The European Commission has put itself on course for failure by pressing ahead with plans to undermine collective agreements and workers’ rights.
The ‘Startup and Scaleup Strategy’, published today, signals plans to attack collective bargaining and curtail labour law through the introduction of a ‘28th regime’, by allowing startups to opt out of national labour law and instead operate under lower EU-wide standards.
The strategy includes the objective of “reducing the cost of failure” and takes aim at “insolvency, labour and tax law”. Such an attack would only protect the wealthy backers of startups at the expense of workers at a time when their livelihoods are at risk.
The European Trade Union Confederation (ETUC) is raising the alarm that this is an unfair burden on workers and it would:
- Make workers’ pay the cost for the startup strategy and leave them without adequate protection, especially in redundancy, closure and restructuring situations.
- Undermine the whole idea of a level playing field by allowing start-ups to bypass collective agreements creating unfair competition by favouring startups that refuse to negotiate.
- Create a race to the bottom by exempting startups, which will incentivise a broader erosion of labour standards across industries, as more companies will be forced to jump on the bandwagon or to lobby for similar treatment.
- Discourage responsible business practices – startups that operate within the same sectors as larger firms must have the same obligations as other employers – not be given a free pass.
The measures proposed would go against the EU Treaties, which guarantee rights and protections for workers, including in restructuring and redundancy situations.
The idea of reducing workers’ rights is inconsistent with the recognition in the strategy that labour shortages are tied to the need to create quality jobs. In addition, for the Commission to be serious about making remote work a success – as it calls on startups to do in this strategy – it must urgently bring forward a directive on telework and the right to disconnect.
Esther Lynch, General Secretary of the European Trade Union Confederation, said:
“The Commission’s move would undermine decades of democratic law-making at national level by creating an escape route for some corporations. Exempting startups will lead to exploitation and underpayment of employees, especially in early stages when startups are likely to prioritise cost-cutting over worker welfare. Just because a company is categorised as a startup doesn’t mean it should be able to evade its responsibilities as an employer. Instead of exempting startups from collective agreements that ensure job security as well as fair pay and conditions, the Commission should be promoting quality jobs covered by a collective agreement.”
Oliver Roethig, Regional Secretary of UNI Europa, told the German wire service RND:
“The Commission’s Start Up and Scale Up Strategy is reviving 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 home country, which would have led to massive social dumping. Instead of home country 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, as we did when we defeated the Bolkestein Directive, we will bring hundreds of thousands of people onto the streets.”