The European Commission has failed to deliver on its promise to safeguard workers’ rights in its ‘EU Inc’ proposal to allow companies to operate under EU-wide rules.
In response to concerns raised by the European Trade Union Confederation (ETUC), the European Commission maintained workers’ rights would be fully protected as part of the regulation, also known as the ‘28th company regime’.
However, the draft of the proposed regulation published by the Commission today does not include legal provisions to prevent 28th companies from:
- Refusing labour inspections;
- Avoiding national labour law and collective bargaining agreements;
- Replacing guaranteed wages or employment contracts with stock options;
- Ignoring workers’ rights to information and consultation in restructuring processes;
- Undermining workers’ right to board-level representation;
- Avoiding social security payments and national tax.
The ETUC is calling for the proposal to be redrafted so that it matches the stated intention of the Commission not to damage employment rights. The intention not to have a detrimental effect on employment rights needs to be backed by clear legal provisions guaranteeing it.
The ETUC is undertaking a thorough analysis of the Commission proposal and will put forward its in-depth assessment in the next few days.
ETUC General Secretary Esther Lynch said:
“Working people were promised their rights would be ‘fully protected’ but those protections are nowhere to be seen in the regulation. Instead, this plan still risks creating loopholes that would allow employers to avoid the most basic workers’ rights like guaranteed rates of pay.
“Europe should safeguard and not undermine its well-crafted systems of national employment, social and company law defined over decades of workers collective action and responsible law-making.
“Making it easier to do business across borders is an entirely legitimate goal. But, in the way it is written, this proposal seems to assume all actors are good. Not only is that dangerously naive, but it would also fail a basic legal exam.
“Bad faith actors will use any opportunity to try to dodge labour law, collective bargaining agreements, tax and social security contributions in countries where they employ workers. And this proposal creates many.
“If that model worked, then the Commission would not have had to regulate the platform economy. It is not only wrong in principle but would undermine efforts to create a more competitive economy, which is currently being plagued by labour shortages linked to low pay and conditions.
“Simplification cannot be an excuse to unpick the European social model. Without proper safeguards, this proposal risks ending up as a reheated version of the doomed Bolkenstein directive.”