Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees
Date: 2003-07-22
Institutions: Council of the European Union
Subjects: European cooperative, legal status, worker participation

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COUNCIL DIRECTIVE 2003/72/EC

of 22 July 2003

supplementing the Statute for a European Cooperative Society with regard to the involvement
of employees

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 308 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Parliament (2),

Having regard to the opinion of the European Economic and
Social Committee (3),

Whereas:

(1)

(2)

(3)

(4)

In order to attain the objectives of the Treaty, Council
Regulation (EC) No 1435/2003 (4) establishes a Statute
for a European Cooperative Society (SCE).

That Regulation aims at creating a uniform legal frame-
work within which cooperatives and other entities and
natural persons from different Member States should be
able to plan and carry out the reorganisation of their
business in cooperative form on a Community scale.

In order to promote the social objectives of the Com-
munity, special provisions have to be set, notably in the
field of employee involvement, aimed at ensuring that
the establishment of an SCE does not entail the disap-
pearance or reduction of practices of employee involve-
ment existing within the entities participating in the
establishment of an SCE. This objective should be
pursued through the establishment of a set of rules in
this field, supplementing the provisions of Regulation
(EC) No 1435/2003.

Since the objectives of the proposed action, as outlined
above, cannot be sufficiently achieved by the Member
States, in that the object is to establish a set of rules on
employee-involvement applicable to the SCE, and can
therefore, by reason of the scale and impact of the
proposed action, be better achieved at Community level,
the Community may adopt measures,
in accordance
with the principle of subsidiarity as set out in Article 5
In accordance with the principle of
of

the Treaty.

( 1) OJ C 236, 31.8.1993, p. 36.
( 2) OJ C 42, 15.2.1993, p. 75.
( 3) OJ C 223, 31.8.1992, p. 42.
( 4) See page 1 of this Official Journal.

(5)

(6)

(7)

(8)

proportionality, as set out in that Article, this Directive
does not go beyond what is necessary to achieve these
objectives.

The great diversity of rules and practices existing in
the Member States as regards the manner in which
employees’ representatives are involved in decision-
making within cooperatives makes it inadvisable to set
up a single European model of employee involvement
applicable to the SCE.

Information and consultation procedures at transna-
tional level should be ensured in all cases of creation of
an SCE, with the necessary adaptation for SCEs formed
ex novo where this is justified by their size, as measured
in terms of employment.

If participation rights exist within one or more entities
establishing an SCE, they should in principle be pre-
served through their transfer to the SCE, once estab-
lished, unless the parties decide otherwise.

The concrete procedures of employee transnational
information and consultation, as well as, if applicable,
participation, to apply to each SCE should be defined
primarily by means of an agreement between the parties
concerned or,
through the
in the absence thereof,
application of a set of subsidiary rules.

(9) Member States should still have the option of not
applying the standard rules relating to participation in
the case of a merger, given the diversity of national
systems for employee involvement. Existing systems and
practices of participation where appropriate at the level
of participating entities must in that case be maintained
by adapting registration rules.

(10) The voting rules within the special body representing
the employees for negotiation purposes, in particular
when concluding agreements providing for a level of
participation lower than the one existing within one or
more of the participating entities, should be proportion-
ate to the risk of disappearance or reduction of existing
systems and practices of participation. That risk is
greater in the case of an SCE established by way of
transformation or merger than by way of creating an ex
novo SCE.

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(11)

In the absence of an agreement subsequent to the
negotiation between employees’ representatives and the
competent organs of the participating entities, provision
should be made for certain standard rules to apply to
the SCE, once it is established. These standard rules
should ensure effective practices of transnational infor-
mation and consultation of employees, as well as their
participation in the relevant organs of the SCE if such
participation existed before its establishment within the
participating entities.

(17) Where an SCE and its subsidiaries and establishments are
subject to Council Directive 94/45/EC of 22 September
1994 on the establishment of a European Works Council
or a procedure in Community-scale undertakings and
Community-scale groups of undertakings for the pur-
poses of informing and consulting employees (1), the
provisions of that Directive and the provisions transpos-
ing it into national legislation should not apply to it nor
to its subsidiaries and establishments, unless the special
negotiating body decides not to open negotiations or to
terminate negotiations already opened.

the SCE should be subject

(12) When application of the abovementioned procedures to
the entities participating in the ex novo SCE cannot be
justified because of their small size as measured in terms
of employment,
to the
national rules on the involvement of employees in force
in the Member State where it establishes its registered
office, or in the Member States where it has subsidiaries
or establishments. This should be without prejudice to
the obligation placed on an SCE already established to
implement these procedures if a significant number of
employees so requests.

