Reforming state aid rules to redirect subsidies from sheltered workshops to workplace inclusion tools could revolutionize the integration of disabled people.
A simple change to state aid legislation could provide the necessary resources to secure the integration of disabled people into the labour market.
In 2000, the European Union adopted the Employment Equality Directive, a groundbreaking piece of legislation that banned discrimination against disabled people and other disadvantaged groups in the labour market. By signing the United Nations Convention on the Rights of Persons with Disabilities (UN CRPD) in 2011, the EU committed itself to integrating disabled people into regular employment.
More than 20 years after the Employment Equality Directive and over a decade after the UN CRPD came into effect, progress has been minimal. Since 2010, the employment rate of disabled people has stagnated around 50 percent, while the rate for non-disabled people has risen to 75 percent.
There are clear reasons for this lack of progress. Rather than promoting the integration of disabled people into the regular labour market, the public sector continues to maintain a parallel system of employment. The exact number of disabled individuals working in sheltered workshops across the EU is unknown, but emerging evidence suggests that national authorities spend significant financial resources to sustain this system.
Research conducted by the European Network on Independent Living (ENIL) identified 12 cases where authorities subsidized forms of sheltered employment. In Sweden, authorities spend €500 million annually to support Samhall, a company employing 19,135 disabled people. In Germany, authorities are investing €33.34 million in building new facilities or renovating existing ones, and similar cases have been identified in Spain.
Sheltered employment is often defended as an efficient means of transitioning disabled individuals into the regular labour market. However, there is strong evidence to the contrary. After years of rejection from companies, one disabled individual known to ENIL was finally offered a regular employment contract, only to have social services refuse to approve assistance at work, insisting instead on placement in a sheltered workshop.
In 2021, researchers from the University of Amsterdam found statistical evidence, that when governments base their policies on sheltered employment, the chances for disabled people remains equally low for men and decreases for women.The United Nations recently adopted General Comment No. 8 on employment, explicitly stating that sheltered employment for disabled people constitutes segregation and discrimination.
There are effective tools available to ensure true inclusion in the workforce. Assistance at work is one such tool, along with financial support for wages, modifications to the physical environment, and specialized equipment. These measures can help employers overcome existing prejudices.
Redirecting the substantial financial resources currently allocated to sheltered employment toward these tools would significantly advance the goal of integrating disabled people into the labour market.
The European Union has a mechanism at its disposal that could facilitate this shift. The Treaty on the Functioning of the EU grants the Union the authority to monitor, review, and eliminate state aid granted by national authorities to enterprises. Any form of subsidy can be considered state aid, and all companies or non-profit organizations offering goods or services are regarded as enterprises. EU state aid legislation generally prohibits authorities from subsidizing enterprises, though exemptions have been introduced over time.
The European Commission’s 2011 decision on Services of General Economic Interest (SGEI) outlined certain conditions under which providers of social services can be exempt from these restrictions if they, for example, support the “reintegration into the labour market.” Such exemptions are worthy of support.
However, the General Block Exemption Regulation (GBER) from 2014 declared subsidies for sheltered employment exempt from legal restrictions. As outlined earlier, there is compelling evidence that sheltered employment hinders labour market integration for disabled people. Following the logic of the 2014 SGEI decision, sheltered workshops do not qualify as 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, presenting an excellent opportunity for reform. Eliminating the exemption for sheltered employment could be achieved by simply removing letter (f) of paragraph 2, Article 34. The GBER already permits support for financing wages, modifying buildings, and purchasing equipment. Extensive further adjustments are likely unnecessary. Achieving lasting change and ending discrimination against millions of EU citizens has rarely been so achievable.
Convincing DG Competition to incorporate anti-discrimination considerations in state aid discussions will not be easy. However, state parties are obliged to honour international treaties faithfully. Additionally, the Charter of Fundamental Rights, which holds the status of 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 portfolios. The upcoming GBER discussions present an ideal opportunity to make good on this promise.
Florian Sanden is policy coordinator at the European Network on Independent Living (ENIL), a board member at Neurodiversity Belgium and a member of the advisory board of Interessenvertretung Selbstbestimmt Leben e.V.. He also serves on the WHO Technical Advisory Group on the WHO European framework for action to achieve the highest attainable standard of health for persons with disabilities 2022–2030.