ECS employee involvement Directive not yet transposed

PDF version Printer-friendly version

Slovenia, along with many other EU Member States, did not meet the October 2004 implementation deadline for transposing the EU Directive on employee involvement in the European Company Statute. The delays were largely caused by the general election in October 2004 and the preceding election campaign. As of January 2005, the draft law to transpose the Directive had not been published.

EU Council Regulation (EC) No. 2157/2001 on the Statute for a European Company (or Societas Europaea, SE) gives companies the option of forming a European Company (SE) which can operate on a Europe-wide basis and be governed by Community law directly applicable in all Member States (rather than national law). It came directly into force across the EU on 8 October 2004. By the same date, Member States had to transpose into national law Council Directive 2001/86/EC supplementing the Statute for a European Company with regard to the involvement of employees (EU0206202F), or ensure that by then management and labour had introduced the required provisions by agreement. The Directive lays down the employee involvement provisions to apply to SEs - providing for negotiations between management and employee representatives in each SE on the arrangements to apply, with a set of back-up statutory 'standard rules' where no agreement is reached. Involvement constitutes the information and consultation of employees and, in some cases, board-level participation.

Slovenia, along with many other EU Member States, did not meet the transposition deadline of 8 October 2004 for the SE employee involvement Directive or make the necessary changes to comply with the SE Regulation by that date.

Implementation of the Regulation

The implementation process of the SE Regulation and Directive has been examined by Janja Bedrac of the Faculty of Law at the University of Maribor (Pravna fakulteta, Univerza v Mariboru, PFUM) in a country report on Slovenia for the SEEUROPE project on 'Workers' participation at board level in the European Company (SE)', conducted by the European Trade Union Institute (ETUI) and co-funded by the Hans Böckler Foundation.

The report states that implementation of the SE Regulation will take the form of an amendment to the Law on Companies (LC) regulating a number of issues left open by the Regulation, while seeking to maintain the integrity of Slovenian company law. The Ministry of the Economy (Ministrstvo za gospodarstvo, MG) is responsible for the preparation of the draft amendments. The most important issues to be regulated are the role of non-executive members of the administrative organ in SEs with single-tier board system and the rights of minority shareholders. In general the amendments follow the example of Germany, in whose traditions Slovenian company law is predominantly rooted.

On 11 November 2004, according to the Government Public Relations and Media Office (Urad vlade za informiranje, UVI), the outgoing government confirmed draft amendments to the Law on Companies that would implement international accounting standards in Slovenia and provide the legal framework for SEs. The draft amendments were prepared for the government by a group of experts from the PFUM. In December 2004, parliament adopted an amendment to the Law on Companies referring only to the implementation of accounting provisions of EU company law (the fourth, seventh and eighth company law Directives, with an implementation deadline of 1 January 2005). The amendment was enacted quickly so that international accounting standards could enter into force in 2005. This includes new regulations on valuation, especially of 'fair value', and provisions raising the thresholds for the separation of small, medium and large companies for accounting purposes. The introduction of international accounting standards means that listed companies will be obliged to compile consolidated annual reports. While this will be optional for non-listed companies, banks and insurance companies will have to comply from 2007.

According to Sasa Prelic of the PFUM, the new government that took office after the October 2004 general election held back the adoption of the amendments to the Law on Companies concerning the implementation of the SE Regulation. The reason was that the implementation of international accounting standards was extremely urgent and therefore a shortened procedure was used to adopt the relevant amendments. However, it was not possible to adopt the whole package of amendments under shortened procedure because this package was too large. Marijan Kocbek, also of the PFUM, adds that the amendments concerning implementation of the SE Regulation will most probably be adopted in the middle of 2005. This has also delayed the implementation of the SE employee involvement Directive, as did the October 2004 elections and the preceding election campaign.

Implementation of the employee involvement Directive

The country report for SEEUROPE states that the Directive on employee involvement in the SE will be implemented within the scope of Slovenia's employee involvement legislation. However, this will be done by enacting a special law and not by amending either the 1993 Law on the Participation of Workers in Management (SI0311102F and SI0312101F) or the 2002 Law on European Works Councils (SI0208103F). The former will therefore remain the basic law in this field, containing primarily national-level provisions, while particular fields with supranational application will be regulated in specific laws. Hence, each law will be a 'stand-alone' measure with its own principles, objectives and legal logic.

The Ministry of Labour, Family and Social Affairs (Ministrstvo za delo, družino in socialne zadeve, MDDSZ) has responsibility for preparing the draft Law on Employee Involvement in a European Company (LEIEC). Its point of departure will be the preservation of existing Slovenian legal principles in the area of employee involvement and cohesion of the law with amendments to the Law on Companies There have been a number of delays in preparing the implementing law. The most recent was caused by the fact that the new government held back the adoption of the amendments to the Law on Companies concerning the implementation of the SE Regulation (see above). and hence no draft LEIEC has been prepared yet.

In the same way as the Law on European Works Councils ( SI0409102F), when the draft LEIEC is issued it will be submitted to the Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS) (SI0207103F) so that the social partners can give their opinions. Once the social partners have given their opinions on the draft legislation implementing the SE Directive, a formal proposal will be submitted to parliament for adoption.

The Association of Employees' Councils of Slovenian Companies is planning an expert meeting to examine in detail the issues surrounding SEs.


Perhaps surprisingly, there is practically no national-level debate in Slovenia on the SE Regulation and the accompanying Directive on employee involvement. The trade unions especially should demand that the process of transposition into national law be speeded up and examine issues such as preparations for future negotiations on involvement in SEs and the support that should be given to employee representatives.

On the other hand, companies have shown considerable interest in the SE form. Experts say that this is because of the single-tier board system that SEs may have. Some fear that it is probable that, by forming an SE and adopting the single-tier structure, Slovenian companies want to avoid employee representatives sitting on the supervisory board of the company. (Stefan Skledar, Institute of Macroeconomic Analysis and Development)

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment

Click to share this page to Facebook securely

Click to share this page to Twitter securely

Click to share this page to Google+ securely

Click to share this page to LinkedIn securely