Corporate co-determination in the Societas Europaea (SE)

No danger for German co-determination

As in many things, Europe is by no means united on the issue of co-determination. It is much more important in Germany than in most other Member States. But what happens to it if a German company decides in favour of the legal form of a Societas Europaea (SE), i.e. a European stock corporation?

An expert opinion by Professor Christoph Teichmann, who is an expert in both German and European commercial and company law, deals with the question of whether the rights of German employees are still sufficiently protected.

He begins by describing the different traditions of co-determination, then examines the European and German regulatory frameworks and finally looks in detail at what is known as the freeze effect.

This is repeatedly criticised. It refers to the situation that arises when the workforce grows after the company is founded. This is because although the degree of co-determination is taken into account by the company at this point, it does not change thereafter.

The background to the study is the need for action described by Germany’s coalition government in its coalition agreement. Teichmann explores European and national reform options in detail.

He does not see a fundamental threat to German co-determination, but suggests, among other things, that the offence of abuse in the context of the freeze effect should be defined in more detail. However, the ultimate interpretation of the concept of abuse is the responsibility of the European Court of Justice.