euro watch: Law allows worldwide firms to be one entity

After 41 years of discussion
and deadlock, the European Company Statute, or Societas Europaea, will finally
be passed. It will be adopted early next year and come into force in 2004.

Political agreement was reached
on the regulation to establish a European Company Statute and on the related
directive concerning worker involvement in European companies just before

The Commission estimates that
the agreement could reduce costs for businesses in Europe, by up to 30bn euros.

The European Company Statute
will give companies operating in more than one member state the option of being
established as a single company under community law. They will be able to
operate throughout the EU with one set of rules and a unified management and
reporting system rather than all the different national laws of each member
state where they have subsidiaries. The applicable law will then depend upon in
which state the company decides to establish.

A European Company Statute can
be set up by the creation of:

A holding company
or a joint subsidiary
By the merger of companies located in at least two member states
By the conversion of an existing company set up under national law.

Worker involvement is regulated
under the directive, which requires negotiations with a body representing all
employees of the companies concerned. If an agreement cannot be reached, the
directive sets out standard principles in an annex. Companies which work under
the statute would be obliged to provide regular reports detailing business
plans, production and sales levels and implications for the workforce,
management changes, mergers divestments, potential closures and layoffs. These
reports would be the subject of regular consultation and information to an
employee representative body.

In the case of a European
company created by a merger, the standard principles on worker participation
must be applied when at least 25 per cent of staff had the right to participate
before the merger.

Priorities for the Swedish

A priority for the new Swedish
presidency, the directive on minimum requirements for worker information and
consultation rights in EU companies, will be on the agenda of the first formal
Social Affairs Council on 6 March.

The directive would force
companies with 50 or more staff to consult with workers on issues such as
redundancies and plant closures. This proposal will apply to national companies
with a threshold of 50 staff in any one member state and those employing
20-plus staff in any one member state. Eurostat estimates 52 per cent of
employees and 2 per cent of enterprises would be covered by the directive.

Carrying on the social

In January, an informal
ministerial meeting entitled Gender Equality and Social Insurance was held in
preparation for the Stockholm Summit on 23-24 March.

The focus was "on the
position of equal opportunities between women and men within the current
process of cooperative exchange on the modernisation of social protection which
has been in progress since the EC’s communication of July 1999".

This is part of the scrutiny of
employment and social policy in order to create a real balance and equality. It
is aimed at assessing proactive EU policy to counterbalance the effects of such
social challenges as the demographic time bomb and its implications for the
employment market as well as social policy and pensions; equal treatment and
opportunity for all.

Questions the presidency is
asking ministers include:

Should social protection
promote higher and better quality employment participation among women aiming
to enhance their autonomy and security, while taking account of existing
incentives and disincentives for women’s labour market participation?

Does the current economic and
employment climate, in terms of the development of EU policy processes, present
positive opportunities for revising tax and benefit structures in order to
identify and eliminate disincentives for women’s participation in the labour

The results should be available
before the Swedes hand over the presidency to Belgium in June.

Date to note: 17
May 2001 –  Brussels

The European Human Resources
Network meets with European Commission Employment and Competition Directorates
to discuss employment and social implications of merger and acquisition.

Susan Gibas secretary general of the European Human Resource Network, a
cross-sectoral information network for European employers and HR strategists
dealing with issues of employment and the labour market in Europe. Contact

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