How does BLER become European

Board-level employee representation (BLER) continued to take on a European dimension slowly but steadily in companies registered under European company law (SE, CBM or SCE Directives) or, in some jurisdictions, under national law. In the case of established European Companies (Societas Europaea, or SE), the ETUI has identified 66 which have provisions for board-level employee representation (ETUI 2017a). At least 25 of these SEs have BLER mandated in at least two countries (13 SEs count two countries, 9 SEs count three countries, and 3 SEs count four countries, as Figure 4.14a shows). Germany stands out not only for having the vast majority of SEs with BLER headquartered in its territory (53 out of 66), but also excelling in terms of Europeanisation: the 12 SEs with the strongest worker representation on boards in multinational companies (i.e. in at least three different countries) are based in Germany, except for one in Austria (ETUI 2017b). Companies that emerge from a cross-border merger may see the Europeanisation of their BLER. The ETUI has identified 75 cross-border mergers between 2008 and 2012 where employee participation issues arose in merger plans (Biermeyer and Meyer 2015). SEs may also be involved in cross-border mergers. Overall, however, it could often not be clarified whether an agreement had been struck by a Special Negotiating Body or if instead management had unilaterally applied the CBM Directive’s standard rules. However, when it is not European but national law which brings about the internationalisation of mandates to cover subsidiaries in other European countries, serious challenges may arise. How should the workers’ side of the board in parent companies be comprised in such cases? In the absence of universally applicable rules in Europe, national legislatures have adopted various solutions. Some remain silent, allowing in practice the inclusion of workers abroad through voluntary negotiations (e.g. Germany or Sweden). Others, such as France, Denmark or Norway, explicitly provide for the possibility to extend participation rights to workers employed by foreign subsidiaries, under certain conditions (ETUI and ETUC 2015: 65) (see Figure 4.14b). In Denmark and Norway, such workers are granted the right to vote and to be elected to the board of the parent company (Mulder 2017). However, group boardlevel employee representation can only be established by negotiated group arrangements, which are seldom used in practice. In Denmark, only one company is known to have applied it, and only 24 Norwegian groups have been found to have made such arrangements (Hagen, forthcoming). In France, when employees are entitled to at least two board representatives, the general assembly of shareholders can opt for an appointment procedure in which the second member must be appointed by the European (or SE-) Works Council, if any exists. This solution grants a European mandate to the member appointed, who can be employed either in France or in a foreign subsidiary. The Institut Français des Administrateurs has encouraged internationalised companies to open the election procedure to foreign subsidiaries as a means to rebalance representation between workers in France and abroad (IFA 2014). However, insecurities arise from conflict between national laws and the lack of EU provisions on BLER. The European Court of Justice is currently considering the legal question of whether a Member State is obliged to explicitly include workers from foreign subsidiaries in the election procedures for the board of a parent company in order to comply with EU principles of non-discrimination on the grounds of nationality and the principle of workers’ freedom of movement (Arts. 18 and 45 of the Treaty on the Functioning of the European Union) (C566/15 Erzberger/TUI AG). A decision on this potentially landmark case is expected in summer 2017.