(13)

Specific provisions should apply to employee partici-
pation in general meetings, in so far as national laws so
allow. The application of these provisions does not
preclude the application of other forms of participation,
as provided for in this Directive.

(18) This Directive should not affect other existing rights
regarding involvement and need not affect other existing
representation structures, provided for by Community
and national laws and practices.

(19) Member States should take appropriate measures in the
event of failure to comply with the obligations laid
down in this Directive.

(20) The Treaty has not provided the necessary powers for
the Community to adopt this Directive, other than those
provided for in Article 308.

(14) Member States should ensure through appropriate pro-
visions that, in the case of structural changes following
the arrangements for the
the creation of an SCE,
involvement of employees can, where appropriate, be
renegotiated.

(21)

(15)

Provision should be made for the employees’ representa-
tives acting within the framework of this Directive
to enjoy, when exercising their functions, the same
those provided for
protection and guarantees as
employees’ representatives by the legislation and/or
practice of the country of employment. They should not
be subject to any discrimination, including harassment,
as a result of the lawful exercise of their activities and
should enjoy adequate protection as regards dismissal
and other sanctions.

(16) The confidentiality of sensitive information should be
preserved even after the expiry of the terms of office of
the employees’ representatives, and provision should be
made to allow the competent organ of the SCE to
withhold information which would seriously harm, if
subject to public disclosure, the functioning of the SCE.

It is a fundamental principle and stated aim of this
Directive to secure employees’ acquired rights as regards
involvement in company decisions. Employee rights in
force before the establishment of SCEs should provide
the basis for employee rights of involvement in the SCE
(the ‘before and after’ principle). Consequently, that
approach should apply not only to the initial establish-
ment of an SCE but also to structural changes in an
existing SCE and to the entities affected by structural
change processes. Therefore, where the registered office
of an SCE is transferred from one Member State to
another, at least the same level of employee involvement
rights should continue to apply. Further, if the threshold
concerning employee involvement is reached or exceed-
ed after the registration of an SCE, these rights should
apply in the same manner in which they would have
applied, had the threshold been reached or exceeded
before registration.

(1) OJ L 254, 30.9.1994, p. 64. Directive as amended by Directive

97/74/EC (OJ L 10, 16.1.1998, p. 22).

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(22) Member States may provide that representatives of trade
unions may be members of a special negotiating body
regardless of whether they are employees of an entity
participating in the establishment of an SCE. Member
States should in this context in particular be able
to introduce this right in cases where trade union
representatives have the right to be members of, and to
vote in, supervisory or administrative company organs
in accordance with national legislation.

(23)

In several Member States, employee involvement and
other areas of industrial relations are based on both
national legislation and practice which in this context is
understood also to cover collective agreements at various
national, sectorial and/or company levels,

HAS ADOPTED THIS DIRECTIVE:

SECTION I

GENERAL

Article 1

Objective

1.
This Directive governs the involvement of employees in
the affairs of European Cooperative Societies (hereinafter
referred to as SCEs), as
referred to in Regulation (EC)
No 1435/2003.

2.
To this end, arrangements for the involvement of
employees shall be established in every SCE in accordance
with the negotiating procedure referred to in Articles 3 to 6
or, under the circumstances specified in Articles 7 and 8, in
accordance with the Annex.

Article 2

Definitions

For the purposes of this Directive:

(a)

(b)

(c)

‘SCE’ means any cooperative society established in accord-
ance with Regulation (EC) No 1435/2003;

‘participating legal entities’ means companies and firms
within the meaning of the second paragraph of Article 48
of the Treaty, including cooperatives, as well as legal
bodies formed under, and governed by, the law of a
Member State, directly participating in the establishing of
an SCE;

‘subsidiary’ of a participating legal entity or of an SCE
means an undertaking over which that legal entity or SCE
exercises a dominant influence defined in accordance
with Article 3(2) to (7) of Directive 94/45/EC;

(d)

(e)

(f)

(g)

(h)

(i)

(j)

‘concerned subsidiary or establishment’ means a subsidi-
ary or establishment of a participating legal entity which
is proposed to become a subsidiary or establishment of
the SCE upon its formation;

‘employees’ representatives’ means the employees’ rep-
resentatives provided for by national law and/or practice;

‘representative body’ means the body representative of
the employees set up by the agreements referred to in
Article 4 or in accordance with the provisions of the
Annex, with the purpose of informing and consulting the
employees of an SCE and its subsidiaries and establish-
ments situated in the Community and, where applicable,
of exercising participation rights in relation to the SCE;

