thesis definitief
TRANSCRIPT
FACULTY OF POLITICAL AND SOCIAL SCIENCES
DEPARTMENT OF POLITICAL SCIENCE
JUNE 2014
IT’S THE WORKERS’ PARTICIPATION,
STUPID !
WHY THE SOCIETAS EUROPAEA SUCCEEDED AND THE SOCIETAS PRIVATA EUROPAEA FAILED
LUYCKX JEAN-MICHEL
MASTER THESIS PRESENTED TO OBTAIN THE DEGREE OF MASTER IN POLITICAL SCIENCE
PROMOTOR: PROF. DR.PETER BURSENS
ASSESSOR : PROF. DR. PETRA MEIER
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Preface
A thesis is an apotheosis of 4 years of study, I would like to express some words of gratitude:
First I would like to thank my parents for their patience and the continued belief in my capacities
I thank them also for their support in all my past and future projects
Second, my girlfriend that supports me in everything I do and on whom I can always count
Third, Prof. Jan Beyers and Prof. Peter Bursens for their help during my studies and thesis
Also their willingness to help me reach my goals for my next studies
Fourth, Iskander de Bruycker for offering me the possibility of working for the InterEuro-project
Fifth, Prof. Dirk De Bièvre for his honest comments on my thesis
And finally, Prof. Petra Meier for reading and evaluating my thesis
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1 Table of Contents
Preface .............................................................................................................................................. 2
1 Table of Contents ..................................................................................................................... 3
2 Abstract .................................................................................................................................... 6
3 Introduction .............................................................................................................................. 7
4 History ...................................................................................................................................... 8
5 SE and SPE: Same, Same but Different? ............................................................................... 10
5.1 Same use, Same benefits ................................................................................................. 10
5.2 Different Minimum Required Capital ............................................................................. 11
5.3 Difference in establishment ............................................................................................. 12
5.4 Difference in ‘Seat-doctrine’ and Employee Participation .............................................. 12
5.5 Conclusion ....................................................................................................................... 14
6 The Question of Mobilisation ................................................................................................ 15
6.1 SE-negotiations vs. SPE-deadlock .................................................................................. 15
6.2 Mobilisation ..................................................................................................................... 16
6.3 Research question ............................................................................................................ 17
7 Process-Tracing ...................................................................................................................... 19
7.1 Hypotheses and Process-tracing ...................................................................................... 19
7.2 Smoking-gun and Hoop ................................................................................................... 19
7.3 Resume on Process-tracing .............................................................................................. 20
8 Operationalization .................................................................................................................. 20
9 Hypotheses about mobilization .............................................................................................. 23
9.1 Introduction ..................................................................................................................... 23
9.2 Learning from the SE ...................................................................................................... 24
9.2.1 The SE audited ......................................................................................................... 24
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9.2.2 The SE in practice .................................................................................................... 25
9.2.3 Learning theory ........................................................................................................ 27
9.3 Corporatist interest groups mobilisation .......................................................................... 28
9.4 SMEs interest representation capabilities ........................................................................ 32
9.5 Hypotheses, General Overview ....................................................................................... 34
10 Results .................................................................................................................................... 35
10.1 Evaluation ‘Learning’ Hypothesis ............................................................................... 35
10.1.1 Single-loop ............................................................................................................... 35
10.1.2 Double-Loop ............................................................................................................ 37
10.1.3 Conclusion learning .................................................................................................. 39
10.2 Evaluation ‘Corporatist Interest Group Mobilisation’ Hypothesis .............................. 39
10.3 Evaluation ‘Capacity of SMEs to organize’ Hypothesis ............................................. 42
