Revised EU Rules Will Impact Participating Companies, Employees

Highlights

The consultation and participation provisions will enable employee representatives to assess the implications of proposed business changes on the workforce, and assure consultation and participation rights in the resulting organization, where required.

Report to employees prior to a cross-border operation. In most cases, the company carrying out the cross-border operation should prepare a report “to explain and justify” the legal and economic aspects of the proposed cross-border operation and the anticipated implications for employees. Specifically, the report should set out:

The implications of the cross-border operation for the company’s future business, including its subsidiaries
An explanation of the proposed cross-border operation on the employment situation and any material changes that would be made to employment conditions, collective agreements or to transnational company agreements
Remedies available to employees, especially information about their right to exit the company
Likely changes to work, wages and salaries, location of specific jobs and expected consequences for the employees occupying those roles, company-level social dialogue, arrangements for board-level employee representation (where applicable), and the impact on any company subsidiaries

Employee representation. The rights of employees to be represented on information and consultation bodies (for example, works councils) and in employee participation arrangements (for example, supervisory boards) in the converted company.

Impact on employee consultation and participation rights. The directive requires the commission to evaluate the directive, including its impact on employee participation and consultation rights, by 2026.