Transposition of the Mobility Directive: increased protection of employees in case of a cross-border merger, conversion or division
14 Mar 2023
In this newest edition of our series of newsflashes on the upcoming transposition of Directive (EU) 2019/2121 regarding cross-border conversions, mergers and divisions (the ‘Mobility Directive’) – for which Belgium missed the 31 January 2023 deadline –, we’ll briefly discuss its implications for employees.
In short, in order to contribute to the removal of restrictions on the freedom of establishment, the Mobility Directive modifies the existing rules on cross-border mergers and introduces new harmonised rules for cross-border conversions and divisions. These include better protection for stakeholders, including employees, who are confronted with a cross border merger, conversion or division. The Directive’s provisions on the protection of employees can be divided into information and consultation requirements on the one hand and safeguarding employees’ participation rights on the other.
With respect to the latter, it’s important to point out that not all EU Member States provide the same level of employee participation rights – i.e. the possibility for employees to have a say in the appointment of members of a company’s advisory - or management board –, or even participation rights at all. The Mobility Directive strengthens the existing regulations that aim to prevent companies from using a cross-border merger to circumvent a Member State’s rules on employee participation (so-called ‘forum-shopping’) and applies them to cross-border conversions and divisions as well. The Mobility Directive’s provisions on employee participation were transposed into Belgian law in December last year by means of Collective Bargaining Agreement no. 94/1, with effect as of 31 January 2023.
As mentioned above, the Mobility Directive also contains additional information and consultation requirements towards employees, who have to be informed on the implications of the proposed cross-border operation on the employment situation and will have the right to provide an opinion on the proposal. The transposition of these provisions, together with the corporate law aspects of the Directive, forms part of a preliminary draft act that’s currently being examined by the Council of State.
If you have any questions regarding the above or are confronted with a specific case in this respect that requires assistance, don’t hesitate to reach out: we’d love to hear from you! In the next editions of this series of newsflashes, we’ll highlight some of the most important implications of the Mobility Directive for shareholders and creditors.
