On 15 November 2024, the EU Adequate Minimum Wages Directive (the Directive) was transposed into national law.
The three key components of the Directive are to, within Member States:
- establish a framework for adequate statutory minimum wage levels;
- promote collective bargaining on wage-setting; and
- enhance effective access to minimum wage protection for workers.
Also, the Directive requires that where a Member State’s collective bargaining rate is less than 80%, as is the case in Ireland, the Member State is required to compile a framework of enabling conditions for collective bargaining and publish an action plan to accordingly promote collective bargaining.
Only the collective bargaining aspect of the Directive was transposed by way of legislation – S.I. No. 633/2024 – European Union (Adequate Minimum Wages) Regulations 2024. This is because Ireland’s existing minimum wage setting framework was deemed to be largely compliant with the first and third components of the Directive.
Since then, 2025 has seen:
1. Outcome of Legal Challenge to the Directive
In 2023, Denmark referred an application to the European Court of Justice (ECJ) seeking to have the Directive annulled in full or in part. Denmark submitted that that the key components of the Directive, as outlined above, directly interfered with the areas of pay and the right of association, which, under Article 153(5) of the Treaty on the Functioning of the EU (TFEU), are areas explicitly excluded from the scope of EU competence in social policy directives.
Denmark’s submissions were supported by a 2025 opinion of the Advocate General of the Court of Justice of the European Union (CJEU). In his opinion, the Advocate General recommended that the CJEU annul the Directive in full on the basis that it is incompatible with Article 153(5) TFEU.
On 11 November 2025, the ECJ issued the long-awaited decision on this matter. In Kingdom of Denmark v European Parliament and the Council of the European Union (C-19/23), the Court decided that Article 5(2) and part of Article 5(3) of the Directive interfered with pay determination. In particular, Article 5(2) was problematic as it imposed criteria on Member States for setting and updating statutory minimum wages, while the final sentence of Article 5(3) prohibited the use of automatic mechanisms for indexation adjustments where they lead to a decrease in statutory minimum wages. The Court annulled Article 5(2) in full and the final sentence of Article 5(3). The provisions relating to the framework for adequate statutory minimum wage levels within the EU were otherwise upheld.
The Court separately confirmed the validity of the provisions of the Directive regarding collective bargaining on wage-setting. The Court noted that while the right to associate is a prerequisite for the exercise of the right to collective bargaining, the relevant provisions of the Directive did not directly interfere with the determination of pay or the right of association within the EU.
2. Ireland’s Action Plan to Promote Collective Bargaining
The rate of Ireland’s collective bargaining coverage was last estimated by the OECD to be around 34%, well below the Directive’s threshold of 80%. In accordance with Article 4(2) of the Directive, Ireland was required to publish an action plan to promote collective bargaining before the end of 2025.
On 5 November 2025, the Department for Enterprise, Tourism and Employment (the Department) published Ireland’s Action Plan to Promote Collective Bargaining 2026–2030 (the Plan). The Department engaged with the relevant social partners, Irish Congress of Trade Unions and Irish Business and Employers’ Confederation, in preparing the Plan. It also considered the feedback received through the Department’s public consultation on the Plan, which closed in May 2025.
The Plan praises collective bargaining, when pursued voluntarily and in good faith, as “a strategic tool for building resilient enterprises and a more equitable society.”
While there are 22 action items listed in the Plan, the five items which are likely most relevant for employers are:
| Action Item | Timeline |
|---|---|
| The development, publication and dissemination of a new Code of Practice on Collective Bargaining | Work is ongoing |
| A review of the Code of Practice on Grievance and Disciplinary Procedures | Q2 2026 – Q1 2028 |
| A proposal to re-introduce tax relief for trade union subscriptions, which was abolished in 2011 | Q3 2025 – Q3 2028 |
| Exploratory research regarding the potential introduction of a pilot to include collectively bargained agreements as a weighting in public procurement projects | Q3 2026 – Q3 2029 |
| Exploring the use of alternative tax options to promote collective bargaining | Q3 2026 – Q3 2029 |
The Plan does not elaborate on the scope of the action items. As such, how they may impact the employer landscape is, as yet, unclear. Finally, nothing in the Directive or the Plan changes the position that employer recognition of a trade union for the purposes of collective bargaining in Ireland will remain voluntary.
Please contact Alicia Compton, Joseph Hewitt or your usual William Fry contact if you have any questions in relation to Ireland’s requirements under the Directive.
Contributed by: Ellen Hennessy