10.4 General Findings: Summary and Limitations .............................................................. 46
11 Single Member Company ....................................................................................................... 48
12 Conclusion .............................................................................................................................. 51
13 Bibliography ........................................................................................................................... 53
14 Appendices ............................................................................................................................. 56
14.1 List of interviewees ...................................................................................................... 56
14.1.1 Face to face ............................................................................................................... 56
14.1.2 E-mail ....................................................................................................................... 56
14.2 Interview Transcript ..................................................................................................... 57
15 Summary ................................................................................................................................ 60
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« L’EUROPE NE SE FERA PAS EN UN JOUR NI SANS HEURTS ; RIEN DE DURABLE NE
S’ACCOMPLIT DANS LA FACILITE »
ROBERT SCHUMAN (POUR L’EUROPE)
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2 Abstract
Het ‘Societas Privata Europaea’ (SPE) is een Europees supranationaal statuut voor KMOs. Het
voorstel voor een SPE werd teruggetrokken door Commissie nadat het waarschijnlijk de
unanimiteit in de Raad niet ging halen. Dit is merkwaardig want het zelfde statuut, maar dan
voor grote bedrijven: het Societas Europa (SE), is wel een verordening geworden. De bedoeling
van dit onderzoek is om via process-tracing en de daar bijhorende interviews, te onderzoeken
waarom het SE een verordening is geworden en het SPE niet. Hierbij ligt de nadruk vooral op
het verschil in mobilisatie van belangengroepen tussen het SE en het SPE (meer bepaald het
beschermen van vakbonden van de werknemersparticipatie). Er zijn drie hypotheses: ten eerste
hebben de vakbonden geleerd van het SE en zijn ze daarom tegen the SPE. Ten tweede raakt het
SPE meer de vakbonden uit corporatistische landen en daarom hebben deze meer gemobiliseerd
in het SPE. Ten derde betreft het SPE de KMOs en deze hebben minder mogelijkheden om zich te
organiseren in vergelijking met de grotere bedrijven van het SE. De resultaten bevestigen een
‘leereffect’ van het SE voor de vakbonden. Ook de derde hypothese, de beperkte organisatie
mogelijkheden van KMOs blijkt te kloppen. De tweede hypothese is in zijn totaliteit niet bevestigd
maar de argumenten voor de hypothese (o.a. vrees voor deregulatie en het grote bereik) zijn wel
toepasbaar op alle vakbonden (i.p.v. alleen op corporatistische vakbonden). Als algemene
conclusie kan men stellen dat de standpunten over werknemersparticipatie (het centrale thema
van het SE en SPE) tussen vakbonden en Commissie alleen maar radicaler worden.
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3 Introduction
On the 27th of June 2008, the European Commission (hereafter: Commission) proposed a
regulation to introduce a statute for a European Private Company. The proposal for a European
Private Company was named the Societas Privata Europaea-proposal or SPE-proposal. The
purpose of this proposal was to set up a supranational European status for Small and Medium
Enterprises (SMEs) or, put differently, a private limited liability company on the European level.
A company with an SPE-statute could look like this: an e.g. German SME wants to extend its
production to Belgium and France. Rather than having three different company forms in 3
Member-States (BVBA in Belgium, SÀRL in France, GMBH in Germany) one single SPE-status
company could be created. In the explanatory memorandum of the Commission on the SPE, the
focus is laid on the importance of SMEs. SMEs are the driving force of the EU economy: “…
they account for more than 99% of companies in the European Union but only 8% engage in
cross-border trade, and 5% have subsidiaries or joint ventures abroad” (COM (2008) 396/3 of
25 June 2008). The SPE-proposal fits in a broader Commission initiative, which is called the
“Small Business Act.” The Small Business Act aims to promote SMEs’ growth by helping them
tackle problems that impede their development. It is in the view of supporting the ‘backbone of
European economy’ (SMEs) that the Commission proposed the SPE-regulation. However in
November 2013 the SPE-proposal was withdrawn by the Commission because it had too many
problematic issues and burdens, including co-determination.
The withdrawal of the SPE-proposal can be considered surprising as there is already an existing
European supranational company form: the Societas Europaea-statute or SE-statute. Indeed the
SPE-proposal has undeniably a predecessor with a long legislative history. The Societas
Europaea (SE) is literally the bigger brother of the SPE. Bigger in a sense that the SE is meant
for bigger enterprises. The target group for an SE-statute are the ‘big’, public limited-liability
companies. The SPE-proposal target group are the SMEs. The SE was negotiated for 40 years
and the issues discussed during the SE are similar than those during the SPE: one of the most
important issues was the question of workers’ participation or the ‘seat-doctrine’. Unlike the
SPE-proposal, the SE-statute became European legislation on the 8th
of October 2001. Several
important big companies have changed their national legal status to the European Status (SE-
status) e.g.: Allianz, Porsche, BASF, SCOR and recently Airbus. With an SE-statute Airbus was
able to set up one supranational European legal statute for all its subsidiaries and branches in all
Member States.
