COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 14.11.1995 
COM(95) 547 final 
COMMUNICATION FROM THE COMMISSION 
ON WORKER INFORMATION AND CONSULTATION 

COMMUNICATION FROM THE COMMISSION ON WORKER 
INFORMATION AND CONSULTATION 
I. INTRODUCTION 
1 In the White Paper on European Social Policy (Chapter III, point A.6), the 
Commission states its intention to study, following the adoption of the directive 
on transnational information and consultation of workers in Community-scale 
undertakings and groups of undertakings, "its impact on the seven proposals for 
Council directives which concern or contain provisions concerning information and 
consultation of employees which are currently on the table of the Council". 
In keeping with its announced attention, the Commission returned to this subject 
in points 4.2.3 and 4.2.4 of the Medium-term Social Action Programme: 
"4.2.3 - Information and consultation of workers: the Commission is currently 
examining whether and to what extent the system of workers' involvement 
established by the information and consultation directive could help the adoption 
of the four amended proposals for Regulations concerning the European Company 
Statute, the Statute for a European Association, the Statute for a European 
Cooperative and the Statute for a European Mutual Society. 
4.2.4. Given that little progress has been made on the information and 
consultation provisions of the draft "fifth" directive (Annex I), the Commission 
will consider the possibility of deleting those provisions from the proposal during 
1995. In that case, having regard to the Parliament's opinion on the White Paper, 
the Commission will initiate consultations with the social partners on the 
advisability and possible direction of Community action in the field of information 
and consultation of employees in national undertakings."1 
2 The subject of information and consultation is politically sensitive and often gives 
rise to heated discussions. The purpose of the present communication is not to 
The above-mentioned proposals are as follows (in their most recent version): amended proposal 
for a Council Regulation (EEC) on the Statute for a European Company and amended proposal 
for a Council Directive supplementing the Statute for a European Company with regard to the 
involvement of employees (OJ C 176, 8.7.91); amended proposal for a Council Regulation (EEC) 
on the statute for a European association and amended proposal for a Council Directive 
supplementing the statute for a European association with regard to the involvement of employees 
(OJ C 236, 31.8.93, p. 1 and p. 14); amended proposal for a Council Regulation (EEC) on the 
statute for a European cooperative society and amended proposal for a Council Directive 
supplementing the statute for a European cooperative society with regard to the involvement of 
employees (OJ C 236, 31.8.93, p. 17 and p. 36); amended proposal for a Council Regulation 
(EEC) on the statute for a European mutual society, and amended proposal for a Council Directive 
supplementing the statute for a European mutual society with regard to the involvement of 
employees (OJ C 236, 31.8.93, p. 40 and p. 56); amended proposal for a Fifth Directive founded 
on Article 54 (3) (g) of the EEC Treaty concerning Che structure of public limited companies and 
the powers and obligations of their organs (OJ C 240 of 9.9.83). 
4 A, 
seek to re-open the debate in a controversial way but rather to attempt to take 
stock of the present situation and, faced with a large number of blocked proposals, 
to explore whether there might not be new ways of moving forward. 
The Commission's wish is to put forward options for discussion. The Commission 
remains committed to the fundamental principles regarding the need to ensure 
adequate safeguards at European level for the information and consultation of 
employees which motivated its original proposals in this area but believes that 
only an innovative approach will offer a prospect of real progress. 
Given the complexity and the sensitivity of the discussions currently under way, 
the Commission, therefore, considers it helpful - prior to taking any new initiatives 
in this area - to send to the Council, Parliament and the Economic and Social 
Committee this present document in order to allow for the fullest possible debate 
on the options set out in Part IV. 
In the same spirit, the present Communication is also addressed to the social 
partners at European level in accordance with the third indent of point 28 of the 
Communication of 14 December 1993 concerning the application of the 
Agreement on social policy presented by the Commission to the Council and to 
the European Parliament2. Although the Commission has not yet finalised its 
position on which approach should be adopted, it considers the present 
consultation of the social partners to be that referred to in Article 3 (2) of the 
Agreement on Social Policy annexed to the Protocol on Social Policy annexed to 
the Treaty on European Union, if this route were to be taken. 
II. ASSESSMENT OF COMMUNITY ACTIVITIES RELATING TO 
EMPLOYEE INFORMATION, CONSULTATION AND 
INVOLVEMENT 
The adoption on 22 September 1994 of Council Directive 94/45/EC 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 employees3 makes it possible and obligatory to take 
stock of Community measures in the area of employee information, consultation 
and involvement. In fact, the undeniable success represented by the adoption of 
this directive after 14 years of institutional debate and the support it has won 
among the social partners and the dynamics it has created between them stand in 
stark contrast to the lack of progress in discussions on other proposals tabled by 
the Commission since 1970 in this area or in the related area of the involvement 
of workers. 
COM(93) 600 final. 
OJ No L 254 of 30.9.94, p. 64. 
The Commission therefore believes that the time has come to analyse, with the 
Member States, the European Parliament, the Economic and Social Committee and 
the social partners at European level, the previous measures taken in this area, to 
try to identify the reasons for the different fate of its various proposals and to 
learn from past successes and failures. 
5 The history of the attempts to establish Community-level rules on employee 
information, consultation and involvement is closely linked to the history of the 
European Community itself. For many years now, this subject has been at the 
heart of the discussions on European social policy, the European social model and 
the preferred type of economic and social development in Europe. These 
discussions have been not only long, but also lively, controversial and, in some 
cases, even heated. 
This goes some way to explaining why the various measures taken by the 
European Commission in this area have aroused opposition. On the one hand, 
three proposals have been finalised: Directive 75/127/EEC of 17 February 1975 
on the protection of workers' representatives in the event of collective 
redundancies4, revised by Directive 92/56/EEC of 24 June 19925, Directive 
77/187/EEC of 14 February 1977 on the approximation of the laws of the Member 
States relating to the safeguarding of employees' rights in the event of transfers 
of undertakings, businesses or parts of businesses6 and the above-mentioned 
Directive on European Works Councils. On the other hand, a number of other 
proposals containing rules on employee information, consultation and involvement 
have been under discussion for a long time in the Council, but it has not yet 
proved possible to bring them to a successful conclusion: these are the above-
mentioned proposals for regulations on the statute for a European company, a 
European association, a European cooperative society and a European mutual 
society (and the associated directives on the involvement of employees) and the 
proposal for a fifth directive on the structure of companies. 
