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Compliance with the “before/after” principle : In a ruling on 18 August, the German Federal Employment Court referred a question to the EU Court of Justice for a preliminary ruling, concerning the right of the IG-Metall and Ver.di trade unions to each appoint a trade union official from outside the company, to join the employee representatives on the supervisory board of the software group SAP SE. According to the Federal Court, where a European company (SE) is created by converting a limited company that is subject to joint management based on equal representation of management and employees, Article 21 (6) of the German law on worker involvement in the SE stipulates that a separate selection procedure (put forward by the trade unions) for workers’ representatives on the supervisory board, must be guaranteed in the agreement on worker involvement in the SE (see press release). However, a provision contained in the agreement signed in 2014 between SAP management and the special negotiating group, allows the number of directors to be cut from 18 to 12, while at the same time abolishing the right granted to trade unions to appoint two representatives of their own. SAP believes that these measures are lawful, notably by virtue of the principle of autonomy of the parties, which governs how agreements on worker involvement in the SE are negotiated. However, the Federal Court takes the view that this rule governing trade union appointments should have been complied with, and calls on the EU Court of Justice to check whether German law is compatible with Article 4, paragraph 4, of Directive 2001/86/EC of 8 October 2001, which states that where a SE is created by way of conversion, the agreement on worker involvement provides for application of the “before/after” principle regarding all aspects linked to worker involvement, i.e. the agreement should provide for a level that is at least equivalent to the existing level within the company that is to be converted into a SE. The decision has been welcomed both by IG Metall (see press release https://www.igmetall.de/presse/pressemitteilungen/bag-legt-wichtige-auslegungsfrage-der-mitbestimmung-vor) and Ver.di (see press release https://www.verdi.de/presse/pressemitteilungen/++co++0a9c3be6-e150-11ea-b34b-525400940f89)
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