Opinion on the legal basis of the Just transition directive in the world of work: ensuring the creation of jobs and revitalising local economies

06.01.2026

Mrs Li Andersson

Chair

Committee on Employment and Social Affairs

BRUSSELS

Subject: Opinion on the legal basis of the Just transition directive in the world of work: ensuring the creation of jobs and revitalising local economies (2025/2131(INL)

(corrected the point number of Annex VI, in point II, Background)

Dear Madam Chair,

On 13 May 2025, the Coordinators of the Committee on Employment and Social Affairs (EMPL) mandated the Chair to request an authorisation to draw up an own-initiative legislative report (INL) pursuant to Article 225 of the Treaty on the Functioning of the European Union (TFEU) and Rule 47 of the Rules of Procedure of the European Parliament (RoP), with recommendations to the Commission on a ‘Just transition directive in the world of work: ensuring the creation of jobs and revitalising local economies’. The authorisation was granted by the Conference of Presidents on 2 July 2025.

In accordance with Rule 47(3) RoP, the committee responsible for the subject-matter is to request an opinion on the appropriateness of the legal basis from the committee responsible for legal affairs, which is to be delivered without undue delay. Such request was sent on 17 November 2025 by the Chair of the EMPL committee.

The Committee on Legal Affairs has considered the matter of the appropriateness of the legal basis proposed in the draft INL in question at its extraordinary meeting on 11 December 2025.

II - Background

The request for authorisation of the INL was made pursuant to point VII of Annex VI to the Rules of Procedure, which confers on the EMPL committee the competence in the area of employment policy and all aspects of social policy including working conditions, social security, social inclusion and social protection.

The purpose of the INL is to invite the Commission to propose legislative measures on Just Transition in the world of work, to enhance job creation and revitalisation of local economies.

The EMPL Committee has consistently underlined the importance of a socially fair transition, especially for communities and workers disproportionately impacted by the move away from fossil fuels and carbon-intensive industries. The EMPL Committee dealt with such issues as part of its report on “Job creation – the just transition and impact investments”, which highlighted the pivotal role of the JTF in addressing the social dimensions of the green transition. The Committee also called for adequate financial resources for the JTF, an expansion of its scope, and better coordination with other financial instruments to ensure comprehensive support for affected workers and regions.

The European Commission is to produce a mid-term review of the JTF by 30 June 2025 (included in the Commission Work Programme 2025 for Q2). This review intends to evaluate progress towards the specific objective set out in Article 2 of Regulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing the Just Transition Fund, of ‘enabling regions and people to address the social, employment, economic and environmental impacts of the transition’. The findings of this review can provide factual data to elaborate further analyses and allow progress on challenges like tackling long-term employability of displaced workers, supporting reskilling responding to the local labour market demands, and reducing the risk of poverty and exclusion of the local most vulnerable groups.

In this context, EMPL intends to take the opportunity to call on the Commission to propose a comprehensive directive on a Just Transition to ensure broad support for affected workers. The aim of this INL proposal is to put forward a framework for the just transition to ensure that national and regional efforts result in the creation of jobs in the affected regions. The framework should include strategies and concrete measures that incentivise the development of viable economic alternatives and that attract the necessary investment. In addition, the report is intended to serve as Parliament’s input for the Commission’s Quality jobs roadmap.

The INL is primarily based on Article 153(2), point (b), in conjunction with Article 153(1), points (a), (b), (e) and (h) TFEU, which cover issues related to protecting health and safety of workers, working conditions, information and consultation of workers and integration of persons excluded from the labour market.

III - The relevant Treaty Articles

Title X of Part three TFEU, on “Social policy”, reads, inter alia (emphasis added):

Article 153

(ex Article 137 TEC)

1. With a view to achieving the objectives of Article 151, the Union shall support and complement the activities of the Member States in the following fields:(a) improvement in particular of the working environment to protect workers’ health and safety;

(a) improvement in particular of the working environment to protect workers' health and safety;

(b) working conditions;

(c) social security and social protection of workers;

(d) protection of workers where their employment contract is terminated;

(e) the information and consultation of workers;

(f) representation and collective defence of the interests of workers and employers, including co-determination, subject to paragraph 5;

(g) conditions of employment for third-country nationals legally residing in Union territory;

(h) the integration of persons excluded from the labour market, without prejudice to Article 166;

(i) equality between men and women with regard to labour market opportunities and treatment at work;

(j) the combating of social exclusion;

(k) the modernisation of social protection systems without prejudice to point (c).

