Facts and Figures

Since 2005 the European Trade Union Institute in Brussels has been regularly issuing information on registered European Companies (SE) through its SE Factsheets Database, available online at http://ecdb.worker-participation.eu . The information is compiled by its SE Factsheet team coordinated by Melinda Kelemen and Michael Stollt with support from the ETUI’s SEEurope research network.

The SE legislation represents a milestone not only in the field of EU Company Law but also in the field of European industrial relations. The SE Directive contains provisions for a legally binding procedure of company-level negotiations on employee information, consultation and participation (at board level). The SE Factsheets aim to provide information on the use of the SE statute and to monitor implementation of the SE Directive in the field of employee involvement.

Unfortunately, there is as yet no central registry for SEs which are always registered at national level. The information available in the EU Official Journal is very limited, especially with regard to the aspect of employee involvement.

The ETUI is seeking to fill this important gap by its research on SEs. In the absence of a central European registry, the main sources for the SE Factsheets are the national registries, the Supplement to the Official Journal of the European Union (TED), and further own research.

For its work on the SE, the ETUI‘s SEEurope network has distinguished between different types of SE so as to better describe the diversity of SEs which quickly evolved after October 2004. The categorisation allows distinction between SEs depending on whether the company has operations and employees (“normal SE”), operations but no employees (“empty SE”) or neither operations nor employees (“shelf/shell SE”). SEs which are probably operating but where not enough information (e.g. on the number of employees) is available for classification are referred to as “UFO SEs” (“Unidentified Flying Objects”). The overwhelming majority of these UFO SEs is in the Czech Republic, largely due to theestablishment and activation of shelf companies in this country.

From an employee involvement perspective, the main focus of interest is the “normal SEs”. However, collection of information on Empty and Shelf SEs is crucial to be able to follow up if they are subsequently activated and/or acquire employees.

Since introduction of the European Company Statute in October 2004, the number of SEs has increased steadily year by year (almost at exponential growth rates). On 1 March 2011 the ETUI European Company Database (ECDB) provides information on a total of 1113 SEs. However, this rather impressive total should not blind observers to the fact that many SEs do not conform to the standard definition. Many SEs are in fact without employees (‘empty SEs’) and/or even without a specific business purpose (‘shelf SEs’). Less, than one fifth of the total number of SEs have been identified as ‘normal' SEs. However, the number of ‘normal' SEs might in practice be significantly higher. In practice it proves to be extremely difficult to find out more about the enormous number of ’unidentified flying objects’ (UFO SEs) mainly in the Czech Republic where little is known about the current workforce and even less about employee involvement.

SEs can today be found in 25 countries of the „EU-27+3“ (Norway, Liechtenstein, Iceland). Whereas Germany is home to almost half of the known normal SEs, the Czech Republic has the „highest score“ with regard to the overall number of SEs. Little is known about the employee figures of the Czech SEs which means that a large proportion of them are classified in the database as UFO SEs.

Besides these two countries, significant SE home countries are Slovakia, the Netherlands, the UK, France, Luxemburg, Austria and Cyprus. The „TOP-10“ SE countries together host approx. 90% of all SEs.

This graph indicates the business sectors in which ‘normal’ SEs operate. The distinction refers to the respective European Industry Federation(s). More than half of the identified ‘normal’ SEs are active in service sectors, mainly financial and commercial services. But a considerable number of SEs are also found in the metal and chemical sectors.

The SE Regulation describes 4 different ways of setting up an SE (Merger/Holding/Subsidiary/Conversion). Most of the normal SEs have been founded either by way of a merger between two (or more) companies or through the conversion of an existing public limited company. However, a new de facto form of foundation has developed over time, namely, the „activated shelf company (see slide below).

The SE regulation allows the SE to set up further SEs as subsidiaries. Particularly in Germany and the Czech Republic, a market for SE shelf companies has developed. Often a shelf SE serves as a vehicle to set up further shelf SEs („incubator SE“) which are then sold to interested clients. The new owner subsequently activates the SE by transferring employees into it and/or by starting business activities.

This development represents a potential threat to worker involvement rights in an SE. In this regard, it has to be borne in mind that mechanisms for securing employee rights to information, consultation and participation are guaranteed only at the moment of founding of SEs. It is accordingly difficult to negotiate workers’ rights at a later point in time, when the company has recruited its employees. Indeed, there have already been several cases of employees being deprived of their involvement rights through the activation of a former shelf SE company.

The SE‘s General Meeting of Shareholders is free to decide on the board structure of the SE. It is free to choose between a monistic board (as is the case in e.g. the UK and Sweden) or a dualistic board structure with a management board and a separate supervisory board (as in the Netherlands and Germany). This indeed represents a key innovation introduced by the SE, since in many countries a certain board structure for national companies is prescribed by national company law.

The majority of normal SEs have kept their original board structure. However, especially in Germany, a considerable percentage of the 'normal 'SEs have opted for a monistic board, something hitherto unknown under the German system.

SEs have also started to use their specific flexibility with regard to cross-border mobility: 63 of them have already transferred their seat to another member state, sometimes immediately after their registration in another member state.

Compared to the total number of SEs, the number of completed transfers of seat is not outstanding. From NL, LU and DE relatively many companies moved to different EU member states. The motivation behind the transfer is not always known, likely tax reasons and / or company restructuring issues are motives in a number of cases.

By March 2012 an agreement on worker involvement had been concluded in only 79 of the more than1000 SEs. The agreements of the larger SEs, in particular, are generally in line with good ‘EWC practice’ and, on certain points, go beyond the provisions of the SE Directive.

In 41 SEs the rights enshrined in the agreement include board-level participation, thereby adding an important dimension for workers’ voice in company decision-making.

Today, some 128 employee board members represent the interests of the workforce on SE supervisory or administrative boards. A fundamental innovation introduced by the SE legislation is the transnational component of participation at board level. In a number of SEs (e.g. Allianz SE, BASF SE and MAN Diesel & Turbo SE) employee representatives from several countries sit on the board and represent the interests of the European workforce as a whole. SE employee board-level representatives today come from 11 different countries (AU, BE, CZ, DK, FR, DE, HU, IT, NL, PL, UK).

Between 2004 and 2012 a total of 26 registered SEs has been liquidated/deleted from the national registries and or transformed (back) into a national legal form.

‘Planned SE’s - This category includes companies in which the official transformation process has already started; for example, the general meeting of shareholders has approved the transformation plan and/or an SNB has been established and the company’s intention has been made public. Some of the companies have been on the list for a long time. In these cases, the intention is still alive and thus the companies are still listed as ‘planned’.