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.
Companies doing cross-boarder business in Europe can choose between several national and European legal alternatives. In the centre of this paper, are two of them: alternatives provided by the freedom of establishment and the European Company Statute. The focus of this paper is not on the practical implications of these two action alternatives for enterprises, but on the judicial issues arising in this context. After presenting the current rulings of the European Court of Justice regarding the freedom of establishment and the basic contents of the legal acts, council regulation No. 2157/2001 and council directive No. 2001/86/EC, regarding the European Company (SE), two issues of great importance are examined in this context: the issue of the governing law and the issue of harmonisation. Finally it is presented to the reader to what extent those European provisions are consistent, respectively, restrict one another.
Worker participation has been subject to controversial debate in Europe. Although the member states' traditions in industrial relations and especially in worker participation vary greatly, the Council of Ministers agreed on some directives in this regard, recently: the EWC directive (94/45/EC) and the information/consultation directive (2002/14/EC), and the directive (2001/86/EC) supplementing the Statute for a European Company with regard to the involvement of employees, which emphasises voluntary negotiations between employees' representatives, a so-called special negotiating body, and the management. The latter directive does not only provide information and consultation procedures but also provisions regarding board-level representation. For that reason, the focus of this paper is on the European Company (Societas Europaea = SE). In this context, the fundamental provisions regarding the SE are presented. After discussing some exemplary cases in order to demonstrate the practical implications of this legal initiative regarding employee involvement, some issues arising are examined.