Strict labour laws don't really prevent this in practice, if someone _wants_ to work themselves to death they can (I've worked with a remote team from Poland before while I was in Australia. Despite Poland having far strong labour laws than Australia, some members of the Polish team voluntarily worked longer hours and just didn't report it).
What labour laws do is prevent employers from forcing employees to work crazy hours. I think it's largely a cultural difference in the end. I live and work in the US now and here I've noticed the general sentiment that employees should be thankful to have a job and so should do whatever their employer says. It's also important to realise that highly compensated tech employees are less susceptible to this needing to work insane hours because we have much better leverage, but that doesn't stop people self-imposing longer hours due to cultural differences.
So again, 1) there are more regulatory barriers to making the side project => startup jump, and 2) finding both people who are okay with working early stage company hours and finding work arounds to fairly compensate them is much harder.
(OK, so given the general vibe I don't expect Europe to have the same kind of repugnant clauses I've seen elsewhere, but...)
In the US you just slap up a Delaware Corp, use basically standard documents for it's structure and ownership and you're off to the races.
Is it that easy in Europe?
Your employees aren't allowed to work their asses off. They're going to expect to be able to get to work at 10, and be home by 5.