Last week the European Commission published draft legislation which would create new rules for companies operating in the EU, declaring that the proposals will make it ‘easier to do business’ in the EU.

The proposals, which are being referred to as ‘EU Inc’ and had previously been known as the ‘28th Regime’, simplify both the incorporation and insolvency processes for companies based in the EU. 

Prior to its publication the Commission had reassured trade unionists that the new rules would not damage employment rights, however the European Trade Union Confederation (ETUC) has reacted with concern, underlining that there is a lack of clear legal provisions protecting employment rights within the proposals. 

General secretary of the ETUC, Esther Lynch said the proposals should be redrafted as the European Commission had “failed to deliver” on its promise to safeguard workers’ rights.  

She said: “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, and social and company law, defined over decades of workers’ collective action and responsible law-making.”

The ETUC highlighted that the draft of the proposed regulation does not include legal provisions to prevent 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; or avoiding social security payments and national tax. 

Esther continued: “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.”  

“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.” 

At a recent protest in Cork, Irish unions gathered to express their concerns about the draft legislation. Director of campaigns in Fórsa, Kevin Donoghue said: "These proposals could allow companies to pick and choose a special EU rulebook, allowing them to dodge European and national labour law and collective agreements."

"That would mean that companies could operate in Ireland but not fully respect the standards that trade unions have fought for, weakening collective agreements, and eroding protections that generations of trade unionists fought hard to win."

"We also strongly reject the idea being presented that workers’ rights stand in the way of innovation. This proposal has the potential to carry very real dangers for workers’ rights and trade unions.  We will be organising on this issue in the months ahead and will keep members informed.” 

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