REGULATION (EU) 2026/1139: EU SUPPORT FOR WORKERS AFFECTED BY IMMINENT JOB DISPLACEMENT

In the European economic context marked by industrial restructuring and job losses resulting from technological and environmental transformations or growing pressures on production chains, Regulation (EU) 2026/1139, adopted on 20 May 2026, significantly extends the scope of the European Globalisation Adjustment Fund for Displaced Workers (EGF), established by Regulation (EU) 2021/691.

The Regulation introduces two key changes in the EGF mechanism.

The first is that EGF support may now be activated by the enterprise before layoffs take place whereas before, the mechanism applied mainly after the layoff. The objective is that workers may keep their workplace or assume a new professional role.

The second change is meant to tackle the domino effect of layoffs since the major restructuring of a company may have a direct impact on suppliers and downstream producers.

For enterprises, the EGF mechanism, which will apply until 2027, may become a preventive restructuring management tool.

For workers, it provides access to training, counselling, mentoring and career guidance before the employment relationship ends, thereby facilitating their transition to another job or role.

What is the EGF?

The EGF is an EU financial instrument designed to support workers affected by the loss of their jobs or, under the new rules, by the risk of imminent job displacement as a result of major restructuring events.

The Fund does not finance the enterprise’s business activities and does not cover the employer’s ordinary obligations.

It supports active labour market policy measures such as vocational training, reskilling, counselling, career guidance and assistance with reintegration into employment.

The EGF is implemented under shared management. This means that enterprises do not apply for funding directly to the European Commission, but to the competent authority of the Member State. That authority may then submit the application for a financial contribution to the European Commission.

The EGF’s annual budget For the 2026–2027 at EU level amounts to EUR 35 million. There is no fixed national allocation for Romania. Like any other Member State, Romania may access the Fund through eligible applications, subject to the budget available at EU level.

For applications concerning workers affected by imminent job displacement, the EGF financial contribution may not exceed EUR 4 million per enterprise and per Member State in any financial year.

Beneficiaries of the EGF mechanism

Support may cover workers whose contract or employment relationship is expected to terminate by layoff as part of a collective redundancy procedure, following written notification by the employer to workers’ representatives.

The Regulation lays down a general threshold of at least 200 workers affected by imminent job displacement in a single enterprise within a single Member State. In certain cases, applications may be accepted even where all the criteria are not fully met. This flexibility applies in particular to small labour markets and applications involving SMEs, provided that the impact on employment and on the local, regional or national economy is significant.

Inclusion of suppliers and downstream producers

An enterprise applying for EGF support may also include in its application workers affected by imminent job displacement who are employed by its direct suppliers or downstream producers.

Such inclusion is possible only if two principal conditions are met.

Firstly, the collective redundancies must take place in the same Member State.

Secondly, there must be a clear causal link between the restructuring of the applicant enterprise and the planned redundancies at the suppliers or downstream producers.

Responsibility lies with the enterprise applying for support. It must provide the competent authorities with all the necessary information, ensure national co-financing and implement the entire coordinated package of personalised services.

At the same time, the enterprise may agree with the suppliers or downstream producers on contributions proportionate to the support granted to their workers.

Procedure for applying for EGF support

An enterprise undergoing restructuring may ask the competent authorities of the Member State to submit an application for an EGF financial contribution to the European Commission.

The enterprise’s application must be submitted within 14 weeks of the written notification to the competent public authority and the workers’ representatives concerning the planned collective redundancies.

The Member State then submits the application to the European Commission. Prior submitting the application, the Member State may carry out ex ante checks to verify, in particular, the enterprise’s financial and administrative capacity, the compliance of the package of personalised services with national law, the risks of fraud and the risk of double funding.

After receiving the complete application, the Commission must, as a rule, complete its assessment within 50 working days. Where additional information is required, specific procedural time limits apply to the request for and submission of that information.

Content of the application

The application file must contain detailed information on the enterprise, the number of workers concerned, a description of the events leading to the restructuring, the package of personalised services adopted, the estimated budget and the implementation schedule.

Where workers employed by direct suppliers or downstream producers are included, the application must contain a reasoned analysis of the causal link between the collective redundancies planned by the applicant enterprise and those planned within its economic chain.

The application must also confirm that the enterprise has complied, and continues to comply, with its legal obligations, including the information and consultation obligations laid down in Directive 98/59/EC on collective redundancies and the obligations arising from any applicable collective agreements. The application must also demonstrate that the coordinated package of personalised services does not replace measures which, under national law or collective agreements, are the employer’s responsibility.

Eligible measures

EGF support may finance active labour market policy measures. These may include training, upskilling and reskilling, certification of acquired skills, career guidance, counselling, mentoring, job-search assistance, placement assistance and cooperation activities.

The Regulation places emphasis on transferable skills and on adapting workers’ skills to the digital and green economy.

Short-time working schemes, allowances and support for business start-ups are not eligible.

The EGF does not finance the temporary suspension of business activities and does not replace the employer’s obligations. It finances the occupational transition of workers facing imminent job loss.

Consultation of workers

The Regulation assigns an important role to the consultation of the targeted beneficiaries, their representatives and the social partners. Where applicable, the enterprise’s decision to apply for EGF support and the design of the coordinated package must be undertaken in consultation with them.

Impact on Romanian enterprises

Enterprises anticipating collective redundancies should assess at an early stage whether the conditions for accessing EGF support are met. This assessment should be integrated into the restructuring planning process, alongside compliance with employment law obligations, consultation of workers’ representatives, assessment of the impact on the supply chain and preparation of the necessary documentation.