Activities of Csaba SÓGOR related to 2018/0114(COD)
Shadow opinions (1)
OPINION on the proposal for a directive of the European Parliament and of the Council amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions
Amendments (36)
Amendment 17 #
Proposal for a directive
Recital -1 (new)
Recital -1 (new)
(-1) Companies play a crucial role in promoting economic growth, creating jobs and attracting investment in the European Union. They help deliver greater economic as well as social value for society at large. To better achieve their potential they should be able to take advantage of the possibilities the Single Market can offer them to develop and grow across national borders. Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of limited liability companies has had a profound impact on the cross border merger activity between Member States by providing a unified general framework for mergers with simplified procedures involving lower costs and shorter times. These advantages should be carried over to the field of cross-border conversions and divisions, too.
Amendment 29 #
Proposal for a directive
Recital 7
Recital 7
(7) The right to convert an existing company formed in a Member State into a company governed by another Member State may in certain circumstances be used for abusive purposes such as for the circumvention of labour standards, social security payments, tax obligations, creditors', minority shareholders' rights or rules on employees participation. In order to combat such possible abuses, a general principle of Union law, Member States are required to ensure that companies do not use the cross-border conversion procedure in order to create artificial arrangements aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or members. In so far as it constitutes a derogation from a fundamental freedom, the fight against abuses must be interpreted strictly and be based on an individual assessment of all relevant circumstances. A, after an examination of specific cases and having regard to all relevant facts and circumstances, are required to ensure that companies do not use the cross-border conversion through abuse of law or fraudulent act. In so far as it constitutes a derogation from a fundamental freedom, the fight against abuses must be interpreted strictly and be based on an individual assessment of all relevant circumstances. In its judgement on the Polbud1a case, the European Court of Justice reconfirmed its previous jurisprudence whereby the fact that either the registered office or real head office of a company was established in accordance with the legislation of a Member State for the purpose of enjoying the benefit of more favourable legislation does not, in itself, constitute abuse. Therefore a procedural and substantive framework which describes the margin of discretion and allows for the diversity of approach by Member States whilst at the same time setting out the requirements to streamline the actions to be taken by national authorities to fight abuses in conformity with Union law should be laid down. __________________ 1a Polbud – Wykonawstwo, Case C- 106/16, ECLI:EU:C:2017:804.
Amendment 42 #
Proposal for a directive
Recital 12
Recital 12
(12) In order to provide information to its employees, the company carrying out the cross-border conversion should prepare a report explaining the implications of the proposed cross-border conversion for employees. In order to avoid duplications, companies may decide to combine this report with the report addressed to the members. The report should explain in particular the implications of the proposed cross-border conversion on the safeguarding of the jobs of the employees, whether there would be any material change in the employment relationships and the locations of the companies’ places of business and how each of these factors would relate to any subsidiaries of the company. This requirement should not however apply where the only employees of the company are in its administrative organ. The provision of the report should be without prejudice to the applicable information and consultation proceedings instituted at national level following the implementation of Directive 2002/14/EC of the European Parliament and of the Council43 or Directive 2009/38/EC of the European Parliament and of the Council44 while not causing any duplication of reporting requirements. __________________ 43 Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community (OJ L 80, 23.3.2002, p. 29). 44 Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (Recast) (OJ L 122, 16.5.2009, p. 28).
Amendment 52 #
Proposal for a directive
Recital 19
Recital 19
(19) In order to ensure that employee participation is not unduly prejudiced as a result of the cross-border conversion, where the company carrying out the cross- border conversion is operating under an employee participation system in the departure Member State, the company should be obliged to take a legal form allowing for the exercise of such participation, including through the presence of representatives of the employees in the appropriate management or supervisory organ of the company in the destination Member State. Moreover, in such a case, a bona fide negotiation between the company and its employees should take place, along the lines of the procedure provided for in Directive 2001/86/EC, with a view to finding an amicable solution reconciling the right of the company to carry out a cross-border conversion with the employees' rights of participation. As a result of those negotiations, either a bespoke and agreed solution or, in the absence of an agreement, the application of standard rules as set out in the Annex to Directive 2001/86/EC should apply, mutatis mutandis. In order to protect either the agreed solution or the application of those standard rules, the company should not be able to remove the participation rights through carrying out subsequent domestic or cross-border conversion, merger or division within threewo years.