2. To this end, the European Parliament and the Council:

(a) may adopt measures designed to encourage cooperation between Member States through initiatives aimed at improving knowledge, developing exchanges of information and best practices, promoting innovative approaches and evaluating experiences, excluding any harmonisation of the laws and regulations of the Member States;

(b) may adopt, in the fields referred to in paragraph 1(a) to (i), by means of directives, minimum requirements for gradual implementation, having regard to the conditions and technical rules obtaining in each of the Member States. Such directives shall avoid imposing administrative, financial and legal constraints in a way which would hold back the creation and development of small and medium-sized undertakings.

The European Parliament and the Council shall act in accordance with the ordinary legislative procedure after consulting the Economic and Social Committee and the Committee of the Regions.

In the fields referred to in paragraph 1(c), (d), (f) and (g), the Council shall act unanimously, in accordance with a special legislative procedure, after consulting the European Parliament and the said Committees.

The Council, acting unanimously on a proposal from the Commission, after consulting the European Parliament, may decide to render the ordinary legislative procedure applicable to paragraph 1(d), (f) and (g).

3. A Member State may entrust management and labour, at their joint request, with the implementation of directives adopted pursuant to paragraph 2, or, where appropriate, with the implementation of a Council decision adopted in accordance with Article 155.

In this case, it shall ensure that, no later than the date on which a directive or a decision must be transposed or implemented, management and labour have introduced the necessary measures by agreement, the Member State concerned being required to take any necessary measure enabling it at any time to be in a position to guarantee the results imposed by that directive or that decision.

4. The provisions adopted pursuant to this Article:

- shall not affect the right of Member States to define the fundamental principles of their social security systems and must not significantly affect the financial equilibrium thereof,

- shall not prevent any Member State from maintaining or introducing more stringent protective measures compatible with the Treaties.

5. The provisions of this Article shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs.

Title XVIII of Part three TFEU, on “Economic, social and territorial cohesion”, reads, inter alia (emphasis added):

Article 174

(ex Article 158 TEC)

In order to promote its overall harmonious development, the Union shall develop and pursue its actions leading to the strengthening of its economic, social and territorial cohesion.

In particular, the Union shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions.

Among the regions concerned, particular attention shall be paid to rural areas, areas affected by industrial transition, and regions which suffer from severe and permanent natural or demographic handicaps such as the northernmost regions with very low population density and island, cross-border and mountain regions.

Article 175

(ex Article 159 TEC)

Member States shall conduct their economic policies and shall coordinate them in such a way as, in addition, to attain the objectives set out in Article 174. The formulation and implementation of the Union's policies and actions and the implementation of the internal market shall take into account the objectives set out in Article 174 and shall contribute to their achievement. The Union shall also support the achievement of these objectives by the action it takes through the Structural Funds (European Agricultural Guidance and Guarantee Fund, Guidance Section; European Social Fund; European Regional Development Fund), the European Investment Bank and the other existing Financial Instruments.

The Commission shall submit a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions every three years on the progress made towards achieving economic, social and territorial cohesion and on the manner in which the various means provided for in this Article have contributed to it. This report shall, if necessary, be accompanied by appropriate proposals.

If specific actions prove necessary outside the Funds and without prejudice to the measures decided upon within the framework of the other Union policies, such actions may be adopted by the European Parliament and the Council acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions.

IV – CJEU case-law on the choice of legal basis

The Court of Justice of the European Union (CJEU) has traditionally viewed the question of the appropriate legal basis as an issue of constitutional significance, guaranteeing compliance with the principle of conferred powers (Article 5 of the Treaty on European Union) and determining the nature and scope of the Union’s competence.

According to well-established case-law, the legal basis of a Union act does not depend on an institution's conviction as to the objective pursued but must be determined according to objective criteria amenable to judicial review, including in particular the aim and the content of the measure.

If examination of a measure reveals that it pursues a twofold purpose or that it has a twofold component and if one of those is identifiable as the main or predominant purpose or component, whereas the other is merely incidental, that measure must be based on a single legal basis, namely that required by the main or predominant purpose or component. Only exceptionally, if it is established that the act simultaneously pursues a number of objectives, inextricably linked, without one being secondary and indirect in relation to the other, may such an act be founded on the various corresponding legal bases. This would however only be possible if the procedures laid down for the respective legal bases are not incompatible with and do not undermine the right of the European Parliament.

