EU: Parliament calls for law to limit subcontracting

EU Parliament urges tough subcontracting laws, while employers warn against complexity and overregulation. Legal study recommends enforcing existing labour protections, not blanket restrictions

The key points: The EU Parliament's Employment Committee is pushing for legislation to regulate subcontracting, citing abusive chains and calling for joint and several liability throughout subcontracting layers. However, an independent legal study, commissioned by the European Employers' Institute, warns that restricting subcontracting risks legal complexity and fragmentation across industries. The study advocates stronger enforcement of existing labour protections rather than new blanket subcontracting restrictions.

Why this matters: Balancing worker protections with market competitiveness is a delicate political and economic issue. Subcontracting is a common practice across many sectors, and overly restrictive legislation could disrupt business operations, particularly for small enterprises, potentially affecting employment and economic growth. 

What might happen next: Political pressure for subcontracting regulation may increase, but the legal complexities and business pushback are likely to temper the approach. The focus may shift toward strengthening labour inspection and enforcement rather than imposing new limits on subcontracting arrangements.

The HRPG Europe view: You can write all the legal analysis you like, but, in reality, this is a political decision. Should it be the job of legislators to tell the European private sector how it should organise the way it does business? In our view, the answer is, no, it should not. If the concern is to protect workers’ rights, then take steps to protect those rights as defined within the law as it stands, and collective agreements where they exist. Workers’ rights are workers’ rights, no matter who they are employed by. Strengthen labour inspectorates. Robustly enforce existing laws. But leave business to organise how best to do business. 

Within recent months, we have seen various laws, such as CSRD and CSDDD, being recalibrated through “Omnibus” initiatives, a tacit acceptance of legislative overreach. Best not to repeat the legislative overreach mistake with an ill-judged attempt at telling business how to organise itself. 

ADDITIONAL INFORMATION:

You can find the EEI report here. 

Delphine Rudelli, Chair of the Board of the EEI. 

“This legal analysis provides a crucial perspective on the challenges of further regulating subcontracting. The risks to the well-being of workers where these exist are a critical issue that must be addressed, but the solution lies not in blanket restrictions on subcontracting. Such measures could have serious consequences for businesses, especially small ones, and therefore for the jobs that their economic growth helps to create. Existing labour protections should be enforced more effectively, and where necessary, the role of labour authorities must be strengthened to ensure compliance. We must focus on a balanced approach that protects workers’ rights while maintaining the competitiveness of the EU’s internal market”