Amendment 60 #
Proposal for a directive
Recital 20
Recital 20
(20) In order to prevent the circumvention of employee participation rights by means of a cross-border conversion, the company carrying out a conversion which is registered in the Member State which provides for the employee participation rights, should not be able to perform a cross-border conversion without first entering into negotiations with its employees or their representatives when the average number of employees employed by that company is equivalent to four fifths of the national threshold for triggering such employee participationxceeds 500.
Amendment 61 #
Proposal for a directive
Recital 22
Recital 22
(22) The issue of the pre-conversion certificate by the departure Member State should be scrutinised to ensure the legality of the cross-border conversion of the company. The competent authority of the departure Member State should decide on the issue of the pre-conversion certificate within one month of the application by the company, unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or unduly prejudicing the legal or contractual rights of employees, creditors or membersintention to abuse law or to commit a fraudulent act. In such a case, the competent authority should carry out an in- depth assessment. However, this in-depth assessment should not be carried out systematically, but it should be conducted on a case-by-case basis, where there are serious concerns as to the existence of an artificial arrangement. For their assessment, competent authorities should take into account at least a number of factors laid down in this Directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation. In order not to burden companies with an overly lengthy procedure, this in-depth assessment should in any event be concluded within two months of informing the company that the in-depth assessment will be carried out.
Amendment 63 #
Proposal for a directive
Recital 26
Recital 26
(26) The evaluation of the implementation of the cross-border merger rules in Member States has shown that the number of cross-border mergers in the Union has significantly increased. However, this evaluation has also revealed certain shortcomings in relation specifically to creditor protection and shareholder protection as well as to the lack of simplified procedures which impede the full effectiveness and efficiency of those cross-border merger rules. While no available data could conclusively establish that the employee participation procedure was inefficient, the evaluation revealed that companies considered it too complex and leading to unnecessary costs and delays within the merger.
Amendment 67 #
Proposal for a directive
Recital 28
Recital 28
(28) In order to further enhance the existing cross-border merger procedure, it is necessary to simplify those merger rules, where appropriate, whilst at the same time ensuring that stakhareholders, and in particularcreditors and employees, are adequately protected. Therefore, the existing cross- border merger rules should be modified in order to oblige the management or administrative organs of the merging companies to prepare separate reports detailing the legal and economic aspects of the cross-border merger for both members and for employees. The obligation on the management or administrative organ of the company to prepare the report for the members may however be waived, where those members are already informed about legal and economic aspects of the proposed merger. However, the report prepared for employees may only be waived where the merging companies and their subsidiaries do not have any employees other than those who form part of the management or administrative organ.
Amendment 69 #
Proposal for a directive
Recital 29
Recital 29
(29) Furthermore, in order to enhance the protection afforded to the employees of the merging company or companies, employees or their representatives may provide their opinion on the company report setting out the implications of the cross-border merger for them. The provision of the report should be without prejudice to the applicable information and consultation proceedings instituted at national level following the implementation of Council Directive 2001/23/EC48 , Directive 2002/14/EC or Directive 2009/38/EC. In order to avoid duplications, companies may decide to combine this report with the report detailing the legal and economic aspects of the cross-border merger. __________________ 48 Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses (OJ L 82, 22.3.2001, p. 16).
Amendment 74 #
Proposal for a directive
Recital 40
Recital 40
(40) The right of companies to carry out a cross-border division may in certain circumstances be used for abusive purposes such as for the circumvention of labour standards, social security payments, tax obligations, creditors' or members' rights or rules on employees participation. In order to combat such abuses, as a general principle of Union law, Member States are required to ensure that companies do not use the cross-border division procedure in order to create artificial arrangements aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or membersabuse the law or to commit a fraudulent act. In so far as it constitutes a derogation from a fundamental freedom, the fight against abuses must be interpreted strictly and must be based on an individual assessment of all relevant circumstances. A procedural and substantive framework which describes the margin of discretion and allows for the diversity of approaches by Member States whilst at the same time setting out the requirements to streamline the actions to be taken by national authorities to fight abuses in conformity with Union law should be laid down.
