EU: Directive 2019/2121 of 27 November 2019 amending Directive 2017/1132 as regards cross-border conversions, mergers and divisions

The Directive stipulates that the company carrying out the cross-border operation should prepare a report to “provide information to its […] employees”. This document should “explain and justify the legal and economic aspects of the proposed cross-border operation and the implications of the proposed cross-border operation for employees”.
The employees themselves or their representatives should be able to give their opinion on this report. Recital no. 13 of the Directive states that the report should explain “whether there would be any material change to the employment conditions laid down by law, to collective agreements or to transnational company agreements, and in the locations of the company’s places of business, such as the location of the head office”. Recital 29 states that “In order to conduct an analysis of the report for employees, a company carrying out a cross-border operation should provide employee representatives with the resources necessary to enable them to exercise the rights arising from this Directive in an appropriate manner”. As regards the question of circumventing employee participation rights by means of carrying out a cross-border operation, the Directive stipulates that the operation should “ensure that employee participation is not unduly prejudiced”. Where the company carrying out the cross-border operation “has implemented an employee participation system, the company or companies resulting from the cross-border operation should be obliged to take a legal form allowing for the exercise of such participation rights, including through the presence of representatives of the employees in the appropriate management or supervisory body of the company or companies.” The Directive then proposes mechanisms for negotiating employee participation, and specifies the cases in which the company is exempt from the requirement to retain a form of participation.