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Transposition of the SE legislation in the Slovak Republic (Report: July 2004)

The Slovak Republic is committed to transposing the acquis communautaire as a whole, with some derogations, by the date of EU accession, 1 May 2004. Under the auspices of the Ministry of Justice and the Ministry of Labour, Social Affairs and Family a new Act on the European Company (hereafter “SE”) was drafted, and on 13 May 2004 submitted for debate by the Council of Economic and Social Agreement (hereafter “CESA”). The Act was discussed and approved by the Slovak government on 26 May 2004, although it has not yet been discussed by the CESA. According to the legislator, a significant impact on employment is not expected. A negative impact could derive from the transfer of an SE’s registered office to another member state, but it is anticipated that this would affect relatively few jobs.

By means of the Law on the SE, the Slovak Republic must transpose the parts of Council Regulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for a European company (SE) and of Council Directive 2001/86/EC supplementing the Statute for a European company with regard to employee involvement where the EU has left regulation up to the member state.

This Regulation became part of Slovak legislation from the moment the Slovak Republic became a full member of the EU (that is, from 1 May 2004), although it will enter into force from 8 October 2004, as in all other EU member states. The Directive must be transposed by the same date as the Regulation.

The Act on the SE, except for transposition of the Directive, represents a “supplementary” legal arrangement in relation to the Regulation. This means that the Act does not regulate those matters directly regulated by the Regulation, but rather solves either the issues which are expressly authorised for treatment by “national law” or ensures, by amending and supplementing national law, the coincidence of Slovak law with the different articles of the Regulation.

Under Slovak legislation, the legal framework regarding the legal status of a European company (SE) shall be applied with the following order of authority:

  • the provisions of the EU Regulation;
  • the Statute for a European company (SE) as regards the issues left by the Regulation for regulation by the member state through the said Statute;
  • provisions of the Law on the SE;
  • provisions of company law applying to public limited liability companies on the issues not regulated in the previous three instruments;
  • the company statutes on issues not regulated in any of the above.

Technically, it would be possible to integrate the European company directly into company law, in a section regulating companies formed under Slovak law. However, given the special character of the SE, its direct legislative antecedents in EU law and its specific issues concerning regulation of the status and management of SEs, the Slovak Republic proceeded to prepare a separate law.
The aim of the Slovak legislator is to introduce as few limitations and restrictions as possible concerning the formation of an SE and its operations on the territory of the Slovak Republic (with a view to both taxation and investment, as well as employment). The relevant law will therefore apply a regime of “minimalist” regulation.

The Act is divided into two sections:

(i) section one of the Act regulates the creation of an SE, its legal status and its management;

(ii) section two regulates employee involvement in an SE, dealing with particular provisions of the Directive on employee involvement.

In the territory of the Slovak Republic, a European company is considered a legal entity under company law. It should have a similar status to a Slovak company. In its main features a European company corresponds mostly to a classic public limited liability company formed under Slovak law. This means that those matters not regulated by the Regulation, referred to in company statutes or in this Act will be subsequently regulated by provisions of company law regulating the status and activities of a public limited liability company.

The second section of the Act regulates employee involvement in an SE and confers a right to such involvement. The right to information and consultation is applied to those matters exclusively concerning the SE as a whole, its subsidiaries or organisational components in the territory of another Member State or which exceed the powers of the decision-making organs in a single member state.

When defining the contents and exercise of the right of employees to participate in an SE priority is given to an agreement on the manner and scope of employee involvement in an SE.

In accordance with the Directive, the number and composition of members of a special negotiating body is regulated, as well as the duration of negotiations concerning employee involvement in an SE, the procedure governing the election or appointment of members in the employees’ representative body, and so on.

In addition, the Act regulates such important – particularly from the trade union point of view – issues as the following:

  • time off for members of the representative body to receive the training needed to carry out their duties with regard to wage issues;
  • the opportunity to call on experts of its own choice when serious matters are to be discussed;
  • obligation of the SE to ensure conditions for the adequate functioning of the representative body (financial, material, organisational);
  • protection of employees’ representatives with the same scope as that provided for employees’ representatives by national legislation and/or practice in their country of employment.

The Act regulates employee involvement in detail, as follows:

  • The contents of the right to information, that is, what kind of information and how frequently the SE is obliged to provide it to the employees’ representative body. Also, it stipulates the obligation of the employees` representative body to inform the employees on the
    outcome of consultations.
  • Cases and conditions under which the management may refuse to provide information (for example, if the disclosure of such information would seriously harm the functioning of the SE). The designation of information as confidential is also regulated, including what the employee side can do if it disagrees with the management’s decision to maintain confidentiality.
  • The contents of the right to consultation, including detailed regulation of procedures in situations in which an appropriate body of the SE decides to act contrary to the employees’ representative body or its select committee.
  • The right of employees to influence the composition of company bodies.

The Trade Union Point of View

  • KOZ SR fully supports transposition of the Directive into Slovak law.
  • KOZ SR regrets the fact that the draft law was not prepared in cooperation with the social partners and was not subject to amendment and discussion in the CESA.
  • KOZ SR makes no comment on the contents of the Act.
  • More positively, KOZ SR regards the Act as an instrument enabling deeper employee involvement.
  • The Act backs up the provisions of the Labour Code which regulate the position and competencies of employees’ representatives, especially trade union organisations.

The Employers’ Point of View

  • Adoption of the Act is a necessity, particularly given the Slovak Republic’s EU membership;
  • Although the Act principally transposes the text of the Directive, it was a mistake to prepare it without the involvement of the social partners on a tripartite basis.
  • The employers make no comment on the contents of the Act.
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