On Thursday 6 December, the MEPs of the European Parliament's Legal Affairs Committee (JURI) approved – by a very large majority (21 votes in favour and 2 against) – the draft report drawn up by Evelyn Regner (S&D, Austria) on the 'mobility' aspect of the legislative package on company law.
The long-awaited package of measures aims to modernise European company law, including in particular a proposal for a directive laying down harmonised procedures for cross-border conversions and divisions, as well as a targeted review in respect of mergers (see EUROPE 12009).
"Today we stroke a great success for more democracy at work when it comes to company restructuring within Europe", the rapporteur said, by way of celebration, after the vote.
The work was substantial in scope and MEPs agreed on about a hundred compromise amendments. All in all, Mrs Regner is satisfied with the result, believing that the final report strengthens the information, consultation and participation of workers' representatives throughout the whole process.
The Parliamentary text also sets out that employees or their representatives must be consulted and provided information before the company's management body decides on a cross-border mobility project. Workers, shareholders and creditors should be given the opportunity to comment at an early stage in the process.
The management body is also required to prepare a report explaining and justifying the legal and economic aspects of cross-border conversions and subsequent consequences for workers. In respect of Parliament, this report should also explain the reasons behind why the company decided upon a conversion. Workers would be able to deliver an opinion that can be annexed to the report, and the management body would be required to provide a reasoned response, according to MEPs.
The text also specifies that the agreed level of employee participation must not be lower than that which was applied in the company before the conversion, nor lower than the level that would apply in the Member State of destination.
MEPs also agreed to improve protection for shareholders and creditors throughout the process.
A key element of the Commission's proposal was the obligation for the company’s Member State of departure to block the process if it considers it to be an "artificial arrangement” aimed at obtaining undue tax benefits or if it should infringe upon employees' rights.
The Parliamentary text has maintained this provision and goes even further by specifying that "Member States are also required to ensure that cross-border conversion corresponds to the actual pursuit of a genuine economic activity, including those taking place within the digital sector, by means of being permanently established in the Member State of destination for an indefinite period”, in order to avoid the creation of "letterbox companies".
The final text makes it optional for the competent national authority to consult an independent expert to undertake a thorough assessment before authorising or denying the cross-border transaction.
It should be noted that the provisions on cross-border divisions were finally kept, even though the rapporteur initially considered that their added value was very limited (see EUROPE 12081).
For Mrs Regner, the vote on her report is a clear signal to the Council of Ministers that the Parliament has been able to work efficiently and quickly and is now ready to enter into negotiations. The Council has not yet adopted its position and should not a priori do so under the Austrian Presidency. (Original version in French by Marion Fontana)