All opponents of the single-member private limited liability company achieved a first important partial victory this week. Almost all political factions in the Employment Committee of the EU Parliament voted with a clear majority against the proposal of the EU Commission. Such a clear outcome could not have been expected some months previously. Only constant pressure, substantiated by strong arguments, made the EU Parliament reconsider. Right from the start, the Chamber of Labour has been and still is an opponent and will continue to do everything in its power to prevent this proposal from seeing the light of day.

EU Parliament will not compromise

Almost to the day a month ago, the Member States had agreed on a compromise concerning the “Single-member private limited liability company”; we wrote about this in our AK EUROPA Newsletter. Even then, it became obvious that the negotiated compromise had not been built on a solid foundation. This has now been impressively confirmed by the Employment Committee of the EU Parliament, which concluded after long and intensive negotiations that the corporate form, newly proposed by the EU Commission, would not provide any added value for Europe. What is surprising and positive at the same time is the fact that a broad front right across the political spectrum has come out against the proposal. This must be seen as a positive sign for further negotiations.

Wage and social dumping must be prevented

The EU Commission is also committed to the fight against wage and social dumping. However, if it would take it seriously it would withdraw the proposal on the single-member private limited liability company as soon as possible. It is even apparent to non-experts that for example the separation of a corporation's registered and administrative office, as requested by the EU Commission, would fuel the temptation to set up one’s company in an EU Member State where the lowest standards of protection exist. There must be no competition for the lowest standards in the EU; however, the proposal by the EU Commission would achieve exactly that.

EU Parliament’s final decision not before February 2016

The partial victory in the Employment Committee of the EU Parliament was only the start of a hitherto successfully organised campaign. Now it is the turn of the Legal Committee responsible to come to a decision. The original intention was to vote on its position in September. However, the way things stand now it looks as if the schedule cannot be met and that the vote will only take place in November. The plenum of the EU Parliament will finally make its position clear in February 2016. This means that the EU Parliament will have to continue working very hard to ensure that the proposal by the EU Commission will get a first class funeral.

Further information:

AK EUROPA Position on SUP