1. The ETUC welcomes the initiative to reach an acceptable compromise on workers’ participation in cases of cross-border mergers of companies. The position adopted by the Council of the European Union on 25 November 2004 [1] contains important improvements but at the same time endangers certain guarantees enshrined in the SE Directive on employees’ involvement [2].

2. In particular, the ETUC welcomes the improvements in the provision on employees’ participation of the new Council draft in comparison with the Commission’s first proposal:

 The provisions of the SE Directive will, in principle, apply also in cases where employees already enjoyed participation rights before the merger (Article 14). The Commission’s proposal only referred to the national law without the specific guarantees contained in the SE Directive.

 All three forms of cross-border mergers mentioned in Article 1 of the Directive are now clearly covered (Article 14). The Commission’s proposal left doubts in this respect.

 The report on the consequences of the merger must include the description implications for employees (Article 3).

3. Conversely, there are areas of concern when comparing Article 14 of the new Council draft with the standards provided for in the SE Directive:
-It is not absolutely clear that also companies below a threshold of 500 employees are covered. Furthermore, the safeguards concerning the proportion of employee representatives in the administrative organ below the threshold of one third lack clarity.

 The rate of coverage of employees necessary for the application of the standard rules of the SE Directive is raised from 25 % to one third.

 Subsequent domestic mergers are only covered within three years after the cross-border merger. It is obvious that this clause opens the door for escaping from statutory workers’ participation after this period.

4. In its position adopted by the Executive Committee on 17-18 March 2004 the ETUC [3] had stressed the utmost importance of applying the SE rules on workers’ participation also in cases of cross-border mergers and transferral of registered offices. Without such an approach workers’ participation rights would be reduced. Furthermore, this approach contributes to a more coherent and thus better understandable legal framework. Therefore, in respect of the crucial points mentioned above the ETUC would like to reiterate the importance of this approach in the forthcoming discussions, mainly in the European Parliament.

5. Referring to all the other points mentioned in the ETUC’s position the following provisions, in particular in Article 14, should be amended:

 The provision which could be interpreted as limiting the application of the SE Directive to companies with more than 500 employees should be clarified in order to avoid specific thresholds in this respect. It would not be acceptable to restrict the participation rights of workers provided for in national laws for companies with less than 500 employees (Austria, Czech Republic, Denmark, Finland, Hungary, Slovak Republic, Sweden).

 Furthermore, it should be clarified that the proportion of employees representatives in the adminstrative organ below one third may not be limited and, therefore, at least in these cases the general rule of the highest proportion must apply.

 Since there is no justification for introducing a 33 1/3% threshold for the application of the SE standard rules; the 25% provided for in the SE Directive should be maintained.

 Safeguarding of workers’ participation in subsequent domestic mergers should not be limited in time.
The report on the implications of the cross-border merger including the implications for employees should be forwarded to the employees and their representatives (Article 3).

6. These demands are all the more important as the Commission prepares a proposal on the cross-border transferral of the registered office of a company (14th Directive). There should be no further possibility for employers to evade from workers’ participation as guaranteed by the SE Directive and by the 10th Directive when transferring their registered offices.

7. Against this background the ETUC insistently requests the European legislative institutions and, in particular, the members of the European Parliament to take into account its demands. It should be realised what Social Europe can gain from statutory and high level workers’ participation linked to the particular role of trade unions. Moreover, it should be a common interest to make a European legal framework more attractive for workers.