IR Notes

On 5 February, the International High-level Expert Committee on Democracy at Work submitted its report to Yolanda Díaz, the Spanish Minister of Labour and Social Economy (see press release, executive summary and comprehensive summary). Some of what appears in the report on democracy at work will mark a milestone and should encourage debate, not just in Spain, but across the EU. This committee, chaired by Belgian sociologist Isabelle Ferreras, (see ‘A question for…’) was tasked with putting Article 129.2 of the Spanish Constitution – which describes the various forms of worker participation in a company, cooperatives and access for workers to owning the means of production – into practice. The Minister’s view is that the task of implementing this principle remains unfinished, as no legislation was subsequently passed to create any form of financial participation or employee representation on company boards (see IR Notes 247). The committee notes that Spain is “among the least developed countries in the European Union in terms of the recognition of workers as key constituents of the economy”. The report recommends “firm democratization” as a means of enacting the provisions of Article 129.2 and “opening a path for all labour investors”, i.e. workers, “to access voice and ownership”. As justification for the need to position citizens at the heart of a business, the experts provide “factual evidence and robust economic and political arguments to explain the necessity of public intervention in this direction”. While this article of the Constitution has something of a Marxist feel to it, the authors show that democratisation within a business can now offer a response that is more pertinent than ever to the many challenges posed by the Spanish economy, and to those inherent in one-legged capitalism, which serves only the interests of shareholders, while destroying the nine planetary boundaries one by one. In a country like Spain, where three quarters of its surface area is now at risk of desertification, the message is a highly pertinent one. The experts advocate tackling the situation in two ways. The first way is to strengthen workers’ voice, by introducing a co-decision right for workforce representatives, and ensuring that workers have a presence on company boards. The second one aims to make it easier for workers to access ownership of the means of production: by opening up the share capital of companies to their employees; by drawing up transition plans that will allow workers to acquire their companyʼs shares in anticipation of a founder or ownerʼs retirement; and by creating funds that will enable citizens to acquire shares. The authors argue that this would make “Spanish firms more resilient, and less dependent on extractive financial actors”. Furthermore, and this is an innovation in the report, echoing EU debates on revision of public procurement rules, the authors suggest creating a reporting tool – the Corporate Democratic Development Index – based on two scoring scales measuring workers’ access to the decision-making process and to capital. Depending on their level of democratisation, the score achieved by companies could be used by the authorities as an incentive-based mechanism, using the bonus/malus principle, to access public subsidies, corporate tax rates, fiscal benefits, privileged access to public procurement, etc. It is now up to the Spanish social partners to discuss these proposals, as promised by Yolanda Díaz, who is hoping for an agreement, failing which the Sanchez government will have to move forward on the basis of its commitment to legislate during this Parliament.

28th regime : On 20 January, by a large majority, MEPs adopted a series of recommendations relating to the European Commission’s proposal for a new legal framework designed to support businesses in the EU, commonly known as the “28th regime” (see European Parliament resolution, briefing and At a Glance). This regime involves creating the status of a Societas Europaea Unificata (S.EU) [‘unified European company’], which would apply to unlisted limited liability companies established in one of the 27 EU Member States. The registration of such a company would be an entirely digital process, so that it could be completed within 48 hours, with a minimum paid-up share capital requirement of just one euro. To attract and retain top talent at S.EUs, it is likely that employee stock ownership plans and employee stock options will be introduced. Parliament’s recommendations concerning the 28th regime for EU businesses look set to be included in a legislative proposal drawn up by the Commission, which is expected during the first quarter of 2026. In his report, MEP René Repasi (S&D) tries to limit the risk of reducing worker protection in the areas of labour law and rights relating to worker participation in company decision-making processes, where such rights exist. Although it was originally designed to facilitate the creation of EU start-up companies, the 28^th regime no longer seems to be subject to any limits in terms of company size. This change makes the European Trade Union Confederation very wary of this piece of legislation, which, in the Commission’s proposal expected on 16 March, might also impose a limitation on workers’ rights (see press release).

Subcontracting : On 12 February, the European Parliament is due to vote on the motion for a resolution on “addressing subcontracting chains and the role of intermediaries in order to protect workers’ rights”, presented by Johan Danielsson (S&D). The Committee on Employment and Social Affairs has already approved this by 35 votes in favour and 20 against. The text invites the Commission to “end abusive subcontracting and to protect workers’ rights, to strengthen transparency and accountability throughout the supply chain, and to consider introducing a well-defined regime for the joint and several liability of economic operators and subcontractors”. It also calls on the Commission to assess “the impact of public contracts being performed mainly by the successful tenderer’s direct workers and recommends that public procurement rules encourage companies to have sufficient in-house staff to implement the projects for which they are awarded public contracts”.

Restructuring : On 6 February, the European Commission announced a proposal to mobilise 3.7 million euros from the European Globalisation Adjustment Fund (EGF) to help 416 workers dismissed following the bankruptcy of the home decoration company Casa in Belgium (1.9 million euros) and 420 workers dismissed by the motorcycle manufacturer KTM in Austria (1.8 million euros) (see press release).