‘special negotiating body’ means the body established in
accordance with Article 3 to negotiate with the competent
organ of the participating legal entities regarding the
establishment of arrangements for the involvement of
employees within the SCE;

‘involvement of employees’ means any mechanism,
including information, consultation and participation,
through which employees’ representatives may exercise
an influence on decisions to be taken within an under-
taking;

‘information’ means the informing of the body representa-
tive of the employees and/or the employees’ representa-
tives by the competent organ of the SCE on questions
which concern the SCE itself and any of its subsidiaries
or establishments situated in another Member State or
which exceed the powers of the decision-making organs
in a single Member State at a time, in a manner and with
a content which allows the employees’ representatives to
undertake an in-depth assessment of the possible impact
and, where appropriate, prepare consultations with the
competent organ of the SCE;

‘consultation’ means the establishment of dialogue and
exchange of views between the body representative of the
employees and/or the employees’ representatives and the
competent organ of the SCE, at a time, in a manner and
with a content which allows the employees’ representa-
tives, on the basis of information provided, to express an
opinion on measures envisaged by the competent organ
which may be taken into account in the decision-making
process within the SCE;

(k)

‘participation’ means the influence of the body representa-
tive of the employees and/or the employees’ representa-
tives in the affairs of a legal entity by way of:

— the right to elect or appoint some of the members
of the legal entity’s supervisory or administrative
organ, or

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— the right to recommend and/or oppose the appoint-
ment of some or all of the members of the legal
entity’s supervisory or administrative organ.

— the composition of

the special negotiating
body does not entail a double representation
of the employees concerned.

SECTION II

NEGOTIATING PROCEDURE APPLICABLE TO SCEs ESTAB-
LISHED BY AT LEAST TWO LEGAL ENTITIES OR BY TRANS-
FORMATION

Article 3

Creation of a special negotiating body

1. Where the management or administrative organs of
participating legal entities draw up a plan for the establishment
of an SCE, they shall as soon as possible take the necessary
steps, including providing information on the identity of the
participating legal entities and subsidiaries or establishments,
as well as the number of their employees, to start negotiations
with the representatives of the legal entities’ employees on
arrangements for the involvement of employees in the SCE.

2.
For this purpose, a special negotiating body representa-
tive of the employees of the participating legal entities and
concerned subsidiaries or establishments shall be created in
accordance with the following provisions:

(a)

in electing or appointing members of the special negotiat-
ing body, it shall be ensured:

(i)

(ii)

that such members are elected or appointed in
proportion to the number of employees employed
in each Member State by the participating legal
entities and concerned subsidiaries or establish-
ments, by allocating in respect of a Member State
one seat per each portion of employees employed
in that Member State which equals 10 %, or
a fraction thereof, of the number of employees
employed in all the Member States taken together;

that in the case of an SCE formed by way of merger,
there are such further additional members from each
Member State as may be necessary in order to ensure
that the special negotiating body includes at least one
member representing each participating cooperative
which is registered and has employees in that
Member State and which it is proposed will cease
to exist as a separate legal entity following the
registration of the SCE, insofar as:

— the number of such additional members does
not exceed 20 % of the number of members
designated by virtue of point (i); and

If the number of such cooperatives is higher than
the number of additional seats available pursuant to
the first subparagraph, these additional seats shall
be allocated to cooperatives in different Member
States by decreasing order of
the number of
employees they employ.

(b) Member States shall determine the method to be used for
the election or appointment of the members of the special
negotiating body who are to be elected or appointed in
their territories. They shall take the necessary measures
to ensure that, as far as possible, such members shall
include at least one member representing each participat-
ing legal entity which has employees in the Member State
concerned. Such measures must not increase the overall
number of members. The methods used to nominate,
appoint or elect employee representatives should seek to
promote gender balance.

Member States may provide that such members may
include representatives of trade unions whether or not
they are employees of a participating legal entity or
concerned subsidiary or establishment.

Without prejudice to national legislation and/or practice
laying down thresholds for the establishing of a represen-
tative body, Member States shall provide that employees
in undertakings or establishments in which there are no
employees’ representatives through no fault of their own
have the right to elect or appoint members of the special
negotiating body.

3.
The special negotiating body and the competent organs
of the participating legal entities shall determine, by written
agreement, arrangements for the involvement of employees
within the SCE.

To this end, the competent organs of the participating legal
entities shall inform the special negotiating body of the plan
and the actual process of establishing the SCE, up to its
registration.