Two other Commission proposals have been with the Council for many years, viz. 
the Proposal for a Council Directive on informing and consulting the employees 
of undertakings with complex structures, in particular transnational undertakings7, 
known as the "Vredeling proposal", and the Proposal for a Council Directive on 
the establishment of a European Works Council in Community-scale undertakings 
or groups of undertakings for the purposes of informing and consulting 
employees8. However, it is no longer necessary to include the last proposal in this 
analysis of prospects, as it is the immediate precursor of the "European Works 
Councils" proposal, which, in a way, has replaced it. Furthermore, the 
OJ L 48 of 22.2.75. 
OJ L 245 of 26.8.92. 
OJ L6I of 5.3.77. 
OJ C 297 of 15.11.80, p. 3. The amended proposal was published in OJ C 217 of 12.12.83, p. 3. 
OJ C 39 of 15.2.91. The amended proposal was published in OJ C 336 of 31.12.91. 
m 
Commission has already indicated its intention to withdraw the proposal. The 
same applies to the "Vredelingproposal", although the Commission believes that 
it should not be withdrawn until a comprehensive solution to the whole problem 
has been found. 
The two sets of proposals covered in this document differ not only in terms of 
their success or failure, but also in that the first three proposals (the directives on 
"collective redundancies", "transfers of undertakings" and "European Works 
Councils,r) establish a model of involving workers in business decision-making 
under which their legitimate representatives are entitled to be informed and 
consulted on a number of important issues relating to the operation of the business 
or affecting their interests (which is also true of the "Vredeling proposal"), 
whereas the last five proposals (on "a European company", "a European 
association", "a European cooperative society", "a European mutual society" and 
for "the fifth directive") provide for forms of employee "involvement" 
(incorporation of employees into the supervisory board or the board of 
administration) which supplement or replace employee information and 
consultation. 
A detailed description of the main provisions of these Community instruments and 
these proposals may be found in the annex. 
The first point that can be made in this assessment is therefore that the 
Commission's proposals containing rules on informing and consulting employees' 
representatives have succeeded (apart from the "Vredelingproposal"), whereas its 
proposals for establishing European-level forms of employee involvement have 
failed. 
In addition to the failure represented by the never-ending discussions on proposals 
which have still to be adopted, the fact that there are nine different sets of 
Community legal rules (six of which at the basic proposal stage) applicable to 
different types of body or situation may seem to some to be unjustified or, at 
least, unnecessarily complex, given the relative simplicity of national bodies of 
legislation, which are normally comprehensive or, if not, much simpler. 
It should be pointed out as a contribution to the discussion that important reasons 
led the Commission - one might add, with the support of a number of Member 
States and social partners - to present the Council with such a large number of 
successive proposals, all of them pertaining to the involvement of employees in 
the operation of undertakings. In fact, for many years it proved impossible to 
establish general European-level rules on employee information, consultation or 
involvement9. Faced with this difficulty, the Commission, quite naturally, sought 
In fact, the adoption of the "European Works Councils" Directive was a landmark decision in the 
European Community, since the previously adopted Community provisions in this area cover 
specific situations in undertakings and employment relationships (imminent collective redundancy 
or business transfer). 
to achieve progress where it thought that this could be done most easily, but this 
approach did not prove any more successful. 
The Commission believes that the adoption of the "European Works Councils" 
Directive has put the problem in a completely different light. Now that it has been 
shown to be possible and even desirable to establish general legal standards in this 
area at European level, the next step will inevitably be to consider whether it is 
necessary to maintain a piecemeal approach. 
This assessment would be incomplete if it did not deal, if only in passing, with 
the consequences of the decades of deadlock in the institutional discussions of the 
six proposals which have not been adopted. First, there are the consequences for 
the image of the European Union in the eyes of its citizens, and especially of 
European workers, who cannot understand how it is possible for proposals 
designed to enhance their rights to be informed, consulted and involved in the 
running of the business to have been under discussion, in certain cases for 25 
years, without being adopted. There are also the serious consequences for 
businesses in the European Union, which have not been provided with the 
previously announced legal instruments to help them to adapt to the internal 
market and to competition at world level. 
As a result, for some time now there have been urgent requests for the statute for 
a European company to be adopted without delay. This would be an ideal legal 
instrument, especially for attracting private capital for the establishment of large 
trans-European networks. UNICE has demanded that this statute be provided to 
businesses in the European Union as soon as possible so that they can preserve 
and enhance their competitive position. It also believes that, now that the 
"European Works Councils" Directive has been adopted, European companies 
should be subject to the same employee information and consultation requirements 
as all businesses concerned by this Directive, since it would be hard to imagine 
sufficient reasons to justify special treatment for them. More recently, the request 
for rapid adoption of the statute for a European company was one of the main 
recommendations to the Heads of State and Government of the Competitiveness 
Advisory Group chaired by C. A. Ciampi. 
It should be emphasised that the main reason why these proposals have been 
blocked in the Council is because of the problems encountered by their provisions 
on employee information, consultation and involvement. 
The Commission believes that the blockage of its proposals in the Council for 
many long years, which is very damaging to the image of the Union and to the 
interests of citizens and European businesses, cannot be allowed to continue and 
that the political will and the strong spirit of compromise which led to the 
adoption of the "European Works Councils" Directive one year ago must now be 
reaffirmed so that the proposed instruments can be adopted as soon as possible. 
Ill PRINCIPLES AND OBJECTIVES OF THE NEW COMMUNITY 
APPROACH TO EMPLOYEE INFORMATION AND 
CONSULTATION 
This assessment means, in the Commission's view, that a new approach needs to 
be adopted in order to redefine the Community legal framework in force and the 
proposals on employee information, consultation and involvement. 
Several basic ideas emerged from the internal Commission debate announced in 
the White Paper on Social Policy and the Medium-term Social Action Programme. 
The Commission believes that, although it may still change its ideas in this area 
and the social partners should provide important input, it would be helpful to 
submit these ideas to the social partners at European level. In the same way, 
before taking any measures in this area, the Commission wants to broaden the 
discussion to include the Member States, the European Parliament and the 
Economic and Social Committee. 
First, the principle ol' simplification. As mentioned in point 5, the European 
Community currently has a general legal framework providing for employee 
information and consultation at transnational level (the "European Works 
Councils" Directive) and specific provisions providing for employee information 
and consultation at national level in specific circumstances (collective redundancies 
and business transfers). If the proposals which are currently with the Council were 
adopted, these three bodies of legal rules would be supplemented by the legal 
framework established by the "Vredeling" Directive and five other specific legal 
frameworks, all of them different, albeit with obvious similarities, and each of 
them applicable to a particular type of entity (the European company, the 
European association, the European cooperative society, the European mutual 
society and public limited companies). 
