European legislation and the European Court of Justice -impacts on worker participation in Europe. Konferenzpapier im Rahmen der IREC "Governance issues in shifting industrial and employment relations" in Utrecht von 26.-28.08.2004
Schwimbersky, Sandra (2004): „European legislation and the European Court of Justice -impacts on worker participation in Europe. Konferenzpapier im Rahmen der IREC „Governance issues in shifting industrial and employment relations“ in Utrecht von 26.-28.08.2004“. Bamberg: opus.
Industrial Relations in Europe Conference <2004, Utrecht>
Year of publication:
Worker participation at the supervisory board has always been subject to controversial debate. It is not the aim of this paper to examine worker participation as to its advantages and disadvantages, but to give the reader an overview of how companies can determine the depth, form and level of worker participation by choosing between different legal structures within the EU. Generally speaking, three alternatives can be identified. First of all, companies that do business across boarders in the EU/EEA and are organised as joint-stock companies may establish a European Company (Societas Europaea = SE) from October 8th, 2004 on. The Council of Ministers has agreed on the European Company Statute during the Nice Summit in December 2000 after more than 30 years of controversial debate. In this context two legal instruments have been enacted, the council regulation (No. 2157/2001) on the Statute for a European Company, which rules the internal corporate governance structure of the SE, and the council directive (2001/86/EC) supplementing the Statute for a European Company with regard to the involvement of employees on the company level, which emphasises voluntary negotiations between employees' representatives, a so-called special negotiating body, and the management. The negotiation's outcome primarily depends on the negotiating skills of the parties involved. If no agreement is achieved, the management, however, still wants to establish a SE, standard rules are applied that are specified in the Annex of the Directive. Secondly, companies continuously organise their activities by choosing a legal form that is provided by national law. According to rulings as to freedom of establishment by the ECJ, member states have to recognise companies that have been established according to legal provisions in another member state as long as this member state follows incorporation theory. This means, for instance, for the management that it may establish a British private limited company. Then the ltd. can even transfer its administrative centre to Germany. In order to do business there, the ltd. must be registered in the German commercial register. Consequently, German legislation regarding worker participation at the company level cannot be applied. Finally, the proposal for a EU directive on cross-border mergers of companies with share capital is mentioned in this context. The proposal provides two alternatives concerning worker participation in the case of a merger. On the one hand, one ore more companies participating are subject to any form of worker participation so far and there are no national provisions on worker participation in the member state, where the new company is incorporated. In this case a procedure in accordance with the SE Directive will have to be established. On the other hand, the member state, in which the new company is incorporated, offers national provisions regarding worker participation. They will have to be applied in consequence. In sum, the above-mentioned organisational alternatives might put considerable pressure on the different industrial relations systems persistent in the EU. In the long run, this pressure might result in a convergence not only of the industrial relations systems but also of the corporate governance systems.
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Societas Europaea, ECS
freedom of establishment, ECJ, merger-directive, board-level representation
freedom of establishment
July 22, 2005