Community-scale undertaking

Definition

community-scale undertaking is ‘any undertaking with at least 1,000 employees within the Member States and at least 150 employees in each of at least two Member States’, as set out in the European Works Councils Directive (Article 2(1)a).

  • European Parliament and the Council: Directive 2009/38/EC of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees

Background and status

Given the complex structure of many such community-scale undertakings, the European Works Councils Directive also defines a group of undertakings as a ‘a controlling undertaking and its controlled undertakings’ (Article 2(1)(b)).

The concept of a controlling undertaking is explained in Article 3(1) of the directive as ‘an undertaking which can exercise a dominant influence over another undertaking (the controlled undertaking) by virtue, for example, of ownership, financial participation or the rules which govern it’. This dominant influence can be exercised in various ways, for instance, by:

  • financial ownership of a company’s capital
  • controlling a majority of votes (in a general assembly of shareholders)
  • appointing more than 50% of that company’s administrative, management or supervisory body.

The directive contains also a definition of a ‘Community-scale group of undertakings’. It is ‘a group of undertakings with at least 1 000 employees within the Member States’, and ‘at least two group undertakings in different Member States’ and at least one group undertaking with at least 150 employees in one Member State and ‘at least one other group undertaking with at least 150 employees in another Member State’.

Right to be informed

In Case C-62/99 – Bofrost, the Court of Justice upheld the right of workers to information under the European Works Council Directive : ‘as regards employees of an undertaking forming part of a group of undertakings … their right to be informed therefore exists even before it is ascertained whether or not there exists within the group a controlling undertaking’.

The Court therefore ruled that ‘an undertaking which is part of a group of undertakings is required to supply information to the internal workers’ representative bodies, even where it has not yet been established that the management to which the workers' request is addressed is the management of a controlling undertaking within a group of undertakings’.

Related dictionary terms

Central management of the enterprisecorporate structuresEuropean works councilsinformation and consultationinformation in the enterprisetransnational enterprise.

 

Please note: the European industrial relations dictionary is updated annually. If errors are brought to our attention, we will try to correct them.

 

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