Amendment 78 #
Proposal for a directive
Recital 43
Recital 43
(43) In order to provide information to its members, the company being divided should prepare a report. The report should explain and substantiate the legal and economic aspects of the proposed cross- border division, in particular explaining the implications of the cross-border division for members with regard to the future business of the company and the management organs’ strategic plan. It should also include explanations about the exchange ratio, where applicable, the criteria to determine the allocation of shares and potential remedies available to members, where they do not agree with the decision to carry out a cross-border division. This report should also be made available to the employees of the company.
Amendment 82 #
Proposal for a directive
Recital 44
Recital 44
(44) In order to provide information its employees, the company being divided should prepare a report explaining the implications of the proposed cross-border division for employees. In order to avoid duplications, companies may decide to combine this report with the report addressed to members. The report should explain in particular the implications of the proposed cross-border division on the safeguarding of the jobs of the employees, whether there would be any material change in the conditions of employment and the locations of the companies’ places of business, and how each of these factors would relate to any subsidiaries of the company. The provision of the report should be without prejudice to the applicable information and consultation proceedings instituted at national level following the implementation of Directives 2001/23/EC, 2002/14/EC or 2009/38/EC, while not causing any duplication of reporting requirements.
Amendment 85 #
Proposal for a directive
Recital 52
Recital 52
(52) The issue of the pre-division certificate by the Member State of the company being divided should be scrutinised to ensure the legality of the cross-border division. The competent authority should decide whether to issue a pre-division certificate within one month of the application by the company has been submitted, unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or membersintention to abuse the law or to commit a fraudulent act. In such a case, the competent authority should carry out an in-depth assessment. However, this in-depth assessment should not be carried out systematically but it should be conducted on a case-by-case basis where there are serious concerns as to the existence of an artificial arrangement. For their assessment, competent authorities should take into account at least a number of factors laid down in this Directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation. In order not to burden companies with an overly lengthy procedure, this in-depth assessment should in any event be concluded within two months informing the company that the in-depth assessment will be carried out.
Amendment 90 #
Proposal for a directive
Recital 55
Recital 55
(55) In order to ensure that employee participation is not unduly prejudiced as a result of the cross-border division where the company carrying out the cross-border division is operating under an employee participation system, the companies resulting from the division should be obliged to take a legal form allowing for the exercise of participation, including through the presence of representatives of the employees in the appropriate management or supervisory organs of the companies. Moreover, in such a case, a bona fide negotiation between the company and its employees should take place, along the lines of the procedure provided for in Directive 2001/86/EC, with a view to finding an amicable solution reconciling the right of the company to carry out a cross-border division with the employees'' rights of participation. As a result of those negotiations, either a bespoke and agreed solution or, in the absence of an agreement, the application of standard rules as set out in the Annex to Directive 2001/86/EC should apply mutatis mutandis. In order to protect either the agreed solution or the application of those standard rules, the company should not be able to remove the participation rights through carrying out subsequent domestic or cross-border conversions, mergers or divisions within 32 years.
Amendment 95 #
Proposal for a directive
Recital 56
Recital 56
(56) In order to prevent the circumvention of the employee participation rights by means of a cross- border division, the company carrying out a division which is registered in the Member State which provides for the employee participation rights, should not be able to perform a cross-border division without first entering into negotiations with its employees or their representatives when the average number of employees employed by that company is equivalent to four fifths of the national threshold for triggering such employee participationexceeds 500.
Amendment 112 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) 2017/1132
Article 86 c – paragraph 3
Article 86 c – paragraph 3
3. Member States shall ensure that the competent authority of the departure Member State shall not authorise the cross- border conversion where it determines, after an examination of the specific case and having regard to all relevant facts and circumstances, that it constitutes an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or minority membersbuse of law or a fraudulent act.
