Frankfurt – The United Services Union (ver.di) and IG Metall welcome today’s positive decision by the European Court of Justice (ECJ) on the composition of supervisory boards. According to this, the participation of trade union representatives in the supervisory board is subject to national law even after the change in legal form. The European Court of Justice thus confirms the view of the trade unions and the Federal Labor Court (BAG), which formulated the question referred.
Christiane Benner, Deputy Chairwoman of IG Metall, explains: “Co-determination is a valuable asset. It is good that European case law has now confirmed that there are limits to circumventing corporate co-determination when changing the legal form to an SE. The decision underscores the importance of union seats on supervisory boards. Companies should heed the signals and work with unions for everyone’s benefit, not against them.”
Christoph Meister, member of the ver.di federal executive board: “Today’s decision sends a clear signal against ongoing strategies of abuse through the formal transformation of companies. The Court makes it clear that the seat and vote of employees and their unions on the supervisory board must be preserved even if companies change their legal form.”
The background to the proceedings by the German trade unions IG Metall and ver.di against the software company SAP SE is that the company had converted from a stock corporation under German law into an SE in 2014. A special negotiating body for employees (BVG) and the company management negotiate how co-determination will be structured in the future company, i.e. the SE. At SAP, the BVG and the company had agreed, among other things, that in future the independent ballot for the representatives of the unions and thus the participation guarantee for the unions on the supervisory board could be omitted.
ver.di and IG Metall considered the corresponding provisions in the agreement to be void. The Federal Labor Court had agreed with the content of the arguments of the two unions. In his opinion, according to the German SE Participation Act (SEBG), the employee representatives on the supervisory board proposed by the unions in the separate election process are among the defining elements of corporate co-determination in Germany, which is why secure seats and separate elections for union representatives in the Supervisory Board must also be ensured in the SE founded by conversion. It is a matter for the national law of the Member States to define the essential elements of co-determination. The ECJ confirmed precisely this view with its decision.
This is also an important signal to politicians. Because an SE must not be misused to withdraw or withhold participation rights from employees. However, this is increasingly the case. The consequences resulting from the transformation of the legal form of companies have therefore rightly been identified as a field of action in the traffic light coalition agreement. IG Metall and ver.di see corresponding changes in the SEBG as a decisive factor in preventing co-determination from being undermined.