of posted workers or other forms of 'social dumping'.

A proposal for some ‘targeted amendments’ of the PWD was submitted by the Commission in 2016 and eventually adopted by the Parliament and Council as Directive 2018/957. It introduced a number of novelties but arguably the most important one was to replace the definition and concept of ‘minimum rates of pay’ applicable to posted workers under Article 3(1)(c) of the PoW Directive with a new broader notion of ‘remuneration’, defined as ‘all the constituent elements of remuneration rendered mandatory by national law, regulation or administrative provisions, or by collective agreements or arbitration awards, which, in that Member State, have been declared universally applicable’.

However the problem with posting directives … posting practices associated with the provision of cross-border services were both relying extensively and exacerbating wage competition between high-wage and low-wage member states, in other words ‘social dumping’ (not the pathology of posting or physiology of posting as the CJEU understood it).

What was the EU pillar of social rights, and what was the intention behind it? How does the EU pillar of social rights relate to market integration and social europe?

As part of its social ‘triple-A’ commitment, the EU adopted the EU Pillar of Social Rights, a ‘soft law’ declaration, part-Charter part-White paper, setting out 20 key principles and a regulatory agenda on which the EU is steadily delivering.

EU Pillar of Social Rights wasn’t meant to be binding, but meant to encourage secondary legislation in a number of areas - spanning from equal opportunities, education, minimum income and etc.

New policy and political consensus have been formed across member states and politics on social and labour standards - but at the EU level, they were in favour of European social rights despite having resistance or agreement with national labour law. This was an attempt to rejuvinate social europe or otherwise would lead to a decline of the EU. By killing social rights, this would mean killing european market integration which would cause political disorder such as the far right arising, rising euroskepticism and failure of market integration, and instead the member states continued to support social rights to uphold the standard and retain the market integration at the EU level.

EU pillar of social rights delivered the Directive on Adequate Minimum Wages (AMWD) as a part of it’s agenda, what is in particular the focus of Article 4 and 5?

AMWD attempts to promote living wages and seeks to reinvigorate and promote collective bargaining, attempting to undo the damage produced during the austerity decade.

In Article 5, there is a double threshold of adequacy to ensure a minimum wage - “guide their assessment of adequacy of statutory minimum wages […] indicative reference values commonly used at international level such as 60% of the gross median and 50% of gross average income at national level”

In Article 6, the provision is about member states having to promite collective barginaing and how much promotion they have to do, till it reaches 80% of the workforce (8 workers out of 10) and obligation to the member states to report to the commission to increase the collective bargaining up to the threshold standard. The state has to get involved to promote market collectibve bargaining, and it has to be made universally applicable to all (2 ways to establish collective bargaining coverage).

An address to Viking and Laval cases in undermining collective bargaining - attempting to solve issues of the Worker Directive that initially attempted to amend the Posted Workers Directive?

What is the action for annulment against AMWD by Denmark, supported by Sweden? What is the context, issue, AG Opinion and outcome? (Denmark v Parliament and Council)

Context → Denmark (supported by Sweden) brought an Article 263 TFEU action for annulment against the AMWD.

Issue → Their core contention was that the Directive had been adopted in breach of the Article 153(5) TFEU exclusions of competence in respect of matters affection ‘pay’ and ‘right of association’.

AG Opinion → In January 2025 the Advocate General produced an Opinion that essentially agreed with Denmark, and recommended the partial or total annulment of the Directive.

Outcome → In November 2025, the Grand Chamber of the CJEU issued a judgment that ‘only’ required the annulment of a number of very minor and limited paragraphs on Article 5 of the Directive. (The ECJ salvaged most of the directive and article 4, but annulled bit of article 5. The only thing that got deleted was the criterias that member states can take into account when taking in consideration the adequacy and member states will not be able to escape the requirement of achieving 80% of collective bargaining every 2 years to the commission on how they intend to encourage the system of collective bargaining.)

Ewing argues that there is the ‘death of social europe’, why does he argue this? And what are the 3 key points?

Ewing argues that the social democratic experiment that once defined Europe as a progressive global force is being systematically dismantled by a neo-liberal counter-revolution.

