Hundreds of workers and their trade unions from across Europe demonstrated in Brussels last Thursday against the controversial ‘EU Inc’ law. They are concerned that the law - based on the European Commission’s claims that “innovative” companies struggle to operate across member states because of differing tax, labour and company rules - would allow companies to tackle these hurdles by opting out of national labour standards.

“This proposed legislation will set workers back 100 years,” argued UNI Europa regional secretary Oliver Roethig. “There is nothing innovative or progressive about handing companies a way to bypass labour laws, collective bargaining agreements, union rights and social protections that were all hard fought for.” 

Oliver’s team explained the thinking behind this claim, citing a small Danish company paying Danish wages and taxes, already struggling to compete with large competitors’ economies of scale. Under the proposed legislation, it is believed that large organisations could, potentially, opt out of national labour standards and pay lower ‘European’ wages instead. Unfair competition would deepen and pressure to cut local workers’ conditions would follow – with companies gaining new EU-level rights that workers won’t get in return, since no European ‘right to strike’ exists. The unions claim that this proposed law would create an entirely new set of rules independent of any member state – a ‘28th regime’ if you like, as if a virtual 28th EU country existed.

A legal analysis by the European Trade Union Institute found that the law could let companies register in member states with low social standards while their workers are employed elsewhere; offer stock options instead of wages or an employment contract; sidestep co-determination and board-level worker representation; avoid obligations to inform and consult workers on decisions, and fast-track liquidations in ways that could leave wages unpaid.

European Trade Union Confederation general secretary Esther Lynch warns that allowing this kind of ‘regime shopping’ would “inevitably start a race to the bottom in pay and conditions across the continent”. The unions are calling for the law to be rewritten with real safeguards or be scrapped entirely, saying that the Commission has neglected to build in binding protections against misuse. They want EU institutions to adopt a strong ‘Quality Jobs Act’ that tackles the real problems facing today’s workforce. 

The way I see it, this legislation – its pros & cons, the thinking behind it and how it could pan out in reality - isn’t just about those ‘at the sharp end’ of our sector, such as cleaners working for global contractors, but something that could affect every part of it, such as manufacturing, distribution and even equipment servicing centres. I like to think that companies automatically look after their workforces, but this isn’t always the case, is it? What are your thoughts on this proposed law? Are the unions wrong to oppose it or are their concerns justified?