This report provides a brief overview of Swedish implementation of the directive on employee involvement in SEs (prop. 2003/04:122). The SE directive will be implemented by a special law, the Act on employee involvement in SEs. The new act is accompanied by changes in the Act on private-sector employee board representation of 1972. Transposition of the directive on employee involvement in SEs, and other complementary SE legislation, has now been completed in Sweden. Three separate proposals on SEs were approved by parliament in May. The legislative proposal on employee involvement (prop. 2003/04:122), together with a legislative proposal complementing the company law provisions in the SE regulation (prop. 2003/04:112) were presented to the Swedish parliament on 11 March 2004 and approved on 13 May. The third government proposal – on taxation of SEs (prop. 2003/04:134) – was presented to parliament in April and approved on 28 May. All three proposals will enter into force as legislation on 8 October 2004.

The proposal on employee involvement in SEs passed through parliament without discussion, while the proposal on complementary SE legislation caused some debate regarding the conditions of transferring an SE’s corporate seat to another Member State. The government proposal states that the tax authorities can, under certain conditions, hinder such a transfer. Not all MPs found this acceptable and asked for amendments to reduce the influence of the tax authorities on the creation of SEs.

The legislative proposal containing the new Act on employee involvement in SEs is largely based on the proposals of the inquiry committee (SOU 2003: 64) on transposition into national Swedish law of the Directive on employee involvement in an SE.

The act on employee involvement in SEs – in brief

The government decided against transposing the directive by making changes in existing law on workers’ involvement: in those parts of the directive where national interpretation is possible the underlying aim of the act is to adhere to existing law as far as possible.

The Act lays down that the special negotiating body is to negotiate arrangements for employee involvement with the employers. In Sweden, seats in the special negotiating body will be allocated among the employees of participating companies, subsidiaries and establishments, giving priority to the first. The principle of distribution is one seat for each company, with any extra seats being distributed on the basis of number of employees in a given company.

The Act lays down that selection of members of the special negotiating body shall take place according to the Swedish model of trade union representation in the workplace. If there is a collective agreement, members are appointed by the trade union organisations party to that agreement. If these organisations cannot agree, the Act says that selection of employee members in accordance with the Board Representation Act should form the basis of the procedure. If there is no collective agreement at any of the workplaces involved, the local employee organisation that represents the most employees in the participating companies, subsidiaries and establishments shall appoint the members of the special negotiating body.

The Act does not address what rules should apply in the event of a failure to establish a special negotiating body. The directive does not resolve this issue either. The issue also separated the social-partner delegates on the inquiry committee. The government declares in its legislative proposal that it does not believe that the employees are intended to have a veto on the creation of an SE; however, it does not think that the issue should be solved at national level, leaving the matter to be dealt with either by the Commission’s working group or in conjunction with a review of the directive. Nevertheless, the government also states in the legislative proposal that national measures might be considered if needed.

If the parties do not reach agreement, according to the Act the reference provisions on information and consultation shall apply on condition that the special negotiating body does not decide to relinquish employee involvement. Application of the reference provisions on participation further depend on various conditions related to the way the SE was established.

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