Brussels, 04/04/2005 (Agence Europe) - The European Parliament's legal affairs committee has adopted the report by German Christian Democrat Klaus-Heiner Lehne on the proposal of directive presented by the European Commission in order to facilitate cross-border mergers of corporate companies. Apart from some slight differences, the report is in line with the Council's common position of November 2004, especially on the controversial subject of worker participation. The plenary vote will be held in Strasbourg in May. The fact that there are so many interinstitutional meetings gives reasonable hope of the future directive being adopted at first reading.
The EP Committee on Legal Affairs states its agreement with the basic principle of the legislative proposal. When it comes to cross-border mergers of corporate enterprises, the general rule will be that the legislation applicable will be that of the Member State in which the company resulting from the merger has its registered seat. MEPs adopted amendments in order to guarantee fair worker participation in the merged undertaking. These amendments confirm the common position of last November's Competitiveness Council on this highly controversial issue (see EUROPE N.8836). For companies formed from mergers that have over 500 employees, negotiations will cover worker participation in the management bodies of the company arising from the merger. They will take place according to the arrangements set out in Directive 2001/86/EC, which completes the European Company (EC) by-laws. Article 7 of the directive governs worker involvement in the management bodies of European limited companies. In the case of European company that arises from a merger, worker participation is guaranteed when one quarter of the number of employees in the new entity are from a company that apply a worker participation system. This provision opened the way in parliamentary committee to a compromise that, in the case of cross-border merger, provides for worker involvement if one third of the employees of the new entity (as in the Council common position) come from a company comprising such participation.
The European Commission suggests allowing 18 months for Member States to implement the provisions of the future legislative act. Like the Council's political agreement, the Lehne report increases this to 24 months.