Corporate structures

Corporate structures denote the system of ownership and control that connects different undertakings belonging to a single group. It has particular relevance in the case of large enterprises. It specifically refers to the mechanisms of ownership and control that inform management decision-making, most particularly at senior level. These structures are often complex and opaque, and this can present difficulties for the regulation of employment and industrial relations, whether through legislation or collective bargaining.

One issue is that the corporate structure may not be readily evident to employee representatives. For example, the first case decided by the European Court of Justice concerning Directive 94/45/EC on the establishment of a European Works Council (EWC) involved a German works council (Betriebsrat) that had requested information about a company’s links with associated companies in other Member States, and their number of employees, with a view to establishing an EWC. The European Court of Justice held that, where information relating to the structure or organisation of a group of undertakings forms part of the information essential to the opening of negotiations for the setting-up of a European Works Council, an undertaking within the group is required to supply that information, which it either possesses or is able to obtain, to the internal workers’ representative bodies requesting it. Communication of documents clarifying and explaining the information may also be required, where necessary, in order for employees or their representatives to determine whether or not they are entitled to request the opening of negotiations (Betriebsrat der bofrost Josef H. Boquoi Deutschland West GmbH & Co. KG v. Bofrost Josef H. Boquoi Deutschland West GmbH & Co. KG, Case C-62/99, Opinion of Advocate-General A. Saggio, 26 September 2000, decision of the ECJ, 29 March 2001).

See also: consultation in the enterprise; corporate social responsibility; European company; European Works Councils; management and labour; restructuring; transnational enterprise.