V – Aim and content of the INL

Recommendation No 1 of the INL proposal, as shaped by the final compromise amendments, sets out the general objective of the proposal: ‘the general objective of the proposal is to establish a Union framework of policy measures that can be put in practice in regions affected by the green and digital transition with the aim of ensuring a socially fair and inclusive transition and the creation and protection of quality jobs’.

Paragraph 1 of the motion for a resolution sheds further light on the aim of the INL proposal: “[Parliament] believes that a legislative framework to address the challenges and opportunities of a just transition in the workplace is essential to ensure adequate minimum standards that provide clarity and structure for both workers and employers in anticipating and managing change and ultimately improve the Union’s resilience, competitiveness and upward social convergence and social justice.”

It can, therefore, be inferred that, according to Recommendation No 1, the general objective of the INL proposal consists of two related but distinct elements: (a) the aim of ensuring a socially fair and inclusive transition; (b) the creation and protection of quality jobs.

Incidentally, it should be stressed that the objective of the INL proposal is formulated in very broad terms, which makes it more difficult to precisely establish a concrete link with any specific element under Article 153(1) TFEU.

Consequently, the fields of competence under Article 153(1)(a), (b), (e) and (h) TFEU could appropriately underpin the future legislative proposal, should the latter concretise the INL proposal’s general objective with reference to these four elements. However, if the general objective is to go beyond the contours of Article 153(1) TFEU, then a supplementary legal basis might be necessary (see part VI - Analysis, below).

With regard to the content of the INL proposal, Recommendation No 2 (as specified in the draft report and not amended by the compromise amendments) specifies that the proposal should take the form of a Directive, and that it should include elements in the following fields: (a) working conditions;(b) the integration of persons excluded from the labour market;(c) the information and consultation of workers; (d) improvements of the working environment to protect workers’ heath and safety. It is evident that these elements squarely correspond to Article 153(1)(b), (h), (e), and (a) TFEU, respectively. There is nothing that would exclude the use of all four fields of competence should, indeed, the future legislative proposal contain such autonomous and distinct, yet indissociably linked, elements.

Next, Recommendation No 3 sets out the actual content of the INL proposal and contains the following policy measures:

(a) establishing a dedicated framework to anticipate and manage change in regions and sectors facing transitions on the basis of the principles of mandatory and timely information and consultation of workers and their representatives, of social dialogue and of collective bargaining;

(b) ensuring that the right to information and consultation of workers and their representatives, as laid down in Directive 2002/14/EC and national provisions, is effectively applied in the context of transitions;

(c) establishing an individual right to training for workers during working hours;

(d) establishing national just transition strategies, with a particular focus on developing long-term vision for local economies and workforce in all affected regions and sectors, to be designed and implemented through meaningful involvement of the social partners and local actors;

(e) developing support programmes for businesses, in particular SMEs and local actors in order to encourage local job creation;

(f) ensuring the matching of labour and skills supply and demand through a combined use of labour market intelligence, enhanced collaboration of local actors and social partners with training providers, and the promotion of company-level transition plans;

(g) developing a monitoring structure to deliver strategic foresight on transition impacts and labour market developments.

VI – Analysis

(a) Article 153 TFEU

As a preliminary point, it should be highlighted that the proposed policy measures lack, to a large extent, specificity, which, therefore, entails that the following analysis lacks the required precision when assessing the compatibility with the invoked legal basis.

First, with regard to Article 153(1)(a) TFEU, which allows for Union action (pursuant to Article 153(2)(b) TFEU) related to the improvement of the working environment to protect workers’ health and safety, there is no specific provision under the measures mentioned in Recommendation No 3 which would reveal the need to resort to this field of competence.

It is only paragraph 10c of the motion for a resolution that explicitly refers to occupational health and safety issues. According to it, ‘...[Parliament] stresses the importance of proactively addressing evolving OSH risks to work tasks, patterns and workplaces, particularly environmental and psychosocial risks, in the context of the twin transition; calls on the Commission to conduct a comprehensive review of the current strategic framework on health and safety at work and the existing OSH legislative framework with a view to identifying remaining gaps and ensuring the EU acquis remains fit for purpose as well as feeding into the design of the post 2027 strategic framework’.

Consequently, it does not seem necessary to resort to the field of Article 153(1)(a) TFEU, given the content of the INL proposal, as outlined in Recommendation No 3. However, should the future legislative proposal substantially expand on workers’ health and safety matters, in line with paragraph 10c, then such a choice could be deemed necessary.