Quality jobs : The European Commission has received replies from the main European social partners to the first phase consultation on the Quality Jobs Act, launched on 4 December (see IR Notes 264). The proposal for a job quality directive is due to be presented by the year end, following a second phase consultation with European social partners, under Article 154 TFEU. These partners are clearly divided in their contributions. On the one hand, the European Trade Union Confederation (ETUC) is calling for binding legislation on all topics covered by the consultation: algorithmic management and artificial intelligence in the workplace, protection against psychosocial and ergonomic risks in the workplace; the right to disconnect; abusive subcontracting practices; a just transition with the creation of a personal training entitlement, etc. (see ETUC reply). Moreover, having had its fingers burned in 2023 by the breakdown of cross-industry negotiations on telework and the right to disconnect, the ETUC rules out the idea of reaching any negotiated solution with European employers’ organisations, as it “does not consider that the necessary conditions currently exist to initiate a dialogue.” Although the issues raised by the Commission are widely recognised, the employers, for their part, believe that the solutions required are completely different from those advocated by the ETUC. The employers’ organisation BusinessEurope rejects the idea of a purely legislative approach – other than for the purpose of simplifying the existing legislation (see contribution). It advocates non-binding initiatives for all topics tackled in the consultation, and calls for the existing rules to be applied properly: “the answer lies in strengthening labour inspectorates and other relevant players” to deter “fraudulent activities and potential abuses through enforcement”. Moreover, taking the opposite view to the ETUC, BusinessEurope explains that it is ready “to further explore the possibility of initiating a social dialogue on one or several of the issues mentioned in the consultation document”. Both SGI Europe (reply) and SME United (reply) also leave open the possibility of negotiation between European social partners, which could be incorporated into the multi-annual work programme currently under preparation.

Working hours : The CDU party, led by Chancellor Friedrich Merz, wants to revise working hours legislation and to restrict workers’ rights in the area of part-time working. Since 2001, companies with more than 15 employees have had to agree, subject to certain conditions, to requests for shorter working hours submitted by employees who have at least 6 months’ service. The Chancellor’s party wants to limit this piece of legislation to particular situations, such as childcare and vocational training. This initiative has been criticised by some trade unions, including the DGB Trade Union Confederation and IG Metall (see press release). It marks a change of direction in the country’s employment policy, and aims to get Germans back to work, through longer working hours and clamping down on abuses of sick leave.

Democracy at work : The Conservative government is launching a public consultation on legislative amendments aimed at increasing board‑level employee representation. The government wants the regulation on board-level employee representation to apply to companies with at least 100 employees, rather than the current figure of 150. “We want employees to have a stronger voice in Finnish workplaces”, says Minister of Employment Matias Marttinen, who believes that the measure “will bring as many as 100,000 additional employees within the scope” of the regulation on board-level employee representation. He emphasises that “companies that already have this type of employee representation report mostly positive experiences” (see press release).

Retraining : Following the enactment of Law no. 2025-989 of 24 October 2025 transposing domestic cross-industry agreements to promote the employment of experienced workers and relating to the evolution of social dialogue, the “retraining period” scheme entered into force on 1 February 2026 and replaces the previous schemes covering “Collective transitions” and “sandwich courses for retraining or promotion”. The new scheme is open to all employees who are seeking mobility inside or outside their company, with a view to gaining certification or skills, and it can also operate at the employer’s initiative. Two decrees were published on 28 January 2026, to clarify certain points of the legislation, notably regarding its implementation and funding.

Employee monitoring : The data protection authority has prohibited the UK transport company Arriva from continuously filming its bus drivers, by reminding all road transport companies operating in the passengers or goods sectors, of the principles governing use of CCTV (see press release). CCTV can be used for security purposes, but not to monitor employees. The CNV trade union welcomes this decision and calls on its members and other companies to carefully re-examine their rules governing CCTV use (see press release).

New family leave arrangements : On 1 January, the Labour Code was amended by Law 406/2025 on help for dependants (see press release). The text broadens leave entitlements to include employees who are encountering “major personal obstacles in performing their work duties”. For example, an employee is granted seven days of leave per year to accompany a child who is aged under 15 and attending medical examinations or appointments at institutions for children or pupils with disabilities. The law also grants a further seven days of leave, which can be taken cumulatively with the first seven days, to employees who are single parents accompanying a family member, including a child, undergoing examinations or treatment at a healthcare establishment in the event of a sudden illness or accident, or attending a specialised institution for children or pupils with disabilities.

Older workers : On 26 January, the Spanish textile group Inditex and its EWC signed a joint statement on the measures necessary to address the employment of middle-aged people and support age diversity. The text highlights eight objectives or measures that could be adopted to take “the work and professional experience of those who make up their workforce, and especially its older members” into account more effectively. These measures include a desire to tackle ageing-related risks “using a global approach, including both physical and psychosocial aspects”, and a commitment by the group to evaluate, at “local level, and taking account of the characteristics of each market, ways of adapting the jobs of people whose abilities have been affected by ageing, where this has a significant impact on how they carry out their duties”, e.g. by making changes to their working hours or working day.

Restructuring : The European management of steelmaker ArcelorMittal has announced a new plan involving the massive relocation of support functions, which will put at risk 5,600 jobs in 20 countries, even though a similar plan is still ongoing, according to a statement issued by the EWC, following an extraordinary meeting held on 29 January, via videoconferencing. “This decision constitutes a new frontal attack on European workers, without any assessment or evaluation and without consideration for the human, social and industrial consequences”, says the statement, with particular reference to workers employed by the company’s subcontractors. Workers’ representatives are demanding an immediate halt to any further relocations until the first wave has been completed and evaluated; retention of key skills, particularly IT skills, in Europe is “a genuine European industrial strategy that respects jobs and workers”. EWC secretary Jean-Luc Ruffin expresses doubts about the legal validity of the information-consultation process, which looks more like a consultation on a framework, paving the way for a series of restructurings, without the matter having to be referred back to the EWC for consultation.