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:
"Exempting startups from labour rights is a worse plan than the Barroso Commission’s failed Bolkenstein Directive.
“At a time when CEOs are paid over 100 times more than the average worker, collective agreements are needed now more than ever to ensure fair wages, working conditions, and benefits.
“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.
“The development of innovative companies must be based on an effective industrial policy with investments and social conditionalities. It cannot be built on the compression of rights and conditions for working people. This would also be contrary to the approach included in the Draghi Report.
“I am putting the Commission on notice today. If they continue with plans to undermine rights and collective agreements they are putting themselves on a collision course with the entire European trade union movement. Working people fought hard for these rights and we will fight to defend them with everything we have.”
The ETUC will remain vigilant to ensure that workers' rights are not undermined in any other areas of action outlined in the strategy, including with regard to potential measures on employee stock options for startups.