Subject to paragraph 6, the special negotiating body shall
4.
take decisions by an absolute majority of
its members,
provided that such a majority also represents an absolute
majority of the employees. Each member shall have one vote.
However, should the result of the negotiations lead to a
reduction of participation rights, the majority required for a
decision to approve such an agreement shall be the votes of
two thirds of the members of the special negotiating body
representing at least two thirds of the employees, including
the votes of members representing employees employed in at
least two Member States,

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— in the case of an SCE to be established by way of merger,
if participation covers at least 25 % of the overall number
of employees of the participating cooperatives, or

— in the case of an SCE to be established by any other way,
if participation covers at least 50 % of the overall number
of employees of the participating legal entities.

Reduction of participation rights means a proportion of
members of the organs of the SCE within the meaning of
Article 2(k), which is lower than the highest proportion
existing within the participating legal entities.

For the purpose of the negotiations, the special negotiat-
5.
ing body may request experts of its choice,
for example
representatives of appropriate Community level trade union
organisations, to assist it with its work. Such experts may be
present at negotiation meetings in an advisory capacity at the
request of the special negotiating body, where appropriate to
promote coherence and consistency at Community level.
The special negotiating body may decide to inform the
representatives of appropriate external organisations, including
trade unions, of the start of the negotiations.

6.
The special negotiating body may decide by the majority
set out in the second subparagraph not to open negotiations
or to terminate negotiations already opened, and to rely on
the rules on information and consultation of employees in
force in the Member States where the SCE has employees.
Such a decision shall stop the procedure to conclude the
agreement referred to in Article 4. Where such a decision has
been taken, none of the provisions of the Annex shall apply.

The majority required to decide not to open or to terminate
negotiations shall be the votes of two thirds of the members
representing at least two thirds of the employees, including
the votes of members representing employees employed in at
least two Member States.

In the case of an SCE established by way of transformation,
this paragraph shall not apply if there is participation in the
cooperative to be transformed.

The special negotiating body shall be reconvened at the written
its
request of at least 10 % of the employees of the SCE,
subsidiaries and establishments, or their representatives, at the
earliest two years after the abovementioned decision, unless
the parties agree to negotiations being reopened sooner. If the
special negotiating body decides to reopen negotiations with
the management but no agreement is reached as a result of
those negotiations, none of the provisions of the Annex shall
apply.

7.
Any expenses relating to the functioning of the special
negotiating body and, in general, to negotiations shall be borne
by the participating legal entities so as to enable the special
negotiating body to carry out its task in an appropriate
manner.

In compliance with this principle, Member States may lay
down budgetary rules regarding the operation of the special
negotiating body. They may in particular limit the funding to
cover one expert only.

Article 4

Content of the agreement

1.
The competent organs of the participating legal entities
and the special negotiating body shall negotiate in a spirit
of cooperation with a view to reaching an agreement on
arrangements for the involvement of the employees within the
SCE.

2. Without prejudice to the autonomy of the parties, and
subject to paragraph 4, the agreement referred to in para-
graph 1 between the competent organs of the participating
legal entities and the special negotiating body shall specify:

(a)

the scope of the agreement;

(b)

the composition, number of members and allocation of
seats on the representative body which will be the
discussion partner of the competent organ of the SCE in
connection with arrangements for the information and
consultation of the employees of the SCE and its subsidi-
aries and establishments;

(c)

the functions and the procedure for the information and
consultation of the representative body;

(d)

the frequency of meetings of the representative body;

(e)

(f)

(g)

the financial and material resources to be allocated to the
representative body;

if, during negotiations, the parties decide to establish one
or more information and consultation procedures instead
of
for
implementing those procedures;

representative body,

arrangements

the

a

if, during negotiations, the parties decide to establish
arrangements for participation, the substance of those
arrangements including (if applicable) the number of
members in the SCE’s administrative or supervisory body
which the employees will be entitled to elect, appoint,
recommend or oppose, the procedures as to how these
members may be elected, appointed, recommended or
opposed by the employees, and their rights;

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(h)

the date of entry into force of the agreement and its
duration, cases where the agreement should be renego-
tiated and the procedure for its renegotiation, including,
where appropriate, in the event of structural changes in
the SCE and its subsidiaries and establishments which
occur after the creation of the SCE.

The standard rules as laid down by the legislation of the
Member State in which the registered office of the SCE is to be
situated shall apply from the date of the registration of the SCE
where either:

(a)

the parties so agree; or

3.
The agreement shall not, unless provision is made
otherwise therein, be subject to the standard rules referred to
in the Annex.

