On Thursday 21 June, a number of interest groups made recommendations to the MEPs to improve the legislative package to modernise European company law, at a hearing of the committee on legal affairs (JURI) of the European Parliament (see EUROPE 12009). Although their degrees of satisfaction vary, they were not short of suggestions.
On the 'mobility' plank, the greatest criticism was levelled by Wolfgang Kowalsky of the European Trade Unions Confederation (ETUC). The title of his presentation gave an insight into what was to come, as it described the tabled proposal as a “missed opportunity for more democracy at work”.
ETUC considers that the proposal favours businesses too much and employees not enough, particularly concerning safeguards over employees' rights of information, consultation and participation.
If, as Kowalsky contends, the Commission has completely missed the boat, Parliament must now step in to fill in the gaps.
The first area for work concerns transfers of headquarters. The ETUC expert considers that the criteria proposed by the Commission are insufficient and will not stamp out the phenomenon of so-called 'letterbox' businesses.
ETUC also has concerns over the provisions on cross-border demergers and calls on the MEPs to reject this chapter, arguing that in its current state, it features too many incentives to bend the rules.
“Today, we see the glass not even half full; it is only a third”, he summed up.
The employers had a different take. Pedro Oliveira, director of legal affairs at BusinessEurope, was more positive. “We have been calling for the freedom of establishment to become a reality in the EU for 30 years”, he explained.
This optimism was shared by Pierre-Henri Conac of the University of Luxembourg, who congratulated the Commission on having had the “courage” to present a proposal on transfers of headquarters.
However, Oliveira stressed the complexity of the proposal. “If you try to follow it step by step, you won't need a lawyer so much as a quantum physicist”, he joked. He considers that the proposed procedure is long, cumbersome and may overlap with other legislative text.
The representative of BusinessEurope went on to criticise the extremely negative image this proposal gives to entrepreneurial activity, referring to the obligation on the company's member state of origin to block the transfer of its headquarters if it considers that it is an “artificial arrangement aiming to obtain undue tax advantages”.
Whilst recognising the need for safeguards against fraud, it considers that the Commission's proposal goes too far and that a better approach would be to launch the procedure in the event of complaints from workers or shareholders, for instance.
When questioned by Parliament rapporteur, Austria's Evelyn Regner (S&D), about the work to reduce 'letterbox' companies, Oliveira said that company law would by no means be a “panacea” for all ills. “I do not think that all transfers for tax reasons are negative”, he added, calling the focus to be on abuses.
On the 'digitalisation' plank of the package, on the other hand, opinions were far more consensual and most parties expressed satisfaction.
“SMEs' expectations have been met on this point”, said UEAPME's Luc Hendrickx, who said that he had very few criticisms to make of the rest of the proposal. (Original version in French by Marion Fontana)