Amendment 186 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) 2017/1132
Article 86 f – paragraph 5 a (new)
Article 86 f – paragraph 5 a (new)
5a. In order to avoid duplications, companies may decide to combine the report referred to in paragraph 1 with the report referred to in Article 86e.
Amendment 187 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) 2017/1132
Article 86 f – paragraph 6
Article 86 f – paragraph 6
6. Paragraphs 1 to 6 are without prejudice to the applicable information and consultation rights and proceedings instituted at national level following the transposition of Directives 2002/14/EC or 2009/38/EC, while not causing any duplication of reporting requirements.
Amendment 206 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) 2017/1132
Article 86 g – paragraph 6
Article 86 g – paragraph 6
6. Member States shall exempt 'micro' and 'small, small and medium sized enterprises', as defined in Commission Recommendation 2003/361/EC (**) from the provisions of this Article.
Amendment 228 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) 2017/1132
Article 86l – paragraph 2 – introductory part
Article 86l – paragraph 2 – introductory part
2. However, the rules in force concerning employee participation, if any, in the destination Member State shall not apply, where the company carrying out the conversion has, in the six months prior to the publication of the draft terms of the cross-border conversion as referred to in Article 86d of this Directive, an average number of employees equivalent to four fifths of the applicable threshold, laid down in the law of the departure Member State, which triggers the participation of employees within the meaning of point (k) of Article 2 of Directive 2001/86/ECxceeds 500, or where the national law of the destination Member State does not:
Amendment 250 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) 2017/1132
Article 86l – paragraph 4 – point –a (new)
Article 86l – paragraph 4 – point –a (new)
(-a) shall confer on the company the right to choose without any prior negotiation to be directly subject to the standard rules for participation referred to in point (a) part 3 of the Annex, as laid down by the legislation of the destination Member State and to abide by those rules from the date of registration;
Amendment 259 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) 2017/1132
Article 86l – paragraph 4 – point c
Article 86l – paragraph 4 – point c
Amendment 270 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) 2017/1132
Article 86l – paragraph 7
Article 86l – paragraph 7
7. Where the converted company is operating under an employee participation system, that company shall be obliged to take measures to ensure that employees' participation rights are protected in the event of any subsequent cross-border or domestic merger, division or conversion for a period of threewo years after the cross- border conversion has taken effect, by applying mutatis mutandis the rules laid down in paragraphs 1 to 6.
Amendment 272 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive (EU) 2017/1132
Article 86l – paragraph 8
Article 86l – paragraph 8
8. A company shall communicate to its employees the outcome of the negotiations concerning employee participwhether it chooses to apply standard rules for participation referred to in point (a) part 3 of the Annex or whether it enters into negotiations within the special negotiating body. In the latter case the company shall communicate to its employees the outcome of the negotiations without undue delay.
Amendment 311 #
Proposal for a directive
Article 1 – paragraph 1 – point 9
Article 1 – paragraph 1 – point 9
Directive (EU) 2017/1132
Article 124 – Paragraph 3
Article 124 – Paragraph 3
3. The report shall be made available, at least electronically, to the members of each of the merging companies not less than onetwo months before the date of the general meeting referred to in Article 126. The report shall also be made similarly available to the representatives of the employees of each of the merging companies, or where there are no such representatives, to the employees themselves. However, where the approval of the merger is not required by general meeting of the acquiring company in accordance with Article 126(3), the report shall be made available, at least one month before the date of the general meeting of the other merging company or companies.
Amendment 332 #
Proposal for a directive
Article 1 – paragraph 1 – point 10
Article 1 – paragraph 1 – point 10
Directive (EU) 2017/1132
Article 124a – paragraph 5 a (new)
Article 124a – paragraph 5 a (new)
5a. In order to avoid duplications, the company may decide to combine the report referred to in paragraph 1 with the report referred to in Article 124.