(b)

by the deadline laid down in Article 5, no agreement has
been concluded, and:

4. Without prejudice to Article 15(3)(a), in the case of an
SCE established by means of transformation, the agreement
shall provide for at least
the same level of all elements
of employee involvement as the ones existing within the
cooperative to be transformed into an SCE.

The agreement may specify the arrangements for the
5.
entitlement of employees to participate in the general meetings
or in the section or sectorial meetings in accordance with
Article 9 of this Directive and Article 59(4) of Regulation (EC)
No 1435/2003.

Article 5

Duration of negotiations

— the competent organ of each of the participating
legal entities decides to accept the application of the
standard rules in relation to the SCE and so to
continue with its registration of the SCE, and

— the special negotiating body has not taken the

decision provided in Article 3(6).

2. Moreover,
the standard rules fixed by the national
legislation of the Member State of registration in accordance
with part 3 of the Annex shall apply only:

(a)

in the case of an SCE established by transformation, if the
rules of a Member State relating to employee participation
in the administrative or supervisory body applied to a
cooperative transformed into an SCE;

1.
Negotiations shall commence as soon as the special
negotiating body is established and may continue for six
months thereafter.

(b)

in the case of an SCE established by merger:

2.
The parties may decide, by joint agreement, to extend
negotiations beyond the period referred to in paragraph 1, up
to a total of one year from the establishment of the special
negotiating body.

Article 6

Legislation applicable to the negotiation procedure

Except where otherwise provided in this Directive, the legis-
lation applicable to the negotiation procedure provided for in
Articles 3, 4 and 5 shall be the legislation of the Member State
in which the registered office of the SCE is to be situated.

Article 7

Standard rules

1.
In order to achieve the objective described in Article 1,
Member States shall lay down standard rules on employee
involvement which must satisfy the provisions set out in the
Annex.

— if, before registration of the SCE, one or more forms
of participation applied in one or more of the
participating cooperatives covering at least 25 % of
the total number of employees employed by them,
or

— if, before registration of the SCE, one or more forms
of participation applied in one or more of the
participating cooperatives covering less than 25 %
of the total number of employees employed by them
and if the special negotiating body so decides;

(c)

in the case of an SCE established by any other way;

— if, before registration of the SCE, one or more forms
of participation applied in one or more of the
participating legal entities covering at least 50 % of
the total number of employees employed by them;
or

— if, before registration of the SCE, one or more forms
of participation applied in one or more of the
participating legal entities covering less than 50 %
of the total number of employees employed by them
and if the special negotiating body so decides.

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If
there was more than one form of participation
within the various participating legal entities, the special
negotiating body shall decide which of those forms must
be established in the SCE. Member States may fix the
rules which are applicable in the absence of any decision
on the matter for an SCE registered in their territory. The
special negotiating body shall
inform the competent
organs of the participating legal entities of any decisions
taken pursuant to this paragraph.

3. Member States may lay down that the standard rules
referred to in Part 3 of the Annex shall not apply in the case
provided for in paragraph 2(b).

SECTION III

RULES APPLICABLE TO SCEs ESTABLISHED EXCLUSIVELY
BY NATURAL PERSONS OR BY A SINGLE LEGAL ENTITY
AND NATURAL PERSONS

Article 8

1.
In the case of an SCE established exclusively by natural
persons or by a single legal entity and natural persons, which
together employ at least 50 employees in at least two Member
States, the provisions of Articles 3 to 7 shall apply.

In the case of an SCE established exclusively by natural
2.
persons or by a single legal entity and natural persons, which
together employ fewer than 50 employees, or employ 50
or more employees in only one Member State, employee
involvement shall be governed by the following:

— in the SCE itself, the provisions of the Member State of
the SCE’s registered office, which are applicable to other
entities of the same type, shall apply,

— in its subsidiaries and establishments, the provisions of
the Member State where they are situated, and which are
applicable to other entities of the same type, shall apply.

In the case of transfer from one Member State to another of
the registered office of an SCE governed by participation, at
least the same level of employee participation rights shall
continue to apply.

least one third of

If, after the registration of an SCE referred to in
3.
paragraph 2, at
the total number of
employees of the SCE and its subsidiaries and establishments
in at least two different Member States so requests, or if the
total number of employees reaches or exceeds 50 employees
in at least two Member States, the provisions of Articles 3 to 7
shall be applied, mutatis mutandis. In this case, the words
‘participating legal entities’ and ‘concerned subsidiaries or
establishments’ shall be replaced by the words ‘SCE’ and
‘subsidiaries or establishments of the SCE’ respectively.

