The European Trade Union Confederation (ETUC) calls on Commissioner McGrath to rethink the approach to the 28th Company Regime following the European Parliament’s important recognition of the serious challenges and risks it presents, as reflected in the Repasi report voted today in plenary.
The report rightly highlights both the substantive dangers and the significant technical difficulties involved in creating a parallel EU-wide company regime, particularly where it could be used by unscrupulous employers to undermine national labour law systems, collective bargaining and worker board-level representation frameworks.
The crucial role of labour inspectorates also risks being compromised. The ability of national inspectors to fulfil their role in detecting, inspecting and litigating cases of abuse will be impeded by the creation of a parallel structure. This risks rewarding the worst types of US-style corporate exploitation, and undermining those employers whose constructive dialogue with unions deliver quality jobs in Europe.
ETUC General Secretary Esther Lynch said:
“The Parliament is right to recognise that a 28th Company Regime raises profound legal, social and economic risks. Europe’s competitiveness challenges cannot be solved by creating new legal uncertainty or loopholes that will undermine fundamental rights and representation.
“Too often, start-ups offer insecurity and call it opportunity. Calls from some quarters to replace proper pay and employment protections with share options should not be listened to. Most start-ups do not become unicorns and workers must not be the ones left to pick up the tab whenever a business gamble fails.
“All the research shows that innovation is strongest in member states with strong collective bargaining. This shows the need to build on Europe’s rich heritage of collective bargaining, of social dialogue and of national labour legislation that deliver solutions for workers and employers alike.”
ETUC Deputy General Secretary Isabelle Schömann added:
“The technical complexity of aligning a new company regime with 27 national labour law systems should not be underestimated. Experience shows that poorly designed company law instruments are quickly exploited to avoid workers’ rights.
“Before considering new legal forms, the EU should focus on closing loopholes in existing legislation such as in the SE directive on limited-liability companies, where over 67% of all existing European SE Companies are empty shells, used to circumvent company governance rules and workers protections.
“The EU should furthermore ensure full respect for and compliance with national labour law, worker information, consultation, participation rights and collective bargaining. This would require proposals for an EU framework on information, consultation and participation applicable to European company forms and to companies making use of EU company law instruments enabling cross-border mobility.”
