Chapter 5: Circumvention of Board Level Representation of Employees

Abstract

Board level representation of employees (BLER) may be circumvented by different strategies. Possible escape routes are the incorporation as a European Company, the cross-border merger or the creation of a foreign legal entity. The paper argues that these strategies are not abusive as such. A European Member State may impose BLER rules on foreign legal entitites as long as they comply with the proportionality test applied by the Court of Justice with regard to freedom of establishment. As far as the European Company and cross-border mergers are concerned, EU secondary law caters for the protection of employee rights. The recently adopted Company Law Package introduces new rules for cross-border mergers, conversions and divisions. It is argued that the Member State of origin has the right to refuse the issuance of the pre-conversion, pre-merger or pre-division certificate in cases where the operation aims at circumventing national standards of employee participation.