SECTION IV

PARTICIPATION IN THE GENERAL MEETING OR SECTION
OR SECTORIAL MEETING

Article 9

Subject to the limits laid down in Article 59(4) of Regulation
(EC) No 1435/2003, the employees of the SCE and/or their
representatives will be entitled to participate in the general
meeting or, if it exists, in the section or sectorial meeting, with
the right to vote, in the following circumstances:

1. when the parties so decide in the agreement referred to

in Article 4, or

2. when a cooperative governed by such a system transforms

itself into an SCE, or

3. when, in the case of an SCE established by means other
than transformation, a participating cooperative was
governed by such a system and:

(i)

the parties cannot reach agreement, as referred to in
Article 4, by the deadline laid down in Article 5; and

(ii) Article 7(1)(b) and Part 3 of the Annex apply; and

(iii)

the participating cooperative governed by such a
system has the highest proportion of participation,
within the meaning of Article 2(k), in force in the
participating cooperatives concerned before regis-
tration of the SCE.

SECTION V

MISCELLANEOUS PROVISIONS

Article 10

Reservation and confidentiality

1. Member States shall provide that members of the special
negotiating body or the representative body, and experts who
assist them, are not authorised to reveal any information
which as been given to them in confidence.

The same shall apply to employees’ representatives in the
context of an information and consultation procedure.

This obligation shall continue to apply, wherever the persons
referred to may be, even after the expiry of their terms of
office.

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2.
Each Member State shall provide, in specific cases and
under the conditions and limits laid down by national
legislation, that the supervisory or administrative organ of an
SCE or of a participating legal entity established in its territory
is not obliged to transmit information where its nature is such
that, according to objective criteria, to do so would seriously
harm the functioning of the SCE (or, as the case may be, a
participating legal entity) or its subsidiaries and establishments
or would be prejudicial to them.

A Member State may make such dispensation subject to prior
administrative or judicial authorisation.

3.
Each Member State may lay down particular provisions
for SCEs in its territory which pursue directly and essentially
the aim of ideological guidance with respect to information
and the expression of opinions, on condition that, on the date
of adoption of this Directive, such provisions already exist in
the national legislation.

4.
In applying paragraphs 1, 2 and 3, Member States
shall make provision for administrative or judicial appeal
procedures which the employees’ representatives may initiate
when the supervisory or administrative organ of an SCE or of
a participating legal entity demands confidentiality or does not
give information.

Such procedures may include arrangements designed to pro-
tect the confidentiality of the information in question.

Article 11

Operation of the representative body and procedure for
the information and consultation of employees

The competent organ of the SCE and the representative body
shall work together in a spirit of cooperation with due regard
for their reciprocal rights and obligations.

The same shall apply to cooperation between the supervisory
or administrative organ of
the SCE and the employees’
representatives in conjunction with a procedure for the
information and consultation of employees.

Article 12

Protection of employees’ representatives

The members of the special negotiating body, the members
of the representative body, any employees’ representatives
exercising functions under the information and consultation
procedure and any employees’ representatives in the supervis-
ory or administrative organ of an SCE who are employees of
the SCE, its subsidiaries or establishments or of a participating
legal entity shall, 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.

This shall apply in particular to attendance at meetings of the
special negotiating body or representative body, any other
meeting under the agreement referred to in Article 4(2)(f) or
any meeting of the administrative or supervisory organ, and
to the payment of wages for members employed by a
participating legal entity or the SCE or its subsidiaries or
establishments during a period of absence necessary for the
performance of their duties.

Article 13

Misuse of procedures

Member States shall take appropriate measures in conformity
with Community law with a view to preventing the misuse of
an SCE for the purpose of depriving employees of rights to
employee involvement or withholding such rights.

Article 14

Compliance with this Directive

1.
Each Member State shall ensure that the management of
establishments of an SCE and the supervisory or administrative
organs of subsidiaries and of participating legal entities which
are situated within its territory and the employees’ representa-
tives or, as the case may be, the employees themselves abide
by the obligations laid down by this Directive, regardless of
whether or not the SCE has its registered office within its
territory.

2. Member States shall provide for appropriate measures in
the event of failure to comply with this Directive; in particular
they shall ensure that administrative or legal procedures are
available to enable the obligations deriving from this Directive
to be enforced.

