Unions rally against new ‘EU Inc’ race-to-bottom on labour laws and pay

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The EU’s attempt at innovating its start-up sector may mean that a worker in Belgium will receive Bulgarian labour rights and salary (Source: M0tty)

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By Gaia Neiman,
Brussels
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The EU is hoping to ease business expansion across the single market – but Europe’s unions worry about the price this will carry for labour rights and remuneration if employers can choose to register their business thousands of kilometres from where their workers are based. 

The 28th Regime, also known as ‘EU Inc’., was initially expected to facilitate the expansion of small-scale businesses and start-ups across the bloc, but is now being expanded to affect any EU-based enterprise.

As European Council ministers gather to discuss the competitive regulation on Thursday morning (24 September), a rally of European trade unions are expected to assemble outside to call for safeguarding measures for labour rights in the new policy. 

The European Trade Union confederation (ETUC) is leading the chase, as they fear the policy will open a regime-shopping loophole wherein companies could choose to change their country of registration to a member state hosting “a lower minimum wage and weaker collective bargaining, and employ their workers on lower conditions.”

According to ETUC’s general secretary Esther Lynch, the regulation could be a tipping point to “start a race to the bottom in pay and conditions across the continent.”

Joined by Belgian unions such as Synova and the confederation of Christian Trade Unions, ETUC is expected to mobilise around 5,000 workers to demand the incorporation of workers’ rights in the new regulation. 

A legal analysis of the policy by the European Trade Union Institute (ETUI) found that EU Inc. would allow companies to avoid obligations to consult workers on decisions, move its registered headquarters to member states with low labour standards even when workers are elsewhere, offer stock options in place of wages or an employment contract, or ease fast-tracked liquidations that could leave sacked employees with unpaid wages, and which social security authorities have no time window to examine.

All from with the ease of a standardised online form that can achieve registration in 48 hours, under the guise of facilitating greater foreign investment. 

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The EU's attempt at innovating its start-up sector may mean that a worker in Belgium will receive Bulgarian labour rights and salary (Source: M0tty)

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Gaia Neiman is a migration and politics reporter at EUobserver. She has previously written for Reuters, The Guardian, The Telegraph, among others.

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