The United Services Union (ver.di) and IG Metall welcome the positive statements made by representatives of the European Commission, the Grand Duchy of Luxembourg, and the Federal Republic of Germany before the European Court of Justice (ECJ). According to these statements, the participation of union representatives on supervisory boards remains subject to national law even after a change in legal form. This follows a referral of this legal question by the Federal Labor Court (BAG) to the European Court of Justice.
Christiane Benner, Second Chair of IG Metall, sees this as confirmation of the unions’ position: “This is a very positive signal for workers’ rights and co-determination as a whole! However, this can only be a start; in the long term, further adjustments are needed here.”
Christoph Meister, a member of the ver.di Federal Executive Board: “The arguments presented before the Court clearly demonstrated that the role of employees and trade unions on the supervisory board must be preserved even when companies change their legal form. This is welcome news and would ultimately strengthen co-determination.”
The background to this is a legal action brought by the German unions IG Metall and ver.di against the software company SAP SE. In 2014, the German company converted from a stock corporation under German law into an SE. In such a conversion, a special negotiating body of employees (BVG) negotiates with company management to determine 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 the future, the separate election of union representatives—and thus the guarantee of union representation on the supervisory board—could be eliminated.
ver.di and IG Metall consider the relevant provisions in the agreement to be null and void. The Federal Labor Court has essentially concurred with the arguments put forward by the two unions. In its view, the employee representatives on the Supervisory Board nominated by the unions in a separate election procedure constitute, under the German SE Participation Act, one of the defining elements of corporate co-determination in Germany; therefore, guaranteed seats and separate elections for union representatives on the Supervisory Board must also be ensured in the SE established through conversion. It is a matter for the national law of the Member States to define the essential elements of co-determination.
Following the oral arguments, the Advocate General of the CJEU responsible for the case, J. Richard de la Tour, will deliver his Opinion on April 28, 2022. Only then will the Court issue its judgment. This typically takes 6 to 9 months from the date of the oral arguments.
Regardless of the present proceedings, an SE must not be misused to deprive employees of their participation rights or to withhold such rights from them. However, this is increasingly the case. The consequences arising from the conversion of corporate legal forms are therefore rightly identified as an area for action in the coalition agreement of the “traffic light” coalition government. IG Metall and ver.di view changes to the SE Participation Act as a decisive factor in preventing the circumvention of co-determination.
Further information and press photos of Christiane Benner