Article 15

Link between this Directive and other provisions

1. Where an SCE is a Community-scale undertaking or
a controlling undertaking of a Community-scale group of
undertakings within the meaning of Directive 94/45/EC or of
Council Directive 97/74/EC of 15 December 1997 extending
the said Directive to the United Kingdom (1), the provisions of
these Directives and the provisions transposing them into
national
legislation shall not apply to them or to their
subsidiaries.

However, where the special negotiating body decides in
accordance with Article 3(6) not to open negotiations or to
terminate negotiations already opened, Directive 94/45/EC or
Directive 97/74/EC and the provisions transposing them into
national legislation shall apply.

(1) OJ L 10, 16.1.1998, p. 22.

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2.
Provisions on the participation of employees in company
bodies provided for by national legislation and/or practice,
other than those implementing this Directive, shall not apply
to the SCEs to which Articles 3 to 7 apply.

3.

(a)

(b)

This Directive shall not prejudice:

the existing rights to involvement of employees provided
for by national legislation and/or practice in the Member
States as enjoyed by employees of the SCE and its
subsidiaries and establishments, other than participation
in the bodies of the SCE;

the provisions on participation in the bodies laid down
by national legislation and/or practice applicable to the
subsidiaries of the SCE or to SCEs to which Articles 3
to 7 do not apply.

4.
In order to preserve the rights referred to in paragraph 3,
Member States may take the necessary measures to guarantee
that the structures of employee representation in participating
legal entities which will cease to exist as separate legal entities
are maintained after the registration of the SCE.

Article 16

Final provisions

1. Member States shall adopt the laws, regulations and
administrative provisions necessary to comply with this Direc-
tive no later than 18 August 2006, or shall ensure by that date
that management and labour introduce the
at
required provisions by way of agreement, the Member States

the latest

being obliged to take all necessary steps enabling them at all
times to guarantee the results imposed by this Directive. They
shall forthwith inform the Commission thereof.

2. When Member States adopt these measures, they shall
contain a reference to this Directive or shall be accompanied
by such reference on the occasion of their official publication.
The methods of making such reference shall be laid down by
the Member States.

Article 17

Review by the Commission

Not later than 18 August 2009, the Commission shall, in
consultation with the Member States and with management
and labour at Community level, review the application of
applying this Directive, with a view to proposing suitable
amendments to the Council where necessary.

Article 18

Entry into force

This Directive shall enter into force on the date of
publication in the Official Journal of the European Union.

its

Article 19

Addressees

This Directive is addressed to the Member States.

Done at Brussels, 22 July 2003.

For the Council

The President
G. ALEMANNO

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ANNEX

STANDARD RULES

(referred to in Articles 7 and 8)

Part 1: Composition of the body representative of the employees

In order to achieve the objective described in Article 1, and in the cases referred to in Article 7, a representative body
shall be set up in accordance with the following rules:

(a)

The representative body shall be composed of employees of the SCE and its subsidiaries and establishments
elected or appointed from their number by the employees’ representatives or, in the absence thereof, by the
entire body of employees.

(b)

The election or appointment of members of the representative body shall be carried out in accordance with
national legislation and/or practice.

Member States shall lay down rules to ensure that the number of members of, and allocation of seats on, the
representative body shall be adapted to take account of changes occurring within the SCE and its subsidiaries
and establishments. The methods used to nominate, appoint or elect employee representatives should seek to
promote gender balance.

(c) Where its size so warrants, the representative body shall elect a select committee from among its members,

comprising at most three members.

(d)

The representative body shall adopt its rules of procedure.

(e)

The members of the representative body are elected or appointed in proportion to the number of employees
employed in each Member State by the SCE and its subsidiaries or establishments, by allocating in respect of a
Member State one seat per each portion of employees employed in that Member State which equals 10 %, or a
fraction thereof, of the number of employees employed by them in all the Member States taken together.

(f)

The competent organ of the SCE shall be informed of the composition of the representative body.

(g) Not later than four years after its establishment, the representative body shall examine whether to open
negotiations for the conclusion of the agreement referred to in Articles 4 and 7 or to continue to apply the
standard rules adopted in accordance with this Annex.

Article 3(4) to (7) and Articles 4, 5 and 6 shall apply, mutatis mutandis, if a decision has been taken to negotiate
an agreement according to Article 4, in which case the term ‘special negotiating body’ shall be replaced by
‘representative body’. Where, by the deadline by which the negotiations come to an end, no agreement has
been concluded, the arrangements initially adopted in accordance with the standard rules shall continue to
apply.

Part 2: Standard rules for information and consultation

The competence and powers of the representative body set up in an SCE shall be governed by the following rules:

(a)

The competence of the representative body shall be limited to questions which concern the SCE itself and any
of its subsidiaries or establishments situated in another Member State or which exceed the powers of the
decision-making organs in a single Member State.

