How the EU can break down barriers for disabled workers

Reforming state aid rules to redirect subsidies from workshops for the disabled to workplace integration tools could revolutionize the integration of disabled people.

A simple change in state aid legislation could provide the necessary resources to ensure the integration of disabled people into the labor market.

In 2000, the European Union passed the Workplace Equality Directive, a landmark law that banned discrimination against people with disabilities and other disadvantaged groups in the labor market. With the signing of the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD) in 2011, the EU committed to integrating people with disabilities into regular employment.

More than 20 years after the Workplace Equality Directive and over a decade after the CRPD came into force, progress has been minimal. Since 2010, the employment rate of people with disabilities has stagnated at around 50 percent, while the rate of non-disabled people has risen to 75 percent.

There are clear reasons for this lack of progress. Instead of promoting the integration of disabled people into the regular labor market, the public sector continues to maintain a parallel employment system. The exact number of people with disabilities working in workshops for disabled people across the EU is unknown, but new evidence suggests that national authorities are devoting significant financial resources to maintaining this system.

Research by the European Network for Independent Living (ENIL) found 12 cases where authorities subsidized forms of sheltered employment. In Sweden, authorities spend 500 million euros a year to support Samhall, a company that employs 19,135 disabled people. In Germany, authorities are investing 33.34 million euros in building new facilities or renovating existing ones, and similar cases have been identified in Spain.

Sheltered employment is often defended as an effective means of bringing disabled people into the mainstream labor market. However, there is strong evidence to the contrary. After years of rejection by companies, a disabled person known to ENIL was finally offered a regular employment contract, but social services refused to authorize workplace support and instead insisted on accommodation in a workshop for disabled people.

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In 2021, Researchers at the University of Amsterdam found statistical evidence that when governments base their policies on sheltered employment, opportunities for people with disabilities remain equally low for men and decline for women. The United Nations recently adopted General Comment No. 8 on employment, which specifically states that protected employment for persons with disabilities constitutes segregation and discrimination.

Effective tools are available to ensure true inclusion in the workforce. Workplace support is one such tool, as is financial support for wages, changes to the physical environment and specialized equipment. These measures can help employers overcome existing prejudices.

Shifting the significant financial resources currently allocated to sheltered employment to these instruments would significantly advance the goal of integrating disabled people into the labor market.

The European Union has a mechanism that could facilitate this change. The Treaty on the Functioning of the EU gives the Union the power to monitor, review and eliminate state aid granted by national authorities to companies. Any form of subsidy can be considered government aid, and any company or nonprofit organization that provides goods or services is considered a business. EU state aid law generally prohibits authorities from subsidizing companies, although exceptions have been introduced over time.

The European Commission’s 2011 Decision on Services of General Economic Interest (SGEI) set out certain conditions under which social service providers can be exempted from these restrictions, for example if they support “reintegration into the labor market”. Such exceptions are worth supporting.

However, the 2014 General Block Exemption Regulation (GBER) declared that sheltered employment grants were exempt from legal restrictions. As outlined above, there is compelling evidence that sheltered employment hinders the labor market integration of people with disabilities. According to the logic of the 2014 SGEI decision, protected workshops are not considered a service of general economic interest and should not be exempt from the ban on state aid.

The European Commission must review the GBER by the end of 2026, which represents an excellent opportunity for reform. The abolition of the sheltered employment exception could be achieved simply by deleting point (f) of paragraph 2, Article 34. The GBER already allows support for financing wages, converting buildings and purchasing equipment. Extensive further adjustments are unlikely to be necessary. Rarely has it been so successful in bringing about lasting change and ending discrimination against millions of EU citizens.

It will not be easy to convince DG Competition to include anti-discrimination considerations in discussions on state aid. However, contracting states are obliged to faithfully comply with international treaties. In addition, the Charter of Fundamental Rights, which has the status of a primary law, prohibits discrimination based on disability.

During her hearing, the new Commissioner for Preparedness, Crisis Management and Equality, Hadja Lahbib, emphasized her commitment to being a “100 percent commissioner” for all her departments. The upcoming GBER discussions provide an ideal opportunity to deliver on this promise.

Florian Sanden is policy coordinator at the European Network on Independent Living (ENIL), board member at Neurodiversity Belgium and member of the advisory board of Advocacy group Self-determined life eV.. He is also a member of the WHO Technical Advisory Group on the WHO European Framework for Action to achieve the highest possible standard of health for people with disabilities 2022-2030.