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COUNTRY OVERVIEW

With Danish legislation already providing for employee board-level representation in all companies with 35 or more employees, the directive on employee representation in European companies was of direct concern. The legislation was implemented with the close involvement and to the apparent satisfaction of both unions and employers.

For further information on the SE legislation, such as the choice of SNB members, click on the more button.

Denmark has existing legislation providing for employee board-level representation in all but the smallest companies – the threshold is 35 employees – so the issue of employee board-level in European companies is of practical concern. Both unions and employers were involved in detailed discussions on the transposition of the directive and the final outcome appears to have satisfied both sides, with the aim being to stick as closely as possible to existing Danish legislation.

Form of transposition

Directive was transposed by law in time for the October 2004 deadline

The directive on employee involvement in European companies was transposed through the following legislation dated 26 April 2004: Act on the involvement of employees in European Companies ( Lov om medarbejderindflydelse i SE-selskaber). Separate legislation was passed on 6 May 2004 adapting Danish company legislation to the Regulation on European companies.

Special negotiating body (SNB)

Selection of national members

Danish members of the SNB are elected by employee members of the cooperation committee, the Danish equivalent of the works council.

The Danish members of the SNB are elected by the employee representatives on the cooperation committee ( samarbejdsudvalgene ). This is a joint employer/employee body and is in many ways the Danish equivalent of the works councils, which exist in many other member states, although in Denmark those representing the employees are not chosen through an election by the whole workforce but are the union representatives.

If there is no cooperation committee the members of the SNB are chosen directly by the union representatives, and if there are no union representatives, or if management and the normal employee representatives agree, the SNB members are elected by all employees.

Where there are groups of employees who are not represented in the cooperation committee – these may be employees who are in unions other than those affiliated to the largest union confederation, the LO – or by the union representatives, they can send their own representatives to contribute to the process of electing SNB members (§ 9).

External trade union representatives

External trade union representatives from Denmark cannot be members of the SNB.

External union representatives from Denmark cannot be members of the SNB. The Danish legislation states specifically that Danish SNB members are elected “from among the employees” (§ 9 (1)).

Financing of experts

Funding of more than a single expert is not guaranteed.

The participating companies bear the costs of the activities of the SNB including the cost of “at least one expert”.

Standard rules under the fallback procedure

Allocation of national seats on SE representative body

Danish members of the SE representative body are chosen in the same way as Danish members of the SNB – by the cooperation committee.

The procedure for allocating seats on the SE representative body – known as the representative body (repræsentationsorgan) in the Danish legislation, is the same as the procedure for choosing SNB members. In other words, they are chosen by the cooperation committee, although other possibilities exist – election by the union representatives or direct elections – if there is no cooperation committee. There is also provision for employees no represented by the cooperation committee or the union to have an input into the choice (see section on SNB) (§ 21).

Budget of representative body

The company should bear the costs of the representative body, including at least one expert.

The company is obliged to bear the costs of the representative body, providing its members with the resources necessary to enable them to fulfil their tasks “in an appropriate manner.” This includes the costs of “at least one expert” (§ 30). The legislation also states that the minister of employment may lay down budgetary rules for the operation of the representative body (§ 31).

National procedure for the allocation of board seats

Danish board members are elected by all Danish employees.

If there are to be Danish employee board-level representatives under the fallback procedure, they should be elected by all employees. The election is organised by an election committee, consisting of both management and employee representatives, although those representing the employees must be in a majority. The employee representatives on the election committee are, in the first instance, chosen from among the employee members of the cooperation committees in the companies concerned, or, if there is no cooperation committee, from among the employees. If there are union representatives within a company they should be represented “wherever possible” (§ 36 to § 39).

Misuse of procedures and structural change

Misuse of procedures

Changes in an SE’s first two years which would have produced a different outcome to the negotiations require the negotiations to be restarted, unless it can be shown that it was not the intention to limit employee involvement. Other evidence showing that the intention was to limit employee involvement also result in new negotiations.

Changes within the SE in the first two years which would have led to a different outcome of negotiations, had they applied at the start of the procedure, require new negotiations. These should be requested either by the representative body or by employee representatives in companies which have become part of the SE after its establishment. However, this requirement to begin new negotiations does not apply if it can be shown that the changes were “not intended to limit employees’ involvement”.

If there is evidence other than changes, which show that “the purpose of establishing the SE was primarily to limit employees’ involvement”, there should be new negotiations (§45).

Structural change

Structural changes in the SE only require renegotiation within the framework of the misuse provisions of the legislation.

There is no automatic right to renegotiate the agreement if there are changes in the structure of the SE. Changes in first two years of an SE, which would have resulted in a different outcome to the negotiations if they had occurred at the start, require new negotiations. However, these are not required if it can be shown that the changes were “not intended to limit employees’ involvement” (§45). (See section on misuse.)

Position of trade unions and employers

Unions and employers were involved in detailed discussions on the introduction of the legislation and seem satisfied with the outcome.

Union and employers were involved in the discussions with the government which led to the transposition of the directive on employee involvement in European companies into Danish law. Two of the major topics were the election procedures, and whether the legislation should contain a clause making it possible for collective agreements to supplement the law. The election procedures finally adopted provide for different arrangements for the election of the SNB and the representative body under the fallback procedure on the one hand, and Danish employee board-level representatives on the other. The method of choosing SNB and representative body members is in line with the arrangements already adopted for European works councils; the method for choosing board-level representatives is in line with that used to elect employee board-level members in Danish national companies. On the possibility of collective agreements supplementing the legislation, it was finally agreed that this would not be appropriate.

Following these detailed discussions the legislation was adopted and there is no evidence that either employers or unions were unhappy with the outcome. For more details see report by Herman Knudsen (Aalborg University), March 2004.

L. Fulton (2008) Anchoring the European Company in National Law - Country Overviews (online publication, prepared for worker-participation.eu)

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