Ewing argues that social democratic legal instruments are no defence against neo-liberal economics, asserting that for social rights to survive, the campaign for progressive economics must be won, as human rights and current economic policies are in DIRECT conflict. He warns that if Social Europe is truly dead, the future of the EU itself is at risk, as workers may no longer see a reason to support a project that fails to protect their rights.

His overall arguments can be summarised into three key points:

• There was displacement of social democracy by neo-liberalism → The economic crisis provided an opportunity for a major shift in power from labour to capital. While "Social Europe" was built on the promise of guaranteed social rights and the integration of collective bargaining into law-making, these structures are now under coordinated attack. He argues that we have moved from an era of building social protections to one of social regression.

• New economic governance arrangements as a primary driver of this decline → (1) Economic "Coordination" is being used to subordinate labour rights to goals of "international competitiveness" and "price stability" and (2) Deregulation through Decentralisation which meant there is a premeditated effort to shift collective bargaining from the sector-wide level to the individual firm level, which Ewing argues is a prescription for reducing union power and increasing wage inequality AND (3) In countries like Greece, Romania, and Ireland, the European Commission, the ECB, and the IMF have forced the destruction of entire collective bargaining structures as conditions for financial assistance, often in violation of international legal obligations.

• A Crisis of Legality and Democracy → (1) Neo-liberal measures are being exploited in apparent violation of the legal obligations of EU member states and institutions, (2) International standards, such as those from the International Labour Organization (ILO) and the ECHR are being ignored or bypassed by technocratic processes that lack democratic accountability, (3) ECJ fails to enforce the rule of law against economic pressures.

Why did Jacques Delors say ‘no one falls in love with the common market’? Why did he say this?

Jacques Delors stated the following. Delors believed that to gain public support, the EU needed to be more than a purely economic entity, requiring a social dimension that impacts citizens' lives positively, however Delors argued that economic, technical, or legal mechanisms do not inspire passion or solidarity. Delors recentered the EU’s social policy of working besides trade unions and etc, acting as safeguard for concerns that might arise from deregulation.

Delors spoke about this during the process of euro-pesissism, where the EU was reluctant to intoducting more sweeping reforms, due to an era in the 1980s of high unemployment, inflation and the decline of industries. This introduced the earlier forms of social rights based directives, focusing on matters such as equal pay and redundancies. There was a greater focus on social rights based policies, and this was pushed forward by SEA/Single European Act, such as implementing the QMV, formation of the European Parliament and other influential matters - emphasising the joint identities of European nations, and enhanced European intergration - an era of euro-optimisim.

There is a balancing act between social rights based and economic policies, reinterpreting capitalist assumptions behind the common market, with the greater emphasis of neoliberal deregulation amid the 1980s (an example being Thatcherite Britain). The treaty of lisbon was liberalising, such as four criterias for countries joining the euro, influenced on neoliberal understandings of economic and monetary theory, such as need for price stability which is read under neoliberal lens - such as evading debt deficit.

What are the rationales sustaining the EU regulatory and policy area that can be broadly defined as ‘EU social policy’? Focus on collective bargaining, and social dialogue?

Social Dialogue component is where the legislative ability is extended to social partners to collectively conclude framework agreements, and when there is a question of social policy that arises, the social partners who are representatives of relevant stakeholders such as two sides of industries (employees - ETUC only represent employees at an official capacity at EU level - and employers - such as CEPE and others) and conclude agreements which can be implemented in council decisions.

It formerly moved from a consultative role to an impactive role, the role of the partners was constitutionalised, why wasn’t there a greater role payed by these social partners in a turbulant period of austerity.

Brian Bercussion focused on the development of EU labour law in relation to social dialogue and collective bargaining, what did he argue? And what are some criticisms that arise from EU social policy, and the power/legitimacy of social dialogue relating to collective bargaining?

He framed social dialogue as the democratic legitimacy of stakeholders and representatives, and democratic legitimacy of the EU bodies.

The European commission’s ability to propose legislation and etc, social dialogue has to balance these by operating in the shadow of the law and there has to be social policy in the first place to trigger social dialogue for the legislative impact to come to force.

The criticism is that when there is no law, there is no shadow cast and the role of social dialogue and social partners declines (social partners didnt have a role to play in austerity period of the 1980s, as there was no willingness on the EU actors to propose social policy, therefore there is no law for social partners to have collective agreements on. Therefore, if there is no meaningful proposal for social policies and want to dogmatically adhere to austerity, social dialogue fails - it takes two to tango in essence.

