EUROPEAN COMPANY

A company established under the laws of the European Union, having its own legal framework, and operating as a single entity throughout the EU.

"In the longer term Elcoteq's aim as an SE is to increase efficiency and reduce administrative costs. An SE will be able to merge its subsidiaries throughout the 28 countries of the European Economic Area (EEA), generating savings in administrative costs and making decision-making processes faster and more efficient. The SE form of a company will also make it more flexible to implement cross-border mergers, acquisitions and divestments, and registration of the company in a new country. […] The only change in the position of the company's personnel will apply to employee involvement, which in the future will be arranged at the European level, in addition to the national level."
(Elcoteq, Elcoteq Converts into a European Company - the New Company Name is Elcoteq SE, visited 2010-10-19)

The European Company is known by its Latin name of ‘Societas Europaea' or SE.

The regulation on the Statute for a European Company allows "companies incorporated in different Member States to merge or form a holding company or joint subsidiary, while avoiding the legal and practical constraints arising from the existence of […] different legal systems."
(Europa, Statute for a European Company, 2007, visited 2009-10-19)

"In 2001, the Union formally adopted the regulation on the Statute for a European Company and the associated directive on employee participation in European Companies. This legislation entered into force in 2004 after some 30 years of discussion. It allows companies to cut administrative costs and provides them with a legal structure suitable for the common market, avoiding the legal and practical constraints arising from 25 different legal systems."
(Europa, Glossary, visited 2009-10-10)

"The registered office of the SE designated in the statutes must be the place where it has its central administration, that is to say its true centre of operations. The SE can easily transfer its registered office within the Community - as is the case at present - without dissolving the company in one Member State in order to form a new one in another Member State."
(Europa, Statute for a European Company, 2007, visited 2009-10-19)

Employee Participation

The Council Directive that complements the Statute for a European company with regard to the involvement of employees in the European company defines employee participation as participation in the supervision and strategic development of the company rather than participation in day-to-day decisions. Several models of participation are possible, but the general meeting may not approve the formation of an SE unless one of the models of participation defined in the Directive has been chosen.

In the first model, the employees form part of the supervisory board or the administrative board, as the case may be; in the second model, the employees are represented by a separate body; and finally, in other models to be agreed upon by the management or administrative boards of the founding companies and the employees or their representatives in those companies, the level of information and consultation is the same as in the case of the second model. The employees' representatives must also be provided with financial and material resources and other facilities to enable them to perform their duties properly.
(adapted from Europa, Statute for a European Company, 2007, visited 2009-10-10)

The Directive on employee participation aims at developing European social dialogue, but does not involve the creation of European Works Councils or EWCs. These involve companies with 1,000 or more workers, and at least 150 employees in each of two or more EU Member States, obliging them "to bring together workers' representatives (usually trade unionists) from all the EU Member States the company operates in."
(European Trade Union Confederation (ETUC), European Works Councils (EWCs), 2008, visited 2009-10-19)

Towards European Trade Unions?

The transnational cooperation of workers and trade union representatives in European Works Councils (EWCs) and European Companies Works Council (SE-WCs) forms an important part of the European trade union strategy and the European trade union movement. EWCs and SE-WCs offer an additional structure for trade union actions and alliances. They can play an important role in protecting workers' rights and bringing dialogue and consultation to multinational companies.

"For UNI-Europa, monitoring and guiding existing EWCs and SE-WCs as well as setting up new ones remain a key task. By now, there are around 170 of such bodies set up within the scope of UNI-Europa and more are on the way."
(UNI-Europa, EWCs and SE, visited 2009-10-29)

The European Company must not be confused with the eurocompany, a term invented by Paul Marginson to refer to a European multinational company.
(Marginson, P., "The Eurocompany and Euro Industrial Relations," European Journal of Industrial Relations, Vol. 6:1, 2000, pp. 9-34)