The Commission is considering whether this is an appropriate prospect for a 
situation - industrial relations - in which the legal status of the employer does not 
play a key role and, in any event, does not seem to warrant fundamentally 
different rules for a public limited company, an association, a mutual society and 
an entrepreneur as a physical person or in any other form. Experience at national 
level shows that any differences in systems of employee information, consultation 
and involvement are usually due to the size of the undertaking, the number of staff 
or factors which may affect the actual rights and obligations of the people subject 
to collective agreements, of which the legal form of the employer does not 
normally play a key role. 
The fact that Community action in this area should not be designed merely to 
approximate national systems or to establish minimum requirements at Community 
level only increases the misgivings currently caused by such a wide, detailed and 
diverse set of adopted or proposed Community instruments. 
^^w 
If these arguments are accepted, the alternative would be to simplify this 
diversified approach by providing only for the establishment of general overall 
legal frameworks at European level, which could naturally be developed and 
fleshed out by the Member States if they wished. In an extreme form, this 
approach could mean that there would be only two general frameworks at 
European level on informing and consulting employees: one governing the 
transnational aspects (which already exists, now that the "European Works 
Councils" Directive has been adopted) and the other governing the national 
aspects. 
The latter would require the adoption of a new Community instrument, and this 
raises a number of questions as to its nature (approximation of legislation or 
establishment of minimum requirements) and the legal basis to be used (Treaty or 
the Agreement on Social Policy in the Maastricht Treaty). 
The Commission is aware of the misgivings which an initiative of this kind may 
cause among certain Member States and social partners as far as the principle of 
subsidiarity is concerned. It understands the arguments of those who might cite the 
lack of the transnational element in this new instrument to deny, in the name of 
this principle, the need to establish Community-level rules in this area. However, 
the Commission believes that, given the current state of affairs, it is necessary to 
establish whether arguments of this kind should take precedence over the 
unquestionable need to adopt the above-mentioned proposals, which are in the 
interests of all concerned. 
In any event, the Commission believes that this new single instrument would be 
more in keeping with the principles of subsidiarity and proportionality than the 
large number of instruments currently proposed. This would be true, given the 
need to pursue the objectives referred to in Articles 117 and 118 of the Treaty and 
in Article 1 of the Agreement on Social Policy. (Moreover, this Agreement 
specifically mentions the information and consultation of workers among the new 
areas of responsibility explicitly granted to the European Union (cf. the third 
indent of Article 2 (1) of the Agreement).) Attention also must be paid to the need 
to ensure an harmonious functionning of the internal market and to avoid 
distortions of competition. Lastly, the general nature of the provisions which could 
be introduced, which would make it a reference framework setting out, quite 
simply, the major principles and basic rules in this area, would ensure compliance 
with the principle of proportionality and overcome the misgivings of those who 
might be afraid of an excessively rigid and detailed instrument. 
10 This new approach could also be justified on the grounds of the coherence of 
Community law and European Community social policy. The way in which the 
discussions on this subject have been conducted in the Union's institutions has led 
to an anomalous situation, to say the least. On the one hand, the Community has 
adopted general legal rules concerning employee information and consultation at 
transnational level and specific rules concerning employee information and 
consultation at national level in the particular situations of an imminent collective 
redundancy or business transfer. On the other hand, there is no general framework 
on information and consultation at national level, which is all the more regrettable 
since the provisions of the "collective ^redundancies" and "business transfers" 
Directives can only be fully effective where this general framework for informing 
and consulting employees' representatives exists (which is fortunately the case in 
13 Member States). 
The contribution which this new framework could make is obvious. On the one 
hand, it could facilitate the task of simplification referred to above, as it would no 
longer be necessary to provide for specific rules for each of the entities covered 
by the above-mentioned proposals. This would make it much easier to adopt these 
proposals. On the other hand, the provisions of Community legislation in force 
which require employees' representatives to be informed and consulted prior to 
collective redundancies and business transfers would benefit considerably from the 
establishment of this general framework. This is because the strategy of prevention 
which underpins them, which is so difficult to apply when information and 
consultation procedures are isolated and limited to cases of imminent collective 
redundancies or business transfers, could be developed most effectively against a 
background of stable and permanent information and consultation procedures, 
which is the only way of ensuring that employment management is genuinely 
forward-looking. 
11 The third principle preferred by the Commission is based on pragmatism and 
balance and concerns the strength and specific content of the rules to be 
established at European level. 
The Commission believes it to be no accident that the measures to establish 
employee information and consultation rules at European level have been virtually 
a total success, while the more ambitious measures to expand the coverage of the 
traditions and practices of employee involvement to the whole Community, 
especially by incorporating workers into supervisory boards or boards of 
administration, have failed. 
The discussions in the Council, which have been at once rich and disappointing, 
have shown just how difficult it is to achieve a sufficient consensus among the 
Member States for the adoption of rules on involvement. However, they have also 
shown the broad measure of agreement on the Community rules on informing and 
consulting employees' representatives, which has led to the adoption of the three 
Community instruments in force in this area. 
Against this background and buoyed by the considerable success encountered by 
the "European Works Councils" Directive among the players in industry, the 
Commission is considering whether a form of Community action in this area, 
which, while not ideal, is at least possible and feasible, has not been found. The 
never-ending discussions on the types of involvement are leading the Commission 
increasingly to the view that, as things stand, success is most likely using a 
solution along the lines of the "European Works Council" Directive. 
This view is not based on pragmatism alone. The Commission is closely watching 
the current experiment with the implementation of the "European Works Councils" 
Directive. Although it is too early to draw all the lessons from this experiment, 
the interest and dynamism shown by the social partners in implementing this 
directive, especially by anticipating its transposition into national legislation by 
concluding agreements, indicate that, while the ways of involving workers and 
their representatives in the decision-making process which have been established 
in businesses by this Directive are limited to information and consultation 
procedures, they could constitute an acceptable minimum framework at European 
level. This minimum framework would not, of course, prevent the survival nor the 
evolution of more elaborated systems and practices at national level. 
12 The fourth principle is that of the generality of all Community rules. While the 
Commission accepts that Community action should be based on the framework 
established by the "European Works Councils" Directive, it considers that this 
approach will not meet the objective of ensuring the harmonious operation of the 
internal market and of increasing the protection of European workers and their 
involvement in the running of the business unless the rules in question are applied 
throughout the European Community. This is particularly true of the Community 
instruments which are addressed, without limitation, to all Member States and 
which are designed to benefit all businesses and organisations which pursue their 
activity on the territory of all Member States (as is the case for the six above-
mentioned proposals). In such circumstances, there seems to be little justification 
for one or more countries being granted an exemption in this area, which would 
give an unfair advantage to the businesses that have their registered office there 
rather than in another Member State. 
