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Operation of the ‘Before-and-After’ Principle in the European Company Statute

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The ‘before-and-after’ principle can be regarded as the backbone of both Directive 2001/86/EC and Regulation 2157/20011 on the European Company Statute, as it supports all stages of the determination and operation of employee information, consultation and participation in the decision-making processes of a European company (Societas Europaea, or SE). To understand better the central role played by this principle, an overview of the reasons underlining its adoption is required.

The underlying reason for the principle was the failure of the Member States, through almost 40 years of deliberation on the SE project, to adopt uniform rules concerning employee participation in the new corporate instrument. The term ‘participation’ or ‘involvement’ means an employee's right to appoint or elect a percentage of members to SE bodies, or the right to nominate or reject a percentage of, or all, candidates.

Given the wide qualitative differences among systems of employee participation in the Member States, difficulties in achieving political consensus had already emerged in 1966, when Prof. Pieter Sanders submitted the initial proposal for the development of employee involvement in an SE at a time when the Community comprised only six members. The governing principle of Sanders’ proposal was to retain employee involvement if it pre-existed, and to avoid initiating involvement if it did not already exist. The proposal included various participation models based on the prevalent national ones. However, the model applicable in an SE was not based on negotiations between social partners. According to Sanders, employee involvement should be based on the national form of involvement to which the SE to be established demonstrated the strongest link. This link was determined by whichever Member State had the highest proportion of employees. However, should the SE be linked equally to more than one legal order, the most protective form of participation would prevail, since the proposed models were not considered equivalents.

Document Type: Research Article


Publication date: January 1, 2009

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