The Commission wants to exclude small businesses from working environment rules

The EU Commission also wants to put political pressure on member states' governments to make sure the EU’s minimum rules in reality turn into maximum rules. The proposal means an about turn of EU’s social policies.

As a result of the economic crisis, the EU is to an increasing degree getting involved in areas which so far have been considered to be national issues. In 2010 the EU Commission was given powers to present views on wage formation in a way which previously would have been unthinkable. The latest initiative was presented during the summit of heads of state and governments at the beginning of December 2011.

In the report ’Minimising regulatory burden for SMEs - Adapting EU regulation to the needs of micro-enterprises’ the Commission proposed that all new EU legislation should make all small and medium sized businesses exempt from the law, unless it is proven that it is necessary for them to be included. If the latter is the case, solutions should be found which are more suited to these businesses and which represent less of a regulatory burden. The report also lists many examples of existing rules for which the Commission wants to make smaller businesses exempt.      

It is important to note that according to the report small and medium-sized businesses make up 99 percent of all companies and represent more than two thirds of all private sector employment. Out of these, 92 percent are so-called micro companies with fewer than 10 staff. Even if exemptions were made only for these companies, it would still affect a lot of workers.

Many EU rules are extremely complicated and it is of course good if those which are not needed are abandoned. 

Reactions to the report, however, show it could be difficult to reach agreement on which rules are unnecessary. The report covers all types of legislation, but trade unions both on an EU-wide level and in the Nordic region are worried that the Commission is targeting legislation linked to workers’ rights - most notably legislation on health and safety at work. Nearly half of the Commission’s examples of regulations which can be loosened up belong here. The general view in the Nordic countries is that employees in small companies should have the same protection as other employees. 

Yet even if the proposal becomes reality, the Nordic countries would not be obliged to implement it, because the EU’s labour standards are always minimum rules. It is clearly stated in the EU treaty that member states can keep or introduce more far-reaching protective measures. So to ensure the proposed strategy is efficient, it will not be enough to introduce special rules for small businesses on an EU level. Therefore the strategy’s second stage is to execute political pressure to prevent member states from engaging in so-called gold plating. The Commission will publish an annual 'scoreboard' which will show which member states go beyond the EU’s minimum rules, a kind of tacit criticism. The Commission will also work with the member states to help them, as it writes, refrain from introducing stricter requirements than the EU legislation does.

So what happens now? According to the summit’s press release all heads of state and governments supported the report. But if there actually is to be any exemptions for small businesses through for instance different working environment directives, the Commission must first of all present a concrete proposal for changes which later must gain a sufficient majority in both the Council and in the European Parliament. The fact that the prime ministers of Denmark, Finland and Sweden supported the report does not necessarily mean they are prepared to abandon the Nordic tradition on working environments. Sweden’s minister of enterprise is indeed a driving force behind the EU’s work to simplify regulations for businesses, but this covers all kinds of legislation. And the word from the Swedish Ministry of Labour is that working environment legislation will continue to protect employees in small and large businesses alike.