News 2025

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  Can the EU restrict subcontracting A legal perspective_September 2025.pdf

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Being FIEC among the founding partners of the European Employers' Institute (EEI), we are pleased to announce the release of the a new legal study commissioned by the EEI. The paper explores the risks of restricting subcontracting and its impact on business freedom in the European Union.

Subcontracting is a common and essential practice in modern economies, where businesses delegate contractual obligations to third parties. This is because subcontracting enables, in particular, smaller companies to compete effectively. Restrictions limiting subcontracting tiers risk undermining competition by disproportionately benefitting larger companies that are able to perform tasks internally. No existing EU legislation currently limits subcontracting tiers, making such proposals unprecedented and legally challenging.

The study points to significant definitional challenges surrounding subcontracting, including the difficulty of clearly distinguishing between subcontracted services and purchased products, as well as defining the scope of subcontracting chains within supply and value chains.
It also warns of potential negative impacts on sustainability and regional economies. As a matter of fact, restricting subcontracting could force companies to replace repair or refurbishment services with new product purchases, increasing waste and reducing local employment opportunities.

As Brussels continues to debate a possible legislative instrument on subcontracting, this timely study underscores the risks of implementing overly restrictive measures that could inadvertently stifle business growth and job creation. “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”, commented Delphine Rudelli, Chair of the EEI Board.

More details: Contact Delphine Rudelli at info@eei-institute.eu

Download full Press Release - September 2025 (also available on EEI site).

ABOUT EEI: click here for more info

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  PRESS RELEASE_EEI legal study explores risks of restricting subcontracting and its impact on business freedom in the EU.pdf

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