IV POSSIBLE DIRECTION FOR COMMUNITY ACTION 
13 On the basis of the reasons stated above and given the current situation, various 
options are possible. 
Option 1 : maintain the status quo 
This option would mean continuing the discussions in the Council on the basis of 
the six above-mentioned proposals and maintaining the fragmented approach to 
Community action on employee information, consultation and involvement. The 
main disadvantage of this option is that, as things stand, it seems to offer little 
hope of progress. 
Option 2: global approach 
This option involves a change in the way of looking at the whole question. Instead 
of attempting to establish, at Community level, sets of specific rules for each 
entity to be covered by Community rules on company law, attempts would be 
made to establish general frameworks at European level on informing and 
consulting employees. This would make it possible to withdraw the proposals for 
directives annexed to the proposals for regulations on the statute for a European 
company, a European association, a European cooperative society and a European 
mutual society. The same would apply to the social provisions in the proposal for 
the "fifth directive" and the "Vredeling proposal". 
Given that the European Community already has a legal framework for employee 
information and consultation at transnational level, this global approach would 
mean quite simply that a Community instrument on information and consultation 
at national level would have to be adopted. Before taking this approach, a number 
of questions need to be answered: Would it be in keeping with the principles of 
subsidiarity and proportionality? What would be the nature of the proposal 
(approximation of legislation or establishment of minimum requirements)? and, 
lastly, Which legal basis should be used (Treaty or Maastricht Social Agreement)? 
The main advantage of this option is that it is a step towards simplifying 
Community law and European social policy. It could also make it easier - and, in 
fact, might even be necessary - to achieve progress with the six above-mentioned 
proposals, since the businesses concerned which are of purely national scale would 
then be covered by this general framework. 
Option 3: immediate action on the proposals concerning the statute for a European 
company, a European association; a European cooperative society and a European 
mutual society 
If the global approach set out above is adopted, immediate steps could be taken 
to unblock these proposals, especially the proposal on the statute for a European 
company, the adoption of which is particularly urgent. This would be justified by 
the importance of this instrument for the organisation of companies at European 
level and by the urgent need to find a legal vehicle which meets the needs of 
major trans-European transport infrastructure projects (the Member States have 
indicated that they will need two years to introduce the implementing provisions 
for the Statute, in spite of its immediate legal effect). 
This could be done in two ways: 
a) The above-mentioned proposals for directives would be withdrawn on the 
same condition, mutatis mutandis, as that set out in Article 136 of the 
proposal for a regulation on the statute for a European company, which 
stipulates that no European company, European association, European 
cooperative society or European mutual society could be set up in a 
Member State which had not transposed the "European Works Councils" 
Directive. 
This solution would have the advantage of maintaining the compulsory 
link between the establishment of these organisations and their application 
of the procedures for employee information and consultation, which has 
10 
always been a key element in these proposals. It would also prevent 
discrimination between these organisations depending on the Member State 
in which they decided to locate their registered office. 
b) No conditions would be attached to the withdrawal of these proposals. In 
this case, only the Community provisions in force (the "European Works 
Councils", "collective redundancies" and "business transfers" Directives) 
would be applicable to the organisations concerned, as appropriate. 
The disadvantage of this sub-option is that one Member State is not 
covered by the "European Works Councils" Directive. This would mean 
that the European companies, European associations, European cooperative 
societies and European mutual societies which are of multinational scale 
and have their registered offices in this Member State would not be subject 
to the same obligations in the area of transnational information and 
consultation of employees, as would be the case for organisations with 
their registered office in another Member State. 
V. CONCLUSION 
14 The arguments set out above are provided as a contribution to the discussion 
which the Commission would like to see developed among the Member States, in 
the European Parliament and the Economic and Social Committee and between 
the social partners at Community level. The Commission reaffirms that it is open 
to any way of achieving the objectives at the heart of this debate. These are, first, 
to put an end to the unacceptable situation of never-ending institutional discussion 
of the six above-mentioned proposals and, second, to supplement the Community 
legal framework in the area of employee information and consultation and to make 
it more coherent and effective. 
The Commission would like to receive the comments and views of the Member 
States, the European Parliament, the Economic and Social Committee and the 
social partners at European level on these matters. It is particularly interested in 
knowing their views on the options set out in point 13 of this communication. 
11 
ANNEX 
I. Council Directive 75/129/EEC of 17 February 1975 on the approximation of the laws 
of the Member States relating to collective redundancies. 
Council Directive 92/56/EEC of 24 June 1992 amending Directive 75/129/EEC on the 
approximation of the laws of the Member States relating to collective redundancies. 
Objective 
To approximate the legislation on collective redundancy arrangements and procedures in 
the Member States, and to increase the protection of employees in the event of collective 
redundancy. 
Content 
1 Definition of the terms "collective redundancies" and "workers' representatives" 
2 The Directive does not apply to: 
- collective redundancies effected under contracts of employment concluded 
for a limited period of time or for a specific task except where such 
redundancies take place prior to the date of expiry or the completion of 
such contracts; 
- workers employed by public administrative bodies or by establishments 
governed by public law; 
- the crews of seagoing vessels. 
3 Employers contemplating collective redundancies must begin consultations with 
the workers' representatives with a view to reaching an agreement. These 
consultations must, as a minimum, cover ways and means of avoiding collective 
redundancies or reducing the number of workers affected and mitigating the 
consequences, particularly by recourse to accompanying social measures aimed at 
redeploying or retraining workers made redundant. 
4 Under Directive 92/56/EEC, Member States may provide that the workers' 
representatives may call upon the services of experts in accordance with national 
legislation and/or practice. In the course of such consultations, employers must 
supply workers' representatives with all relevant information and, in any event, 
notify them in writing of: 
- the reasons for the projected redundancies, 
the period over which they are to be effected, 
the number and categories of workers normally employed, 
the number to be made redundant, 
the criteria on which these workers have been selected, 
- the method for calculating any redundancy payments. 
5 Collective redundancy procedure: 
^2 
mm 
- the employer is obliged to notify the competent authority in writing of any 
planned redundancies. The notification must include all relevant 
information on the projected redundancies and consultations, except the 
method for calculating redundancy payments. However, in the event of 
termination of activities as a result of a judicial decision, notification is 
obligatory only if expressly requested by the competent authority; 
employers must forward a copy of the notification to the workers' 
representatives, who may send any comments they may have to the 
competent public authority; 
- collective redundancies take effect not earlier than thirty days after 
notification, the intervening period being used by the public authorities to 
seek solutions. Member States may grant the public authority the power 
to reduce the period or extend it to up to sixty days following notification, 
where the problems raised are not likely to be solved within the initial 
period. 