Second, with regard to Article 153(1)(b) TFEU, which allows for Union action (pursuant to Article 153(2)(b) TFEU) on matters related to “working conditions”, it should be reminded that this field has a particularly wide scope, as it can cover any measure broadly falling under this umbrella term of “working conditions”.

Point (c) of Recommendation No 3 refers to the establishment of an individual right to training for workers during working hours, which, broadly, corresponds to the improvement of working conditions. Paragraph 5 of the motion for a resolution further adds that: “[Parliament] highlights that the shortage of skilled workers can be meaningfully abated only by addressing the availability and accessibility of education, (re)qualification, and training opportunities as well as improving working conditions; stresses that social dialogue between workers and employers on the modalities of training opportunities that are aligned with labour market needs and that respect work-life balance is essential and should be facilitated; strongly believes that an individual right to training for workers during working hours which addresses the main barriers to pursuing training can ensure quality upskilling or reskilling, employee training and career development support for a predictable and stable supply of skilled workers for employers...”.

Therefore, Article 153(1)(b) TFEU could constitute an appropriate field of competence for this autonomous component of the INL proposal.

Third, with regard to Article 153(1)(e) TFEU, which allows for Union action (pursuant to Article 153(2)(b) TFEU) related to information and consultation of workers, points (a) and (b) under Recommendation No 3 are relevant in this respect. Under point (a), information and consultation of workers is mentioned within the context of a dedicated framework to “anticipate and manage change in regions and sectors facing transitions”. It is unclear whether the mandatory and timely information and consultation of workers and their representatives simply functions as an underlying principle which should underpin this dedicated framework, or whether this would, perhaps, entail more concrete arrangements that should be implemented in this regard. Point (b) refers to the effective application of the right to information and consultation of workers and their representatives, as laid down in Directive 2002/14/EC and national provisions.

Paragraph 4 of the motion for a resolution adds the following: ‘[Parliament] highlights that the anticipation and management of change is paramount for employers, and workers, and regional and local authorities and communities to successfully navigate the green and digital transition and effectively deal with the economic challenges brought on by adverse geopolitical events and turn these into opportunities; stresses that planning ahead for the transition can proactively prevent redundancies and lead to job creation, build long-lasting resilience in business and make best use of available resources; emphasises that such plans require decisions likely to lead to substantial changes in work organisation and, therefore, must be developed in a wide-ranging partnership through the framework of social dialogue and collective bargaining, with full respect for the right to information and consultation; calls on the Commission in this regard to monitor and enforce the full implementation of the framework set out in Directive 2002/14/EC...’

Consequently, the substantive provisions the INL proposal intends to set out in relation to information and consultation of workers remain largely undefined. It seems that Article 153(1)(e) TFEU could be appropriately utilised here; however, the concrete measures should be crystallised in a more tangible way in the future legislative proposal, to the extent that these may amount to a self-standing substantive component that should be inextricably linked with other substantive components under different fields of competence, if applicable.

Lastly, with regard to Article 153(1)(h) TFEU, this field of competence allows for Union measures (pursuant to Article 153(2)(b) TFEU) related to the integration of persons excluded from the labour market, without prejudice to Article 166 TFEU. It is not evident which of the measures mentioned under Recommendation No 3 would entail minimum harmonisation requirements for the integration of persons excluded from the labour market, nor is it explicit which category of such persons would be targeted.

Paragraph 6a of the motion for a resolution highlights that ‘...[Parliament] demands stronger protections against unfair dismissals and calls for workers affected by restructuring to ensured access to adequate compensation, retraining opportunities and support in securing new employment”; with reference to the pending revision of the European Globalisation Adjustment Fund for Displaced Workers (“EGF Regulation”), in paragraph 10b, Parliament ‘stresses the importance of active labour market and social protection measures in reintegrating displaced workers into the labour market following major restructuring events;’ and ‘calls on the Commission to ensure continued dedicated support for workers at risk from or displaced by major restructuring events in the next MFF’.

Therefore, in light of paragraph 6a, Article 153(1)(h) TFEU could be an appropriate field of competence for measures taken for the reintegration of displaced workers to the labour market, bearing, however, in mind that any such support, if framed in the context of the next MFF, may require the legal basis under Article 175(3) TFEU (see also below on this), as this is the case with the EGF Regulation.

