On 26 June 2025, national leaders “welcomed” two European Commission proposals on the Single Market Strategy and its Start-up Strategy. UNI Europa, together with the European Trade Union Confederation (ETUC), is particularly concerned about the introduction of a so-called “28th regime” for companies that risks undermining national labour standards.
Faced with the complexity of navigating 27 different national frameworks for taxation, labour and company law, the Commission proposes a new regime that – like an extraterritorial, virtual 28th member state – would offer a single, uniform set of rules.
However, this “28th regime” would effectively allow firms to sidestep national legislation won over decades by workers and unions. The result would not be fair competition based on quality, innovation or service – but a regulatory loophole race, with potentially devastating consequences for European workers’ social protections.
This risk is particularly acute in the services sector, where labour costs are substantial. The proposed regime could institutionalise legal arbitrage, incentivising companies to choose the most beneficial rules. Such “regime shopping” is likely to trigger a race to the bottom in both individual and collective workers’ rights.
Oliver Roethig, Regional Secretary of UNI Europa, said:
“The Commission’s Start-up and Scale-up Strategy revives a dangerous 20-year-old idea. At that time, EU Commissioner Frits Bolkestein wanted to enable companies to provide services in other EU countries under the working conditions of their country-of-origin, which would have led to massive social dumping. Instead of country-of-origin standards, the introduction of a ‘28th regime’ is now being proposed. This would be a kind of virtual, extraterritorial 28th Member State, which would allow some companies to circumvent national labour relations systems and thus create second-class labour legislation. This is totally unacceptable. We call on the Commission to exclude labour and social legislation from its strategy. Otherwise, the European trade union movement will bring hundreds of thousands of people onto the streets, just as we did when we defeated the Bolkestein Directive.”
Esther Lynch, General Secretary of the European Trade Union Confederation, said:
“National leaders are storing up big trouble for themselves at home by waving through Commission plans which would fundamentally undermine their own country’s labour law. “Including labour law in any 28th regime would allow rich tech-bros to completely ignore the rights to fair pay and decent conditions which workers have won at national level over the last century.”
Read Oliver Roethig’s op-ed on the 28th regime in EU Observer.