This article is not obligatory in the event of collective redundancies 
resulting from termination of activities as a result of a judicial decision. 
Wider powers to extend the period may be granted. The employer must be 
informed of the extension and the grounds for it before expiry of the initial 
period. 
Member States have the right to apply or introduce laws, regulations or 
administrative provisions which are more favourable to workers. 
References 
Official Journal L 48, 22.2.1975 
Official Journal L 245, 26.8.1992 
//3 
IL Council Directive 77/187/EEC of 14 February 1977 on the approximation of the laws 
of the Member States relating to the safeguarding of employees' rights in the event 
of transfers of undertakings, businesses or parts of businesses 
Objective 
Since economic trends are bringing in their wake, at both national and Community level, 
changes in the structure of undertakings, there is a need to protect workers in the event 
of a change of employer and, more especially, to ensure that their rights are safeguarded. 
Content 
The Directive concerns transfers of undertakings, businesses or parts of businesses 
as a result of legal transfers or mergers, where the business concerned is situated 
within the territorial scope of the EEC Treaty. The Directive does not apply to 
seagoing vessels. 
The transferer and the transferee must inform the representatives of their 
respective employees in good time of the reasons for the transfer, the legal, 
economic and social implications, and the measures envisaged in relation to the 
employees. For the workers to be transferred, this information must be given 
before the transfer is carried out, and all employees must be informed before their 
employment and working conditions are directly affected. 
If the transferer or the transferee envisages measures in relation to his employees, 
he must consult their representatives in good time on such measures with a view 
to seeking agreement. Member States whose laws, regulations or administrative 
provisions provide for recourse to an arbitration board may limit the obligations 
in respect of information and consultation where the transfer is likely to entail 
serious disadvantages for a considerable number of the employees. Member States 
may provide that, where there are no employees' representatives, the employees 
themselves must be informed in advance when a transfer is about to take place. 
References 
Official Journal L 61, 5.3.1977 
AA 
EQ. Council Directive 94/45/EC 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 
Objective 
To improve employees' right to information and consultation in Community-scale 
undertakings and groups of undertakings. 
Content 
Scope: the Directive applies to Community-scale undertakings and groups of 
undertakings with at least 1 000 employees and at least two establishments or 
undertakings employing at least 150 people in two or more Member States. 
The Directive does not cover small businesses and does not affect the provision 
made for information and consultation in the legislation and practices of individual 
Member States. 
Community-scale undertakings and groups of undertakings where the central 
management is not situated in a Member State are covered by the Directive. In 
this case, responsibility is invested in the central management's representative 
agent in a Member State or the undertaking employing the greatest number of 
employees in any one Member State. 
By "Member States" are meant the 11 Member States signatory to the Agreement 
on Social Policy. 
The establishment of a European Works Council must be at the instigation either 
of the central management of the undertaking or group of undertakings, or of the 
employees or their representatives. 
The nature, functions, competence and operating procedures of such a Works 
Council are freely defined by agreement between the two parties. Provision is 
made for derogation from the requirement to establish a Works Council, in which 
case the alternative procedure instituted need not comply with the provisions set 
out in the Annex either. 
In the event of no agreement being reached, the Directive stipulates that certain 
subsidiary requirements set out in the Annex to the Directive must be applied. 
These concern the nature and content of the information and consultation and the 
composition and operating arrangements of the European Works Council. 
The European Works Council has the right to meet with central management at 
least once a year to be informed and consulted on the company's progress and 
V5 
prospects. The information is expected to cover the company structure, its 
economic and financial situation, probable development of the business, 
production and sales, the employment situation and its probable development, 
investment projects, changes concerning organisation, transfers of production, 
cutbacks or closures of undertakings or collective redundancies. Where there are 
exceptional circumstances affecting employment, the select committee, or where 
no such committee exists, the European Works Council has the right to demand 
a meeting with the central management to be informed and consulted on any 
measures likely to affect employees' interests. European Works Councils must 
have a minimum of three members and a maximum of thirty. Their operating 
costs are to be borne by the central management. 
The Directive contains provisions on confidentiality and secrecy of information. 
It also provides that employees' representatives must, in the exercise of their 
functions, enjoy the same protection and guarantees provided for employees' 
representatives by the national legislation and/or practice in force in their country 
of employment. 
References 
Official Journal L 254, 30.9.1994, p. 64 
-*) 
IV. Proposal for a Council Directive on procedures for informing and consulting the 
employees" of undertakings with complex structures, in particular transnational 
undertakings 
Objective 
: To improve information and consultation of employees in undertakings with complex 
structures. 
Content 
1: The Directive applies to undertakings and groups of undertakings with over 1 000 
employees within the Community. 
2. The proposal provides for an obligation on parent undertakings (irrespective of 
whether their decision-making centre is within the EC) to inform and consult the 
employees of its subsidiaries within the EC and the employees of its component 
establishments. Where the decision-making centre is located outside the EC, it 
may be represented for this purpose by an agent or, in the absence of such, the 
management of the subsidiary concerned is responsible for the information and 
consultation obligations. Where the centre is located within the EC, the parent 
undertaking and subsidiary are jointly responsible. 
At least once a year, or whenever the information in question is brought up to 
date (and communicated to shareholders and creditors in implementation of the 
relevant legislation) the management of the parent undertaking must communicate 
it to the management of its subsidiaries to enable it to be passed on to the 
employees' representatives. The information concerned covers the activities of the 
whole group and the specific situation of the production sector or the geographical 
area in which the subsidiary is active. In particular, it should cover structure, the 
economic and financial situation, the probable development of the business and 
of production and sales, the employment situation and probable trends, and 
investment prospects. 
This information must be communicated without delay by the management of 
each subsidiary to the employees' representatives, who may ask the management 
for an oral explanation of the information communicated. 
3. If the management of the subsidiary fails to communicate the information within 
a month, the employees' representatives are entitled to approach the management 
of the parent undertaking, which must forward the relevant information without 
delay to the management of the subsidiary, for communication to the employees' 
representatives. 
Where the management of a parent undertaking proposes taking a decision likely 
to affect the interests of employees of the subsidiaries in the EC, it must forward 
the information to the management of each subsidiary concerned in good time, 
who must pass it on in writing to the representatives of the employees concerned, 
again in good time. In addition, the local management is obliged to consult the 
*1 
employees' representatives on the measures envisaged (within 30 days), and 
discuss them with a view to reaching an agreement concerning the workers 
affected, and provide oral explanations on request. 
If the management fails to comply with these obligations, the employees' 
representatives have the right to appeal to a tribunal or other competent authority 
for measures to be taken within a maximum period of 30 days to compel the 
management to do so. 
