European Parliament approves measures to protect workers and crackdown on letterbox companies in the EU
Date
18 Apr 2019
Sections
Social Europe & Jobs
The European Parliament today backed new rules governing how companies relocate offices between EU member states. The S&D Group ensured that these new rules will stop companies artificially moving to another member state to avoid taxes or social legislation.
S&D MEP and chief-negotiator for the European Parliament for the company mobility rules, Evelyn Regner, said:
“For the first time the EU will have a clear procedure for companies to follow when they want to move into another member state. When companies expand to another member state for genuine economic activity, this can boost growth and create new jobs. However, too often companies only artificially move their headquarters to find lower labour protections or tax rates. The rules we have backed today will help crackdown on this type of abusive behaviour.
“We ensured that workers will be fully informed and consulted in every step of the procedure whenever a company wants to move offices to another member state. We also ensured that their participation rights would be better protected in all cross-border operations covered by this new law: conversions, mergers and divisions within the single market. If a company attempts to merge or relocate, then workers must have their rights protected.
“These new rules will mean that companies involved in fraudulent or abusive practices circumventing national or Union law on for example employee rights, taxation or social security, will not receive the necessary certification to finalise a cross-border operation. On the other side, the law creates, for the first time, legal certainty for companies using their right for freedom of establishment.”