🏠 Home
<aside> Pillar 4. EMPLOYMENT
This section outlines the key principles for addressing employment matters and proposes a balanced approach to employee involvement in the context of EU-Inc operations.
<aside>
‣ Applicable Law and Current Dilemma
In the context of EU-Inc, Member States shall retain autonomy in matters of employment law. The EU-Inc’s purpose is to offer, among other factors, simplicity in its formation, and a predictable set of rules for governance and the relationship between shareholders and the board. It is not the purpose of the EU-Inc to derogate national laws, reduce fundamental rights, or serve as a mechanism for entities to sidestep compliance and obligations. As such, the EU-Inc should be subjected to the employment law of the country in which it operates, and in the event the entity has cross-border employees, those employees should be protected by the employment laws of their respective countries.
The challenge arises when modern companies, particularly high-growth start-ups, must act quickly in fast-paced environments to capitalize on business opportunities, raise capital, or pivot strategically. In such dynamic settings, extensive regulatory requirements related to employee participation and governance can introduce delays, potentially impeding timely decision-making.
This is especially true when complex processes are needed to ensure compliance with various employment laws. Therefore, the approach outlined in Section 2: “Approach to Employee Participation” seeks to strike a balance by promoting effective employee engagement that aligns with the principles set out in Article 27 of the EU Charter while maintaining flexibility for companies to operate efficiently and adapt swiftly to changing market conditions.
</aside>
To achieve a balance between efficient decision-making and employee involvement, in line with Article 27 of the EU Charter, we propose a Tier 1 approach. This approach prioritises no automatic board-level participation while incorporating the following principles:
<aside>
Example
EU-Inc “ABC” is a growing business operating across several EU member states. Originally a small family-run company, it now employs 500 people and generates a significant annual turnover.
Scenario 1: Reaching the Consultation Threshold
ABC’s management values both employee engagement and efficient decision-making at the board level. Under the proposed Tier 1 approach, formal employee consultation is required only once the company surpasses the agreed upon thresholds (e.g. employee headcount, revenue, etc.).
At this point, a consultative committee of employee representatives would be formed to advise on major decisions like investments and strategic changes. While the consultation is non-binding, the board would give careful consideration to employee input.
Scenario 2: Smaller Companies Below the Threshold
Before reaching these thresholds, ABC engages with employees informally, through newsletters, town halls, and occasional surveys, without the need for formal consultation. As the company grows, it recognizes the need for a more structured approach and follows the threshold guidelines for when this becomes necessary.
Benefits
Conclusion
This approach ensures that consultation is meaningful and proportional to company size. ABC can maintain efficient decision-making while respecting employees' right to be informed and consulted as the company expands, balancing business needs with worker involvement.
</aside>
Next: FAQ & Glossary
</aside>
<aside>
Got feedback?
</aside>