4. The management may not implement the decisions envisaged before the opinion 
of the employees' representatives has been received, or failing this, within 30 days 
from the date on which the information concerned is forwarded. 
5. If the legislation of a Member State provides for an employees' representative 
body at a higher level than that of the subsidiary, the information referred to must 
also be given to that body, which must also be consulted if the representatives of 
the employees of the subsidiary in question agree to transfer their right to be 
consulted to the higher level. 
6. By means of an agreement between the management of the parent company and 
all the employees of its subsidiaries within the EC, a representative structure at 
group level may be set up. 
References 
Commission proposal Official Journal C 297, 15.11.80, p. 3 
Amended proposal: Official Journal C 217, 12.12.83, p. 3 
Opinion of the European Parliament: Official Journal C 13, 17.1.83 
Opinion of the ESC: Official Journal C 77, 29.3.82 
18 
mmmmmmmmmm 
V. Proposal for a Council Regulation on the statute for a European company. 
Proposal for a Council Directive complementing the statute for a European company 
with regard to the involvement of employees in the European company 
Objective 
To create a European company with its own legal framework to enable companies based 
in different Member States to merge or form a holding company or a joint subsidiary, 
avoiding the legal and practical constraints created by the existence of twelve different 
legal systems. To organise the involvement of employees in the European company, and 
recognise their place and role in the company. 
Content 
Proposal for a Council Regulation on the statute for a European company 
1 Provision is made for four ways of forming a European company: by merging, 
forming a holding company or joint subsidiary, or conversion of a limited 
company formed under the law of a Member State. Mergers are restricted to 
public limited companies in different Member States. Formation of a European 
holding company is open to public and private limited companies with a presence 
within the Community, either by having their central administrations in different 
Member States or a subsidiary company or branch office in a Member State other 
than that of the central administration. Formation of a European company (SE) 
in the form of a joint subsidiary is a open to any body governed by public or 
private law conforming to the same criteria. 
2 The registered office of an SE must be situated at the place specified in its 
statutes, i.e. the place where it has its central administration. It may be transferred 
within the Community in accordance with the defined procedures. 
3 The statutes of the SE provide for the company to have as its governing bodies 
the general meeting of shareholders and either a management board and a 
supervisory board (two-tier system) or an administrative board (one-tier system). 
In the case of the two tier system, the management board is responsible for the 
management of the SE. The member or members of the management board are 
empowered to represent the company in dealings with third parties and in legal 
proceedings. They are appointed and removed by the supervisory board. No 
person may at the same time be a member of the management board and the 
supervisory board of the same SE. However, the supervisory board may nominate 
one of its members to exercise the function of a member of the management 
board in the event of a vacancy. During such period the function of the person 
concerned as a member of the supervisory board is suspended. 
In the case of the one-tier system, the administrative board is responsible for the 
management of the SE. The member or members of the administrative board are 
V9 
empowered to represent the company in dealings with third parties and in legal 
proceedings. 
Proposal for a Council Directive complementing the statute for a European company with 
regard to the involvement of employees in the European company 
1 Definition of the concept of employee involvement, which does not mean day-to­
day involvement in matters within the jurisdiction of the management, but 
participation in the supervision and strategic development of the SE. 
2 The proposal sets out various models of participation, inclusion of employees' 
representatives on the supervisory or administrative board, a separate body 
representing employees of the SE, or other models to be established by means of 
an agreement concluded between the management or administrative boards of the 
founder companies and the company employees, complying with the information 
and consultation requirements provided for in the model for a separate 
representative body. An SE may not be formed unless one of the models referred 
to in the Directive has been chosen. 
3 Employees' representatives must be provided with the premises, material and 
financial resources and other facilities enabling them to perform their duties in an 
appropriate manner. 
Opinion of the European Parliament 
First reading: the Parliament approved the Commission proposal with certain 
amendments, most of which were accepted by the Commission. 
Current situation 
The amended proposals are currently before the Council pending a common position. 
References 
Commission proposals 
COM(89) 268/1 and II final Official Journal C 263, 16.10.1989 
Amended proposals 
COM(91) 174/1 and II final Official Journal C 176, 8.7.1991 
Opinion of the European Parliament 
First reading Official Journal C 48, 25.2.1991 
Opinion of the Economic and Social Committee 
Official Journal C 124, 21.5.1990 
X0 
mEmmmmmmmmmmm 
VI. Proposal for a Council Regulation on the statute for a European association 
Proposal for a Council directive supplementing the statute for a European 
association with regard to the involvement of employees 
Objective 
To introduce a European statute enabling all associations and foundations to operate 
throughout Community territory by providing European associations with appropriate 
legal instruments. To organise the involvement of workers in the European association 
(EA), to enable their place and role within the company to be recognised. 
Content 
Proposal for a Council Regulation on the statute for a European association 
1 The European association (EA) is a structure whose members pool their 
knowledge or activities either in the general interest or to promote, directly or 
indirectly, the trade or professional interests of its members. 
2 The EA acquires legal personality from the day of its registration in the Member 
State in which it has its registered office. 
3 The statute provides for an EA to be formed directly, either by two or more legal 
entities formed under the law of a Member State and having their registered office 
and central administration in at least two Member States, or by a minimum of 21 
natural persons who are nationals of at least two Member States of the 
Community and resident in at least two Member States. 
4 An EA can also be formed by conversion, provided that the national association 
has an establishment in a Member State other than that of its central 
administration. An EA formed in this way must demonstrate that it is carrying on 
genuine and effective cross-border activities. 
5 The registered office of an EA must be situated at the place specified in its 
statutes, which must be within the Community, at the same place as the EA's 
central administration. 
6 The EA statutes provide for administrative bodies in the form of a general 
meeting and an executive committee. 
7 The EA must draw up estimates for the forthcoming financial year. 
8 An EA may be wound up by a decision of the general meeting, in particular 
where the period fixed in the statutes has expired, or where the disclosure of 
accounts has not taken place in the EA's last three financial years, or by judicial 
41 
decision, particularly where the EA has transferred its registered office outside the 
Community. 
9 EA's undergoing liquidation, insolvency proceedings or suspension of payments 
are subject to the law of the Member State in which they have their registered 
office. 
Proposal for a Council Directive supplementing the statute for a European association 
with regard to the involvement of employees 
1. The registration of the EA is dependent on the choice of participation model 
and/or information and consultation system. 