Has there been a shift from the Viking and Laval cases and the approach to social policy? Any criticisms to/relevancy of Ewing’s ‘death of social europe’?

Recently, there has been a consistent effort for the EU to encourage collective bargaining contrast to -

• The Eurozone Crisis response, where there was cutting public sector workforce towards Italy, Ireland and Spain in relation to reducing deficit spending and austerity driven stance to preserve the Euro and trying to fit cuts to specific MS, and the covid response

• The Covid Response had greater encouragement for employees and employers, greater investment and the pillar of social rights and a higher floor of standards being promoted and there were country specific recommendations which were used to promote workers rights, in particular digital workers rights.

Maybe … there isn’t a death of social policy as Ewing said, however we can recontextualise this for the time period at which he wrote this in 2015.

What are the rationales sustaining the EU regulatory and policy area that can be broadly defined as ‘EU social policy’? Focus on the Treaty of Maastricht?

There was a strong push of monitored integration, discussions of a new single currency (the euro) and the requirement of a monitor system to ensure that the currency does not suffer a reduction in value due to inconsistencies across member states.

And the macroeconomic framework of requirements of certain member states having debt, or deficit to a certain percentage, however this is not respected by member states and doesn’t lead to countries following through it, but it can drastically impact the member states negatively especially in 2000s-10s during austerity.

What are the rationales sustaining the EU regulatory and policy area that can be broadly defined as ‘EU social policy’? Focus on the Community Charter 1989?

EU social policy was not intended to interfere with this process (of establishing a common market and fall-out from this); rather it was intended to smooth out some of the bumps for those most affected, namely the employees.

Thus, the EU was giving the common market a human face while at the same time trying to stop unfair competition between states.

The EU social directives did provide some scope for regulatory competition between Member States but only above the floor of rights. It was hoped this competition might precipitate a race to the top.

What is meant by the ‘Social Market Economy’? How is this relevant to certain aspects of the EU integration project?

The Constitutional Convention described it as a ‘highly competitive social market economy’ which was meant to underline the link between the economic and social development of the EU, and the efforts made to ensure greater coherence between economic and social policies.

Examples include that the EU’s ‘social market economy; should aim at full employment and social progress.

This is reinforced by later introduced Treaty Articles of Article 9 TFEU requiring the Union to take into account the promotion of ‘a high level of employment, the guarantee of adequate social protection, [and] the fight against social exclusion ...’. More generally, Article 3(1) TEU provides that ‘The Union’s aim is to promote peace, its values and the well-being of its peoples’.

Nicola Countouris addresses the AG’s opinion in action for annulment against AMWD by Denmark, supported by Sweden (Denmark v Parliament and Council), what did he argue?

Nicola Countouris argues that the Adequate Minimum Wage Directive (AMWD) was validly adopted and that AG Emiliou’s Opinion, which suggests the Directive should be annulled, is based on an unnecessarily expansive and legally objectionable interpretation of the EU’s "pay" exclusion.

Countouris's arguments and his primary points of disagreement with the AG focus on the following areas:

1. Scope of the "Pay" Exclusion → AG Emiliou contended that the "pay" exclusion in Article 153(5) TFEU covers not only the level of pay but also the "modalities or procedures for fixing the level of pay". He argues that by promoting collective bargaining (Article 4) and setting criteria for statutory wages (Article 5), the AMWD restricts Member States' choices in how wages are determined. HOWEVER, Countouris disagreed, seeing this as an unprecedented expansion of the exclusion. He points to established CJEU case law (e.g., Impact and Del Cerro Alonso) which dictates that the exclusion must be interpreted strictly and only prohibits measures that amount to direct interference in the determination of pay, such as setting a uniform EU-wide minimum wage. He argues the AMWD’s provisions are procedural, not substantive, and do not mandate a specific quantum of pay.

2. The "Direct Interference" Test → The AG introduces a broad test where any instrument whose "object is to regulate pay" satisfies the "direct interference" threshold, regardless of how flexible it is. Countouris disagreed with this, arguing the test is novel and overly broad. He notes that many other valid EU instruments (like the Posted Workers Directive) regulate constituent parts of pay procedurally without violating the exclusion. He maintains that the AMWD only interferes with pay-setting indirectly by encouraging collective bargaining coverage.

