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In focus – information and consultation procedures

ECDB data show that a special negotiating body (SNB) has not been set up nor agreement reached on worker involvement in the overwhelming majority of currently registered SEs. One explanation is that many SEs were originally set up as employee-free companies (usually as a subsidiary). If we look only at the companies identified as having employees (213 SEs) the setting-up of an SNB is known to have taken place in 97 cases.

According to Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European Company with regard to the involvement of employees, no SE should be set up without involving employees: “information and consultation procedures at transnational level should nevertheless be ensured in all cases of creation of an SE”. (Participation at board level is not obligatory if there was no such practice in the company previously.). In order to ensure negotiations on employee involvement – including information and consultation rights of employees – a so-called special negotiating body (SNB) should be set up.

However, ECDB data show that an SNB has not been set up nor agreement reached on worker involvement in the overwhelming majority of currently registered SEs. One explanation is that many SEs were originally set up as employee-free companies (usually as a subsidiary).

In the absence of a clear rule in the SE legislation, a German court stated that when an employee-free SE subsequently gets employees it must start negotiations in accordance with the abovementioned Directive (OLG Düsseldorf, 30.3.2009, I-3 Wx 248/08). Thus, even if the setting up of an SE without employees is a common practice, this does not exempt the SE from the requirement to engage in negotiations once it starts to acquire employees.

In the meantime, a significant number of initially employee-free SEs have acquired employees, although usually without such “catch-up” negotiations. However, information is currently not available on a large proportion of initially employee-free SEs.

If we look only at the companies identified as normal (213 SEs) the setting-up of an SNB is known to have taken place in 97 cases.1

Set up of SNB (total: 213)

Agreement reached (total: 97)

Information / consultation (total: 75)

Yes

No

N/A

Yes

Negotiations terminated or failed

Fall-back position

Representative body

Only procedure

97

46

70

75

17

5

60

15

In 17 cases the parties agreed not to open or to abort negotiations. These companies typically have up to a few hundred employees, with the exception of Berner SE (Germany) and the Sword Group SE (France), which decided to rely on national information and consultation rights only. Five companies have completed negotiations and decided to apply the standard rules. In most cases (75 SEs), however, an agreement was reached and information and consultation rights were granted to employees. A total of 60 out of these 75 established a proper representative body (SE works council, employee committee or similar platform). However, a further 15 provided this right by means of other methods, for example, they granted this right to the highest-level works council within the group (for example, KNAUF INTERFER SE) or provided for less formal methods of information, such as written briefings (for example, Pulsion Medical Systems SE, Huber SE).The common feature of these companies is that they have fewer than 2,000 employees.

In all cases (17 SEs) where European works councils existed previously, a proper SNB was set up and information and consultation rights were maintained through a proper representative body. Before conversion/establishment, 60 out of the 75 companies had no proper European works council. In the remainder, there was no EWC previously (140 out of 213 – currently categorised as normal – SEs had no European works council previously, according to the ETUI European works council database).

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