A proposal by the European Commission intended to simplify business creation across the European Union is drawing growing criticism from trade unions and labour rights advocates, who warn that it could weaken workers’ protections and undermine the principles of fair and inclusive employment.
Presented on 18 March 2026, the proposed EU Inc framework would allow companies to establish themselves under a single European legal structure, making it possible to register a business online within 48 hours for less than €100. While the initiative is promoted as a way to encourage innovation, reduce bureaucracy, and strengthen Europe’s competitiveness, critics argue that it fails to address the real challenges faced by businesses and may come at the expense of workers’ rights.
A Simpler System, but at What Cost?
The European Commission describes EU Inc as a voluntary legal framework that would enable companies to operate across all EU Member States under one set of corporate rules.
However, according to industriAll Europe and other trade union organisations, the proposal risks creating opportunities for companies to choose the Member State with the least demanding labour regulations while operating elsewhere. This practice, often referred to as regulatory or social shopping, could encourage social dumping, weaken collective bargaining agreements, and create unfair competition between workers across Europe.
For organisations advocating for diversity and inclusion, this raises an important concern: when labour protections are weakened, vulnerable groups—including people with disabilities, migrant workers, women, young employees, and other underrepresented communities—are often the first to experience the negative consequences.
Risks for Fair Employment
Trade unions also warn that the proposal could make it easier to establish so-called «letterbox companies"—businesses that exist legally in one country while carrying out their activities in another.
This could make it significantly more difficult for labour inspectorates, trade unions, and public authorities to enforce employment laws, monitor working conditions, and protect workers from exploitation.
In addition, experts have expressed concerns that the combination of rapid online registration, minimal capital requirements, and reduced oversight could increase the risk of financial abuse, including tax avoidance, money laundering, and social fraud.
Collective Rights Could Be Weakened
One of the strongest criticisms of the proposal is what it does not include.
The current framework contains no binding safeguards for:
- collective bargaining,
- trade union rights,
- employee consultation,
- worker participation in company decision-making.
According to labour organisations, this omission could allow companies to bypass stronger national systems of worker representation by registering in countries with weaker participation requirements.
This would challenge one of the foundations of the European social model: workers’ rights should follow the place where the work is actually performed, not simply where a company is legally registered.
Inclusion Means Protecting Everyone at Work
From a diversity and inclusion perspective, employment is about more than access to jobs—it is about access to fair, secure, and dignified working conditions.
Inclusive labour markets depend on strong legal protections that apply equally to all workers, regardless of their background, gender, disability, ethnicity, age, or migration status. Weakening these protections can disproportionately affect those who already face barriers to equal opportunities.
Trade unions argue that Europe’s industrial future should instead be built on:
- investment in innovation and sustainable growth,
- support for businesses during critical stages of expansion,
- quality employment,
- skills development and lifelong learning,
- effective enforcement of labour standards,
- meaningful social dialogue,
- and strong worker participation.
Innovation and Social Rights Must Go Together
Judith Kirton-Darling, General Secretary of industriAll Europe, argues that Europe should strengthen—not weaken—its social model.
A competitive economy, she says, should not rely on reducing workers’ rights. Instead, innovation and economic growth should go hand in hand with social protection, fair employment, and inclusive workplaces.
As discussions around the EU Inc proposal continue, many organisations are calling on European policymakers to ensure that any future corporate framework supports both economic competitiveness and the fundamental rights of workers.
For advocates of diversity, equity, and inclusion, the debate is about more than corporate regulation. It is about ensuring that Europe’s future economy remains one where growth, innovation, and human rights advance together, leaving no worker behind.