2. Under the Directive, the laws, regulations and administrative provisions of the 
Member State governing the participation of employees in the supervisory or 
administrative boards of national companies remain applicable. However, if the 
Member State concerned has no specific provisions on employee involvement, or 
such provisions are not applicable to the EA, it must ensure at least that the 
employees of the EA are informed and consulted in accordance with the minimum 
requirements set out in the subsequent articles. 
3. The Directive sets out the procedure for the adoption of information and 
consultation arrangements in EAs with at least 50 employees. 
4. Where the EA is formed solely by natural persons, the procedure selected must 
be submitted to the general meeting called to approve the formation of the EA. 
5. The executive committee of the EA must inform and consult in good time the 
employees of that entity in specified minimum areas. These include any proposals 
which might significantly affect employees' interests or any question concerning 
conditions of employment. 
6. The Directive sets out certain basic principles concerning election procedures and 
the mandates of representatives. According to these, employees' representatives 
in the EA must be elected and represent the employees (including those working 
part time) of all the establishments, plants or installations belonging to the EA. 
Opinion of the European Parliament 
First reading: on 20 January 1993, the Parliament approved the Commission proposals 
with certain amendments, some of which were accepted by the Commission. 
( wrent situation 
The amended proposals are currently before the Council pending a common position. 
42 
References 
Commission proposals 
COM(91)273/I and II final Official Journal C 99, 21.4.1992 
Amended proposals 
COM(93)252 final Official Journal C 236, 31.8.1993 
Opinion of the European Parliament 
First reading Official Journal C 42, 15.2.1993 
Opinion of the Economic and Social Committee 
Official Journal C 223, 31.8.1992. 
<13 
VII. Proposal for a Council Regulation on the statute for a European cooperative society 
Proposal for a Council Directive supplementing the statute for a European 
cooperative society with regard to the involvement of employees 
Objective 
To facilitate the development of cross-border activities of cooperatives, while taking 
account of their specific features, by providing them with appropriate legal instruments. 
To organise the involvement of employees in the European cooperative society (SCE) to 
enable their position and role within the company to be recognised. 
Content 
Proposal for a Council Regulation on the statute for a European cooperative society 
1 The cooperative is defined as a corporate body governed by private law having 
legal personality. The capital is formed from members' own contributions in the 
form of shares, on which revenue is based. The cooperative acquires legal 
personality on the date of its registration in the Member State in which it has its 
registered office. 
2 The registered office of an SCE must be situated within the Community within 
the Member State in which it has its central administration. 
3 The regulation provides for an SCE to be formed by at least two legal entities 
formed under the law of a Member State, having their registered office and central 
administration in at least two different Member States. 
4 A parent cooperative may also convert into SCE form together with one of its 
subsidiaries or establishments in a Member State other than that of its central 
administration if it can demonstrate that it is carrying on genuine and effective 
cross-border activities. 
5 The minimum capital of an SCE must be at least ECU 100 000 or the equivalent 
in national currency. 
6 The SCE's statutes provide for a general meeting plus either a management board 
and supervisory board (two-tier system) or an administrative board (one-tier 
system). 
Proposal for a Council Directive supplementing the statute for a European cooperative 
society with regard to the involvement of employees 
1 The Directive coordinates the laws, regulations and administrative provisions of 
the Member States concerning the involvement of employees in the SCE. 
14 
2 Registration of the SCE depends on the choice of participation model and/or 
information and consultation system. 
3 Under the Directive, the national provisions governing the participation of 
employees in the supervisory or administrative boards of national cooperative 
societies are applicable. However, if the Member State in which the registered 
office is situated has no rules on the participation of employees or if such 
provisions are not applicable to the SCE, it must ensure at least that the 
employees of the SCE are informed and consulted in accordance with the 
subsequent articles. 
4 Where the majority of the employees of the SCE are also members thereof, the 
above procedure and the information and consultation system envisaged are not 
applicable, as the employees already participate in decision-making in their 
capacity as members. 
5 The Directive sets out the adoption procedure for an information and consultation 
system for SCEs with at least 50 employees. 
6 The management and/or administrative board of the SCE must inform and consult 
in good time the employees of that entity in the areas determined by them, which 
must include, as a minimum, any proposals which might significantly affect the 
interests of the employees or any question concerning conditions of employment. 
7 The Directive sets out certain basic principles concerning election procedures and 
the mandates of representatives. According to these, the employees' representatives 
in the SCE must be elected and represent the employees (including those working 
part time) of all the establishments, plants or installations belonging to the SCE. 
Opinion of the European Parliament 
First reading, on 20 January 1993, the Parliament approved the Commission proposals 
with certain amendments, some of which were accepted by the Commission 
( Current situation 
Ihe amended proposals are currently before the Council pending a common position. 
References 
Commission proposals 
COM(91) 273/III and IV final Official Journal C 99, 21.4.1992 
Amended proposals 
COM(93) 252 final Official Journal C 236, 31.8.1993 
Opinion of the European Parliament 
First reading Official Journal C 42, 15.2.1993 
Opinion of the Economic and Social 
15 
Committee Official Journal C 223, 31.8.1992 
«16 
VIII. Proposal for a Council Regulation on the statute for a European mutual society 
Proposal for a Council Directive supplementing the statute for a European mutual 
society with regard to the involvement of employees 
Objective 
To assist mutual societies in developing cross-border activities by providing them with 
appropriate legal instruments while taking account of their specific nature, particularly 
their activities of general benefit. To organise the involvement of employees in European 
mutual associations (ME) to enable their place and role in the undertaking to be 
recognised. 
Content 
Proposal for a Council Regulation on the statute for a European mutual society 
1 The European mutual society (ME) is defined as a group of persons guaranteeing 
its members, in return for a subscription, full settlement of contractual 
undertakings entered into in the course of the activities authorised by its statutes, 
which include providence activities, insurance, health cover and loans. The ME 
acquires legal personality on the day of its registration in the Member State in 
which it has its registered office. 
2 The Regulation does not affect basic statutory social security schemes which in 
certain Member States are managed by mutual societies, or the liberty of Member 
States to decide whether or not and under what conditions to entrust the 
management of these schemes to mutual societies. 
3 The Regulation provides for the formation of an ME by national legal entities. 
The founding members must ensure that the ME is transnational in character when 
it is formed, by seeing that the following conditions are met: a mutual society or 
an equivalent legal entity must be formed under the law of a Member State and 
have its registered office and central administration in different Member States. 
4 The Regulation also provides for conversion into an ME (provided that this does 
not result in the society being wound up or in the creation of a new legal person) 
where the ME has an establishment or subsidiary in a Member State other than 
that in which it has its central administration, and can demonstrate that it is 
carrying on genuine and effective cross-border activities. 
5 The statutes of the ME provide for a general meeting and either a management 
board and a supervisory board (two-tier system) or an administrative board (one-
tier system). 
