BRUSSELS—The European Commission will today launch a Green Paper entitled "Modernising labor law to meet the challenges of the 21st century" that could have far-reaching implications for European business.

The EC says that it has decided to launch "a broad public debate on the need to review current labour law systems so that they are in step with the modern world of work."

It says that four out of 10 European Union workers now opearate on "non-standard" contracts or are self-employed and that reality is rapidly outpacing regulation in the European workplace.

The discussion paper will ask Member States, employers and workers' representatives how labour law at EU and national level can help the job market become more flexible while improving security for workers (the so-called 'flexicurity' approach).

The consultation forms part of the EU's Social Agenda 2005-2010 and is supposed to dovetail with several other Commission initiatives on the wider topic of flexicurity.

"The discussion paper is aimed at anyone with an interest in the changing nature of work in Europe. In particular, the Commission expects to receive responses from national authorities, trade unions and employers' organisations, as well as the general public," it stated.

The public consultation period runs until the end of March next year. After that the Commission plans to issue a follow-up communication in 2007 that would take into consideration the main policy issues and options identified in the responses.

The European Trade Union Confederation reacted swiftly to the E.C.'s announcement. It said that it welcomes the fact that the Commission had withstood some employer lobbying and adopted its "overdue" Green Paper.

"In recent years in many Member States, labour law reforms have been introduced in the framework of a competitiveness agenda that have promoted two tier labour markets rather than exert more influence on company decisions on employment security," stated the ETUC.

"Increasing amounts of workers—often the most vulnerable ones such as women, young workers and migrants—are working under conditions of permanent precarity. But also so-called standard workers are increasingly under pressure of shifts in production methods, the spread of subcontracting and outsourcing, relocation, and volatile financial capital taking over from enterprise," continued the confederation of unions.

The ETUC said that it believes that at EU level all relevant stakeholders need to engage in an "urgent debate" on how to adapt labor law and social policy to fit the modern world of work while providing for "fair and decent" working conditions and labor standards to all workers on EU territory, and protect workers against "overexposure to the whims of the market."

The ETUC said that "clearly," the Green Paper addresses only part of the issues, that it believes need to be addressed and said that it will make proposals on working time, temporary agency work, European Works Councils (EWC), information and consultation, and restructuring in the consultative period.