Amendment 333 #
Proposal for a directive
Article 1 – paragraph 1 – point 10
Article 1 – paragraph 1 – point 10
Directive (EU) 2017/1132
Article 124a – paragraph 6
Article 124a – paragraph 6
6. The submission of the report is without prejudice to the applicable information and consultation rights and proceedings instituted at national level following the implementation of Directives 2001/23/EC, 2002/14/EC or 2009/38/EC, while not causing any duplication of reporting requirements.;
Amendment 350 #
Proposal for a directive
Article 1 – paragraph 1 – point 18 – point a
Article 1 – paragraph 1 – point 18 – point a
Directive (EU) 2017/1132
Article 133 – paragraph 7
Article 133 – paragraph 7
7. Where the company resulting from the cross-border merger is operating under an employee participation system, that company shall be obliged to take measures to ensure that employees' participation rights are protected in the event of any subsequent cross-border or domestic mergers, divisions or conversions for a period of threewo years after the cross-border merger has taken effect, by applying mutatis mutandis the rules laid down in paragraphs 1 to 6.
Amendment 364 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) 2017/1132
Article 160d – paragraph 3
Article 160d – paragraph 3
3. The Member State of the company being divided shall ensure that the competent authority shall not authorise the division when it determines, after an examination of the specific case and having regard to all relevant facts and circumstances, that it constitutes an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or membersbuse of law or a fraudulent act.
Amendment 398 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) 2017/1132
Article 160h – paragraph 5a (new)
Article 160h – paragraph 5a (new)
5 a. In order to avoid duplications, the company may decide to combine the report referred to in paragraph 1 with the report referred to in Article 160g.
Amendment 399 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) 2017/1132
Article 160h – paragraph 6
Article 160h – paragraph 6
6. Paragraphs 1 to 5 are without prejudice to the applicable information and consultation rights and proceedings instituted at national level following the implementation of Directives 2001/23/EC, 2002/14/EC or 2009/38/EC, while not causing any duplication of reporting requirements.
Amendment 415 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) 2017/1132
Article 160n – paragraph 2
Article 160n – paragraph 2
2. However, the rules in force concerning employee participation, if any, in the Member State where the company resulting from the cross-border division has its registered office shall not apply, where the company being divided, in the six months prior to the publication of the draft terms of the cross-border division as referred to in Article 160e of this Directive, has an average number of 500 employees equivalent to four fifths of the applicable threshold, laid down in the law of the Member State of the company being divided, which triggers the participation of employees within the meaning of point (k) of Article 2 of Directive 2001/86/EC, or where the national law applicable to each of the recipient companies does not:
Amendment 429 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) 2017/1132
Article 160n – paragraph 4 – point –a (new)
Article 160n – paragraph 4 – point –a (new)
(-a) shall confer on the relevant organs of the recipient companies the right to choose without any prior negotiation to be directly subject to standard rules for participation referred to in point (a) Part 3 of the Annex, as laid down by the legislation of the Member State in which each company resulting from the cross- border division is to have its registered office, and to abide by those rules from the date of registration;
Amendment 436 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) 2017/1132
Article 160n – paragraph 4 – point c
Article 160n – paragraph 4 – point c
Amendment 442 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) 2017/1132
Article 160n – paragraph 7
Article 160n – paragraph 7
7. Where the company resulting from the cross-border division is operating under an employee participation system, that company shall be obliged to take measures to ensure that employees' participation rights are protected in the event of any subsequent cross-border or domestic merger, division or conversion for a period of threewo years after the cross-border division has taken effect, by applying, mutatis mutandis, the rules laid down in paragraphs 1 to 6.
Amendment 445 #
Proposal for a directive
Article 1 – paragraph 1 – point 20
Article 1 – paragraph 1 – point 20
Directive (EU) 2017/1132
Article 160n – paragraph 8
Article 160n – paragraph 8
8. A company shall communicate to its employees the outcome of the negotiations concerning employee participwhether it chooses to apply standard rules for participation referred to in point (a) Part 3 of the Annex or whether it enters into negotiations within the special negotiating body. In the latter case the company shall communicate to its employees the outcome of the negotiations without undue delay.