Unions say the Brussels plan to make it easier to start businesses across Europe could undermine national labour rights and standards.
Hundreds of trade union activists gathered outside the EU institutions in Brussels on Thursday to protest against EU Inc, a planned law designed to make it easier and cheaper to set up and run businesses across Europe.
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The European Trade Union Confederation (ETUC), which organised the protest, argues that the proposal threatens worker rights by allowing companies seeking a lighter corporate regime to circumvent national labour laws and social standards.
"The text contains no binding requirement to adhere to collective labour rights: no effective safeguards protecting collective bargaining, trade union rights, information and consultation rights, or workers’ participation rights," ETUC said in a press release.
"The text is also a direct threat to board-level employee representation, and it facilitates corporate restructuring strategies that undermine collective rights," it added.
The union also raised concerns about plans for a, "fully digital company lifecycle," arguing that this could disconnect corporate governance from the workplace where employees are based.
The EU Inc proposal is intended to boost Europe's global competitiveness by making it easier for companies to establish themselves and expand across borders.
Starting a company and operating across state lines is generally simpler in the US than expanding across the EU's fragmented single market, where businesses can face different national rules and additional administrative costs. Brussels argues that these barriers make it harder for European companies to scale up.
In September, European business leaders urged the European Commission not to dilute the legislation, particularly its proposed "free choice of registered office". This would allow founders to choose where to register their company without having to locate all its operations in the same country.
EU leaders in March agreed to finalise the law by the end of the year.