European Trade Union Institute, ETUI.

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European Company (SE)

Since October 2004, companies have had an additional option when choosing a suitable corporate form: a “European Company” (Societas Europaea, SE) is a commercial company set up in the form of a European public limited-liability company. Whereas the main aim of the SE legislation is to enable companies in Europe to operate their cross-border businesses under the same corporate regime, it also represents a milestone in the field of employee involvement, most notably with regard to participation at board level.

The SE legislation is made up of the European Company Statute (Council Regulation 2157/2001/EC) and its supplementary Directive on the involvement of employees (Council Directive 2001/86/EC). An SE cannot be established without an arrangement having been reached on the issue of employee involvement. The procedure resembles that laid down in the European Works Council (EWC) Directive. Instead of prescribing detailed provisions on how employees have to be involved, the Directive provides for an agreement negotiated between the participating companies and a special negotiating body representing the employees. Additionally, it provides for obligatory standard rules in cases where the negotiating partners fail to reach an agreement. A key innovation stems from the fact that the SE Directive contains provisions for a legally binding procedure of company-level negotiations, not only on a transnational employee information and consultation body (SE Works Council) but for the first time also on participation at board level. This obligatory link between the new European corporate structure and the positioning of a European employee interest representation body plus the presence of employee representatives in company boardrooms (where applicable), based on an agreement, constitutes a new development in terms of the SE as a driver of Europeanisation.

The ETUI has been closely following the introduction and practice of the SE since 2003. Through its research network SEEurope it provides expertise on the topic and regularly issues analytical and statistical information. The number of SEs has increased steadily year by year. In June 2011, the ETUI’s European Company (SE) Database exceeded the total of 800 active SEs. However, this rather impressive total should not blind observers to the fact that many SEs do not conform to the standard definition, for they are, in their overwhelming majority, SEs without employees (‘empty SEs’) and/or even without a specific business purpose (‘shelf SEs’). This implies some serious issues also with regard to employee involvement.