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In this research I will try to uncover, trough the method of process-tracing, how come the SPE-
proposal, a similar legislation as the SE-regulation, did not become legislation. Current and
completed study of the SPE is often from a legalistic or economic point of view. I think these do
not suffice to completely understand the SPE-proposal. It is necessary and useful to look at it
from a Political Science perspective. This perspective can uncover new and better insights of the
SPE, e.g. on the mobilisation of interest groups. Also, what has not been done before, I will draw
a comparison between the SPE-proposal and the legislative path of the SE-regulation. Despite the
fact that there are some differences between both cases, the comparison is relevant and
significant.
Finally, my research focusses on a proposal that has failed to become legislation, the SPE. Most
research in European law-making is based on the process of how existing legislation was
established and how interest-groups were influential in this process. Not very often a research
focusses on why a legislation failed.
In the following, I will first sketch the history, differences and similarities between both cases.
Afterwards, the focus will be on the difference in mobilisation of interest groups between the SE
and SPE. This difference in mobilisation between the SE and SPE-case proved to be an important
issue in the failure of the SPE.
4 History
In this part, I will shortly discuss the historic gestation period of the SE and SPE. In the next part,
I will discuss some similarities and differences between both cases. Both parts are relevant for
understanding the context of my research. Only by accurately describing the difference between
the SE and SPE I can make a valid comparison between the success of the SE and the failure of
the SPE. With ‘the success’, I mean the SE-regulation and directive was approved by the
Council. Failure is in this context the opposite: the proposal has (not yet) become legislation.
Before the SE-statute was established in 2001, the SE was the subject of long negotiations. The
issue of an SE-status was first raised in the years just after the second World War, even before the
EEC was set up. It was proposed, surprisingly by the Council of Europe, as a project for
“European Companies.” Only in 1965, under pressure of the French government, a group of
experts was created to prepare a draft of the statute for an SE. The draft of the expert group was
approved in 1970 by the Commission and was presented to the Council in 1970. It contained not
less than 284 articles. Those many articles were necessary because the statute should apply
independently of national rules (Lenoir, 2007). The first drafts presented the SE as the new
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“flagship of European Company Law, a completely autonomous European legal form freely
floating above the national legal forms” (Teichmann, 2003). However, quickly the proposal was
judged to be too ‘continental’ by several Member States, among others the Netherlands. Between
the first drafts in 1970 and its entry into force in 2004, thirty years of negotiation, assessments,
consultation-rounds, etc. have taken place. Two main problems arose during those 30 years: co-
determination and the fact that there were no references to national law. Co-determination
implies that the worker representatives are appointed to the firm's board of directors for
participation in the firm's decision making process.
The result was a less detailed proposal with more references to national law. An associated
directive on involvement of employees1 was put into place to supplement the SE-regulation.
Finally, the proposal went from 300 articles in 1975 to 137 articles in 1989 to conclude to only 70
articles in 2001. The new regulation was, in general, watered down and “…the European
“Flagship” was heading for the high seas modestly equipped with exactly 70
articles”(Teichmann, 2003). The SE-regulation passed the unanimity in the Council.
The SPE-proposal, however, was launched by the Commission in 2008. 2008 is fairly recent, but
the idea of an SPE-form originates in the same period as the first SE-proposal. Already in 1973
the French company lawyer Jeanne Boucourechliev published a fundamental paper: “Pour une
SARL Européenne”, in which she argued for a flexible form available throughout Europe besides
the SE. She argued that the SE left too much to be desired for SMEs, who wanted to extend their
cross-border activities. Boucourechliev found that there should also be a small, flexible and easily
managed legal form besides that for big companies. Her idea slowly gained attention in Europe.