3. Rationales for the Exclusion → Beyond the traditional rationale of protecting the "contractual freedom of social partners," the AG adds three new rationales: maintaining competition between undertakings, the sensitivity of wage policy, and the diversity of national industrial relations systems. Countouris disagreed with this, finding these new rationales lacking in merit. He argues that the EU's social purpose, as stated in the Treaties, requires balancing economic freedoms against objectives like improved living and working conditions. He suggests that competition should be based on productivity and skills, not on "poverty wages" that the AMWD seeks to eliminate.

4. Consequences for "Social Europe" → Countouris warns that if the Court follows the AG’s Opinion, it risks precipitating an existential crisis for "Social Europe" similar to the controversial Viking and Laval decisions. He believes such an expansion of the "pay" exclusion would unnecessarily encroach on EU lawmaking competences and undermine the social progress aspirations set out in the EU Treaties.

Kalina Arabadjieva and Ioannis Katsaroumpas addresses (Denmark v Parliament and Council), what is their analysis of this case and what the impact of this is? Progress towards social Europe, or the death of social europe as argued by Ewing?

1. The judgment finally confirms the validity of most of the Directive with its core substance, innovations, and spirit intact, allowing the focus to shift to effective implementation.

2. It adopts an interpretation of the exceptions of ‘pay’ and ‘right to association’ that allows substantial scope for interventions not only in wage-setting but also in collective bargaining. In this sense, the Directive successfully tested the boundaries of what EU law is permitted to do in these areas.

3. It confirmed that if collective bargaining provisions are related to the objective of promoting ‘working conditions’, a qualified majority (rather than unanimity) suffices. The same reasoning could apply to other legal bases listed in Article 153(1), such as workers’ health and safety or equality between men and women, if collective bargaining is shown to be an effective means to promoting them. This is significant. The judgment opens up legal space here that policy-makers can creatively use to strengthen the social dimension of the European project.

4. By any measure, the judgment is overall a positive step for Social Europe. Of course, the very fact that the Directive encountered such a strong challenge shows that genuine progress towards Social Europe is often an uphill battle. But the CJEU has opened a door for progressive social experimentation and innovation in advancing Social Europe.

Claire Kilpatrick and Marc Steiert addresses the AG’s opinion in action for annulment against AMWD by Denmark, supported by Sweden (Denmark v Parliament and Council), what did he argue?

The overall argument of the sources is that Advocate General (AG) Emiliou’s Opinion recommending the annulment of the Adequate Minimum Wages Directive (AMWD) is legally and historically flawed. The authors contend that the AG relies on an overly broad interpretation of the "pay competence exclusion" in Article 153(5) TFEU, which they argue should instead be interpreted narrowly to maintain the Directive's legal basis.

Kilpatrick and Steiert conclude that the Court of Justice is not bound by this "inadequate" Opinion and should reject the recommendation for annulment to protect the upward convergence of living and working conditions in the EU.

Kilpatrick and Steiert argue 4 key points -

• Flawed Interpretation of the Pay Exclusion → The AG asserts that the exclusion of "pay" from EU competence is broad enough to cover any measure directly regulating pay, even if general or minimal. Kilpatrick and Steiert counter that the drafting history of the Maastricht Treaty reveals an unresolved and uncertain meaning of "pay," suggesting the Court has the leeway to apply a narrow interpretation.

• Contradiction with Existing EU Law → The authors highlight that many existing EU legal instruments—such as those regarding pregnant workers, work-life balance, and pay transparency—already regulate pay in ways the AG's logic would deem prohibited. They argue that the Directive does not "amount to direct interference" because it does not set individual wage levels or harmonize a specific minimum wage, which is the "bright line" established by the Court's case-law.

• Inadequate Context of "Social Europe": Kilpatrick and Steiert criticize the AG for ignoring the EU's historical role in regulating wages, particularly during the sovereign debt crisis where EU-embedded "Memoranda of Understanding" required significant minimum wage cuts. They argue this provides a precedent for EU involvement in wage adequacy.

• Constitutional Mandate: Kilpatrick and Steiert argues that the AG's Opinion pits EU regulation against domestic regulation unnecessarily, whereas the AMWD is designed to articulate a functioning industrial relations space as mandated by the Treaty's social policy titles.