The CJEU on Involvement of Employees in Decision-Making within a European Company

Last week (18 October 2022), the Court of Justice delivered the judgment on the case No C-677/20, IG Metall e ver.di c. SAP SE, SE-Betriebsrat der SAP SE.

The dispute in the main proceeding arises on the occasion of the transformation of a German company (SAP) into a European company (SAP SE) and deals with the participation of employees and trade unions representatives in the transformed company. In particular, trade unions challenge that the procedures to elect their representative in the reduced supervisory board of SAP SE are in breach of Art 4(4) of Directive 2001/86/EC, as they do not “provide for at least the same level of all elements of employee involvement as the ones existing within the company to be transformed into an SE”.

Considering that, as per the agreement on arrangements for the involvement of employees, before the transformation, the trade union representatives had been nominated by the trade unions represented and had been elected on the basis of a ballot that was separate from that established for the election of the other representing the employees, and considering that, after the transformation, a separate ballot for trade union representatives was not envisaged, the German Federal Labour Court (Bundesarbeitsgericht) referred the question of the compatibility of the new procedures with Art 4(4) of Directive No 2001/86.

In the decision, the Court of Justice stated that Art 4(4) of Directive No 2001/86 “must be interpreted as meaning that the agreement on arrangements for the involvement of employees applicable to a European company (SE) established by means of transformation, as referred to in that provision, must provide for a separate ballot with a view to electing, as employees’ representatives within the SE’s Supervisory Board, a certain proportion of candidates nominated by the trade unions, where the applicable national law requires such a separate ballot as regards the composition of the Supervisory Board of the company to be transformed into an SE, and it is necessary to ensure that, in the context of that ballot, the employees of that SE, of its subsidiaries and of its establishments are treated equally and that the trade unions represented therein are treated equally”.

On the European company (SE), the readers of RDIPP may refer to:

Malatesta, 2002, No 3, 613 ff.;
Villata, 2004, No 4, 901 ff.