EUCDW rejects weakening of labour standards through SUP

The proposal for a single member private limited liability company, or Societas Unius Personae (SUP), has already generated a lot of discussion. More than a year ago, the European Commission, then still led by José Manuel Barroso, launched a proposal to harmonize the rules on the establishment of single member private limited liability companies, a proposal that entails major risks for workers’ rights.

As Europe is gradually returning to sustainable growth, we need a positive environment for economic investment, innovation and entrepreneurship in order to create qualitative and future-proof jobs. Thereby we must pay particular attention to Small- and Medium Enterprises (SME’s), which are the backbone of our economy in terms of job creation. The promotion of entrepreneurship and the strengthening of the Internal Market are of course of central importance to secure growth – but it should never lead to a weakening of our social standards.

The proposal on the SUPs creates a risk exactly with regard to this point: workers’ rights would be challenged, opening the door to unfair competition and social dumping. Therefore, EUCDW cannot accept the proposal in its current form. What we need is a proposal that corresponds with our high social and fiscal standards and that protects the right to co-decision of employees. We want companies to register in the member state where they actually carry out most of their activities – not anywhere else. Simplified registration of companies is actually not a problem. But we have to guarantee that the identity of the company founder can be determined at any time, in order to prevent that letterbox companies use this system to their advantage.

At the same time, we have to maintain both employees’ and creditors’ protection in case of a default of the company: a so-called ‘minimum-capital requirement’ of only one euro would be a real step backwards.

Competition and social justice must go hand in hand in Europe: that is the foundation of the social market economy for which EUCDW has always been advocating. EUCDW, together with the support of the EPP colleagues in the Parliament, has already ensured the rejection of the proposal in the Employment and Social Affairs Committee. Now we are working hard to reach a similar result in the Committee on Legal Affairs, which is in the lead, after the Summer.