Proposal for a Council Directive supplementing the statute for a European mutual society 
with regard to the involvement of employees 
\1 
1 The choice of a participation model and/or information and consultation system 
is a prerequisite for the registration of an ME. 
2 Under the Directive, the national provisions governing the participation of 
employees in the supervisory or administrative boards of national mutual societies 
remain applicable. However, if the Member State in which the ME has its 
registered office has no specific rules on employee participation or such provisions 
are not applicable to MEs, it must ensure at least that the employees of the ME 
are informed and consulted in accordance with the subsequent articles, where the 
ME has at least 50 employees. 
3 The management and/or administrative board of the ME must inform and consult 
in good time the employees of that entity and determine the areas for obligatory 
information and consultation, which must include, particularly, any proposals 
which might significantly affect the interests of the employees and any question 
concerning conditions of employment. 
4 The Directive sets out certain basic principles concerning election procedures and 
the mandates of representatives. In accordance with these, employees' 
representatives in an ME must be elected and represent the employees (including 
those working part time) of all the establishments, plants or installations belonging 
to the ME. 
Opinion of the European Parliament 
First reading: on 6 July 1993, the Parliament approved the Commission proposals with 
certain amendments, some of which were accepted by the Commission. 
Current situation 
On 6 July 1993, the Commission submitted amended proposals. 
The amended proposals are currently before the Council pending a common position. 
References 
Commission proposals 
COM(91) 273/V and VI final Official Journal C 99, 21.4.1992 
Amended proposals 
COM(93) 252 final Official Journal C 236, 31.8.1993 
Opinion of the European Parliament 
First reading Official Journal C 42, 15.2.1993 
Opinion of the Economic and Social 
Committee Official Journal C 223, 31.8.1992 
m 
DC. Proposal for a fifth Council Directive to coordinate the safeguards, which, for the 
protection of the interests of members and others are required by Member States 
of companies within the meaning of the second paragraph of Article 58 of the EEC 
Treaty concerning the structure of public limited companies and the powers and 
obligations of their organs 
Objective 
To coordinate the legislation of Member States on the structure of public limited 
companies and the powers and obligations of their organs. 
Content 
The Directive applies to such companies as: 
- in the United Kingdom: the "public limited company"; 
- in France: the "société anonyme"; 
- in Germany: the "Aktiengesellschaft", 
and their equivalent in the other Member States. The Member States are 
empowered to exclude cooperatives. 
The Member States must provide that such companies be organised according to 
a two-tier system (a management organ and supervisory organ) or a one-tier 
system (an administrative organ in which the executive members are supervised 
by the non-executive members). 
The authorisation of the supervisory organ or non-executive members must be 
obtained for any decision by the management organ or executive members relating 
to: 
the closure or transfer of part or all of the undertaking; 
- substantial curtailment or extension of the activities of the undertaking; 
- substantial organisational changes; 
establishment or termination of long-term cooperation with other 
undertakings. 
In companies employing less than 1 000 persons, the members of the advisory 
board are appointed by the general meeting. In those employing over 1 000 
persons, Members States must provide for participation of employees in the 
appointment of: 
the members of the supervisory organs in the two-tier system; 
the non-executive members of the board in the one-tier system 
A maximum of two-thirds of the members of the Advisory Board or the non­
executive members are appointed by the general meeting, and a minimum of one 
third and a maximum of one half are appointed by the staff. The members of the 
supervisory organ may be coopted by the supervisory organ itself. However, the 
general meeting of shareholders or the staff representatives are empowered to 
oppose the appointment for certain specified reasons. 
09 
Member States may also provide for employee participation through a body 
representing the employees or through a collectively agreed system. Members of 
the management organ may not at the same time be members of the supervisory 
organ. In order to ensure a high degree of participation in company life, it is 
necessary to: 
strengthen the position of shareholders in respect of the exercise of their 
right to vote; voting rights must be proportional to participation in the 
capital; 
restrict the issue of shares which cany special pecuniary advantages with 
no voting rights. 
5. An annual general meeting must be organised. Other general meetings may 
be convened by the management organ, the executive members of the 
administrative organ or by the shareholders, provided the latter's shares 
represent a certain minimum capital. The annual accounts, the annual 
report and the report by the persons responsible for auditing the accounts 
must be made available to all shareholders. An absolute majority is 
required for all decisions taken by the general meeting, except in certain 
special circumstances. Minutes must be drawn up for every annual general 
meeting. The memorandum or articles of association may not confer on the 
holders of a particular category of shares an exclusive right to put forward 
nominations for a majority of those members of the supervisory organ 
whose appointment is a matter for the general meeting. 
6. The annual accounts must meet various requirements. For example, 5% of 
any profits for the financial year must be appropriated to a legal reserve 
until that reserve reaches a certain minimum amount. The auditors of the 
accounts must be entirely independent of the company and be appointed 
by the general meeting. The auditors must prepare a detailed report on the 
results of their work. 
7. The memorandum or articles of association may not confer on the holders 
of a particular category of shares an exclusive right to put forward 
nominations for a majority of those members of the administrative organ 
whose appointment is a matter for the general meeting. 
8 The Commission must submit a report on the application of the Directive 
to the Council and Parliament within a specified period 
9. Certain derogations from the Directive are authorised, such as companies 
whose whole or principal object is political, religious, charitable or 
educational. 
Opinion of the European Parliament 
First reading: the Parliament approved the initial proposal with many amendments. 
It proposed adding the option of a one-tier system to the two-tier system proposed, 
<2>0 
mmmmmmmmmm 
raising the minimum number of employees for obligatory staff participation from 
500 to 1 000, and extending the options for the form that participation should 
take. 
The Commission submitted this proposal on 9 October 1972. 
Current situation 
The Commission submitted an initial amended proposal on 19 August 1983, a 
second amended proposal on 13 December 1990 and a third on 20 November 
1991. 
The third amended proposal is currently before the Council pending a common 
position. 
References 
Commission proposal 
COM(72) 887 final 
Amended proposal 
COM(83) 185 final 
Amended proposal 
COM(90) 629 final 
Amended proposal 
COM(91) 372 final 
Opinion of the European Parliament 
First reading 
Opinion of the Economic and 
Social Committee Official Journal C 131, 13.12.1972 
Official Journal C 240, 9.9.1983 
Official Journal C7, 11.1.1991 
Official Journal C 321, 12.12.1991 
Official Journal C 149, 14.6.1991 
Official Journal C 240, 16.9.1991 
Official Journal C 109, 19.9.1974 
Official Journal C 269, 14.10.1991 

ISSN 0254-1475 
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