Paragraph 10a of the motion for a resolution could also possibly correspond to this field of competence. Indeed, Paragraph 10a reads as follows: ‘[Parliament] recalls the importance of disability mainstreaming and an intersectional approach addressing young, older, low-skilled and female workers across policy measures addressing the twin transition such as provision of reasonable accommodation in education and training”. However, it is important to stress that recourse to this field of competence should not override the harmonisation prohibition under Article 166 TFEU, on matters related to the content and organisation of vocational training.

(b) Article 175 TFEU

It should be noted that certain measures included in Recommendation No 3 raise the question of compatibility with Article 153(1) TFEU, thus leaving open the need to resort to supplementary or alternative legal bases, depending on the development of the future legislative proposal.

For instance, as mentioned above, point (d) of Recommendation No 3 refers to the establishment of national just transition strategies, with a particular focus on developing a long-term vision for local economies and workforce in all affected regions and sectors. Moreover, point (e) refers to the development of support programmes for businesses, to encourage job creation.

Paragraphs 6 and 7 are also relevant, in this regard. Paragraph 6 refers to the national just transition strategies which ‘should identify the impact of transitions on regions, individual sectors and the respective workforce and should set out a comprehensive and cross-cutting plan to mitigate the impact;’; [Parliament] underlines the importance of developing long-term vision and strategy for local and regional economic transition by involving public and private actors, civil society, and social economy;’ and ‘stresses that direct investments in innovation and improving regional attractiveness ...are necessary to retain workers and generate quality jobs’. In Paragraph 7 Parliament ‘urges Member States and regional authorities to establish and strengthen business support programmes in the affected regions to help start-ups and SMEs grow and succeed; highlights that investment incentives coupled with social conditionalities can help attract firms to vulnerable regions while ensuring sustainable development of the local economy; ... calls on the European Commission to ensure dedicated support for SMEs under the future just transition financing; further calls on the European Commission to keep track of SMEs participation in just transition programmes”.

To the extent that the future proposal may require action, especially in the form of financial measures with reference to relevant EU funding programmes, to serve social, economic and territorial cohesion in an autonomous manner, as this could be inferred from the above-mentioned paragraphs, then supplementary legal bases could be required. The main option would be Article 175(3) TFEU, according to which, if specific actions prove necessary outside the Structural Funds and without prejudice to the measures decided upon within the framework of the other policies of the Union, then the European Parliament and the Council shall adopt such actions in accordance with the ordinary legislative procedure and after consulting the European Economic and Social Committee and the European Committee of the Regions. It should also be reminded, in this respect, that the establishment of the abovementioned Just Transition Fund has also been based upon Article 175(3) TFEU.

c) Additional elements

In addition, Article 149 TFEU allows for the adoption of incentive measures designed to encourage cooperation between Member States and to support their action in the field of employment through initiatives aimed at developing exchanges of information and best practices, providing comparative analysis and advice as well as promoting innovative approaches and evaluating experiences, in particular by recourse to pilot projects. However, it is clear that such a legal basis excludes any harmonisation of the laws and regulations of the Member States. If the intention, therefore, is to put forward a Directive harmonising national laws, per Recommendation No 2, then Article 149 TFEU cannot be used as it only allows for the adoption of incentive measures.

VII – Conclusion and recommendation

At its meeting of 11 December 2025, the Committee on Legal Affairs accordingly decided by 19 votes to 2 and 3 abstentions, that the INL proposal could be appropriately based on Article 153(2)(b), in conjunction with Article 153(1)(b) TFEU. However, this should also be depicted more clearly in the proposal’s objective, which remains very broad in its current form.

Regarding 153(1)(a) and (h) TFEU, the objective and content of the INL proposal do not offer any concrete elements which would genuinely justify recourse to these fields of competence. However, they can be deemed appropriate should the future legislative proposal expand on those elements, given the impetus provided by the relevant paragraphs of the motion for a resolution.

Regarding 153(1)(e) TFEU, the relevant policy measures, as currently set out, do not allow for a concrete verification of the appropriate choice of this field; however, it may prove to be appropriate depending on the development of a future legislative proposal.

In addition, the Committee on Legal Affairs concluded that supplementary legal bases, such as Article 175(3) TFEU, might be appropriate given that the INL proposal seems to be expanding beyond the field of social policy, as evidenced, first and foremost, by the title itself, which refers to the revitalisation of local economies, thus related to economic and social cohesion, more broadly.

Yours sincerely,

Ilhan Kyuchyuk