(b) Without prejudice to meetings held pursuant to paragraph (c), the representative body shall have the right to
be informed and consulted and, for that purpose, to meet with the competent organ of the SCE at least once a
year, on the basis of regular reports drawn up by the competent organ, on the progress of the business of the
SCE and its prospects. The local managements shall be informed accordingly.

The competent organ of the SCE shall provide the representative body with the agenda for meetings of the
administrative, or, where appropriate, the management and supervisory organ, and with copies of all documents
submitted to the general meeting of its members.

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the business and of production and sales,

The meeting shall relate in particular to the structure, economic and financial situation, the probable
development of
initiatives with regard to corporate social
responsibility, the situation and probable trend of employment, investments, and substantial changes concerning
organisation, the introduction of new working methods or production processes, transfers of production,
mergers, cut-backs or closures of undertakings, establishments or important parts thereof, and collective
redundancies.

(c) Where there are exceptional circumstances affecting the employees’

interests to a considerable extent,
particularly in the event of relocations, transfers, the closure of establishments or undertakings or collective
redundancies, the representative body shall have the right to be informed. The representative body or, where it
so decides, in particular for reasons of urgency, the select committee, shall have the right to meet at its request,
the competent organ of the SCE or any more appropriate level of management within the SCE having its own
powers of decision, so as to be informed and consulted on measures significantly affecting employees’ interests.

Where the competent organ decides not to act in accordance with the opinion expressed by the representative
body, this body shall have the right to a further meeting with the competent organ of the SCE with a view to
seeking agreement.

In the case of a meeting organised with the select committee, those members of the representative body who
represent employees who are directly concerned by the measures in question shall also have the right to
participate.

The meetings referred to above shall not affect the prerogatives of the competent organ.

(d) Member States may lay down rules on the chairing of information and consultation meetings.

Before any meeting with the competent organ of the SCE, the representative body or the select committee,
where necessary enlarged in accordance with the third subparagraph of paragraph (c), shall be entitled to meet
without the representatives of the competent organ being present.

(e) Without prejudice to Article 10, the members of the representative body shall inform the representatives of the
employees of the SCE and of its subsidiaries and establishments of the content and outcome of the information
and consultation procedures.

(f)

The representative body or the select committee may be assisted by experts of its choice.

(g)

(h)

In so far as this is necessary for the fulfilment of their tasks, the members of the representative body shall be
entitled to time off for training without loss of wages.

The costs of the representative body shall be borne by the SCE, which shall provide the body’s members with
the financial and material resources needed to enable them to perform their duties in an appropriate manner.

In particular, the SCE shall, unless otherwise agreed, bear the cost of organising meetings and providing
interpretation facilities and the accommodation and travelling expenses of members of the representative body
and the select committee.

In compliance with these principles, the Member States may lay down budgetary rules regarding the operation
of the representative body. They may in particular limit funding to cover one expert only.

Part 3: Standard rules for participation

Employee participation in an SCE shall be governed by the following provisions:

(a)

(b)

In the case of an SCE established by transformation, if the rules of a Member State relating to employee
participation in the administrative or supervisory body applied before registration, all aspects of employee
participation shall continue to apply to the SCE. Paragraph (b) shall apply mutatis mutandis to that end.

In other cases where an SCE is established, the employees of the SCE, its subsidiaries and establishments and/or
their representative body shall have the right to elect, appoint, recommend or oppose the appointment of a
number of members of the administrative or supervisory body of the SCE equal to the highest proportion in
force in the participating companies concerned before registration of the SCE.

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(c)

(d)

If none of the participating legal entities was governed by participation rules before registration of the SCE, the
latter shall not be required to establish provisions for employee participation.

The representative body shall decide on the allocation of seats within the administrative or supervisory body
among the members representing the employees from the various Member States or on the way in which the
SCE’s employees may recommend or oppose the appointment of the members of these bodies according to the
proportion of the SCE’s employees in each Member State. If the employees of one or more Member States are
not covered by this proportional criterion, the representative body shall appoint a member from one of those
Member States, in particular the Member State of the SCE’s registered office where that is appropriate. Each
Member State may determine the allocation of the seats it is given within the administrative or supervisory
body.

(e)

Every member of the administrative body or, where appropriate, the supervisory body of the SCE who has been
elected, appointed or recommended by the representative body or, depending on the circumstances, by the
employees shall be a full member with the same rights and obligations as the members representing the
members of the cooperative, including the right to vote.