There is no existing employee board-level representation in Latvia and the transposition of the directive evoked little interest.
There is no existing board-level representation for employees in companies in Latvia and the transposition of the directive on employee involvement in European companies produced little or no public debate. Both unions and employers were consulted over the legislation to implement the directive.
Directive was transposed by law in March 2005 six months after the October 2004 deadline
The directive on employee involvement in European companies was transposed through the following legislation published in the Latvian official gazette on 24 March 2005: European Company Law ( Eiropas komercsabiedrību likums). This legislation deals with both the implementation of the directive and the changes necessary to adapt Latvian company legislation to the Regulation on European companies.
Special negotiating body (SNB)
Latvian employees can decide to leave their representation in the SNB in the hands of their existing representatives – normally the union. However, they can also decide to elect them themselves.
Latvian employees may decide that their existing employee representatives should represent their interests in the SNB. (In Latvia employee representatives will normally be trade union representatives, although it is also possible to elect “authorised workplace representatives”.) Where there are both union and authorised workplace representatives, the SNB members are chosen in proportion to the number of employees represented, although with at least one coming from each company involved, provided this is not more than the total number to which the Latvian employees are entitled. Where the number of companies involved, is greater than the number of SNB members permitted, the representatives agree who should participate. Where agreement cannot be reached, the Latvian SNB member or members come from the company with the largest number of employees.
If the employees decide not to leave their representation in the hands of their existing representatives, Latvian SNB members are elected by all employees (Section 19).
The presence of external union representatives on the SNB is neither specifically prohibited nor specifically permitted by the Latvian legislation.
The section of the Latvian legislation on the choice of the Latvian members of the SNB does not refer to the issue as to whether or not they may be external union representatives (Section 19).
Funding of more than a single expert not specifically excluded.
The section of the Latvian legislation on funding states only that “any expenses relating to the functioning” of the SNB will be borne by the companies(Section 26) and elsewhere it states that the SNB “shall have the right to involve experts” (Section 23). This implies that the companies could be required to bear the costs of several experts.
Standard rules under the fallback procedure
There are no specific rules on how Latvian members of the SE representative body are chosen.
The Latvian legislation does not set out in detail how the Latvian members of the SE representative body – known as the representative committee (Pārstāvniecības komitejas) – should be chosen. It states only that its members should be “elected by the employees representatives or in absence thereof, by all the employees as authorised representatives of the employees in accordance with the procedures laid down in the Labour Law”. In the Latvian case, these are presumably either trade union representatives or the elected “authorised workplace representatives” (see section on SNB). However, in this case, unlike that of the SNB, it is clear that they must be employees of the company (Section 31).
The company should bear the costs of the representative body, including one expert.
The company is obliged to bear the costs of the representative body. This includes the costs of “one expert” (Section 32). This limit is in contrast to the arrangements for the financing of experts working with the SNB, where more experts can be financed (see section on SNB).
Either the representative body or all employees elect board members.
The Latvian legislation does not provide detailed rules for the choice of employee board-level representatives under the fallback procedure. It simply says that they can be chosen either by the employees or by the representative committee (Section 33).
Misuse of procedures and structural change
This is not covered in the Latvian legislation.
The Latvian legislation contains no reference to the misuse of procedure, which would allow an SE to be set up simply to limit employee involvement.
The impact of structural changes in the SE is not covered in the Latvian legislation.
There is no automatic right to renegotiate the agreement if there are changes in the structure of the SE, as structural change is not covered in the Latvian legislation.
Unions and employers were consulted on the introduction of the legislation and they were broadly supportive of the proposals.
Unions and employers were involved in the discussions with the government, both on the wording of the initial draft to transpose the directive on employee involvement in European companies into Latvian law, and then when the proposals were submitted to the tripartite council (NTSP). There were no major clashes on the issue with both sides broadly supporting the proposals.
L. Fulton (2008) Anchoring the European Company in National Law - Country Overviews (online publication, prepared for worker-participation.eu)
Agnese Puntuza (Latvian Trade Union of Construction Workers)
Council Regulation 2157/2001 on the statute for a European Company (SE) was implemented in Latvia by the Law on European commercial companies, which integrated Directive 2001/86/EC. The Law on SEs was adopted on 10 March 2005 and came into force on 7 April 2005.
The text of the directive was transposed into Latvian legislation as closely as possible to the original, without real reference to the country’s specific needs. Employees’ participation rights in an SE are based on the employee participation rights existing before the SE was established.
During preparation of the law there were consultations with the Latvian Free Trade Union Confederation and the Employers’ Confederation. Overall, they supported adoption of the draft law, making a number of new proposals, some of which were introduced into the text. There were no direct consultations with foreign experts, but the Danish experience in this respect was referred to.
Nothing has been done to inform the general public and a communication plan for that purpose has not been developed. A European Company, as a new kind of holding company, can be registered in the Commercial Register of the Republic of Latvia by means of a special application form. No SE had been registered by April 2006.