In 1998, the French business confederation (MEDEF) and the research-institute of the Paris
Chamber of Commerce (CREDA) launched, led by Jeanne Boucourechliev, a first draft on a
statute of a “Société Fermée Européenne” (Hommelhoff & Teichmann, 2012). This draft was a
purely academic exercise, but the SE regulation and directive gave a new drive to the SPE. Soon
after the SE-regulation the Commission started a Feasibility Study for an SPE-proposal. In 2008,
the SPE-proposal was already launched in the framework of the Small Business Act (Zaman,
Schwarz, & Lennarts, 2009). The adoption procedure for the SPE is based on Art. 352 TFEU (ex-
art. 308 EC) which requires unanimity. In November 2013, the proposal was withdrawn by the
Commission when it was clear it would not have passed unanimity in the Council. Especially the
issues of co-determination, minimal capital requirement and the seat of the SPE were a
1 Note: ‘SE-regulation’ and a supplementing ‘Employee Involvement-directive’
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significant burden. The SPE-proposal was taken into the Regulatory Fitness and Performance
(REFIT) Programme. The REFIT programme systematically reviews EU legislation to see if its
aims are being met efficiently and detect regulatory burdens, gaps and inefficiencies
(COM(2013) 685 final of 2 October 2013).
Two conclusions can be made when analysing the history of both the SE- and SPE-case. First, the
idea in general of the European Company (small or large) is almost as old as the EU itself.
Surprisingly it took less time to negotiate a single currency than to establish the SE. Second, the
problem of co-determination is the leitmotiv in both cases. A compromise has been found for the
SE; nonetheless a similar compromise was not found for the SPE.
For the sake of validity, I should also mention that there is a third case in this context: the
Societas Cooperativa Europaea (SCE). The SCE is, in company law, a European co-operative
company. It is similar to the SPE and SE but instead of large companies or SMEs, it was created
for co-operatives. The reason I have chosen not to include the SCE in my research is because
there is not much to be found about the SCE. And, more importantly, was is to be found states
that the SCE is very similar to the SE. It was approved not much later after the SE and the
negotiations took place parallel to the SE. Including the SCE in my study will have as an
outcome that I have the SE/SCE on one side, and the SPE on the other. That is the reason I did
not found it relevant to include it into my analysis.
5 SE and SPE: Same, Same but Different?
As mentioned in the introduction, I would like to uncover why the SE succeeded, and the SPE
failed. If I want to unveil the reasons of the success and failure, I must be sure to define very
carefully both cases. I have to state clearly where they differ and where they coincide. The
singularities of the SE and SPE are overall very technic and legalistic. For the sake of clarity, I
will only discuss the important ones for my dissertation.
5.1 Same use, Same benefits
The SE-regulation and SPE-proposal have as purpose to create a supranational statute for
companies governed by European company law. Teichmann and Hommelhof mention the SPE
as: “… a proposal that has it place side by side with the Societas Europaea” (Hommelhoff &
Teichmann, 2012). In both the SE and SPE-case there are similar arguments for introducing these
legislative forms. I will start by discussing the benefits of the SE and then of the SPE.
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First, the SE-regulation has proven to enhance cross-border trade and/or intra-community
mobility. Second, it encourages grouping of production factors scattered all over the common
market (Lenoir, 2008). Third, the regulation creates a European label for companies engaged in
cross-border trade. This ‘European Citizenship for European companies’ can serve the presence
of Europe in the everyday lives of European citizens (Lenoir, 2007).
The benefits of the SPE are multiple and diverse. First of all the SPE facilitates the reduction of
extensive advice, consultancy and information costs incurred by SMEs that are active in more
than one Member State of the EU. SMEs do not always have the budget to create subsidiaries in
different Member States. For example, an SPE structure involving a French, German and Belgian
SME: thanks to an SPE-statue all three companies can be formed using the same structure in
terms of board structure or employee involvement. Thus saving on legal advice in the
coordination of the three companies (Zaman, et al., 2009). Second benefit is the possibility for an
SME to extend its growth to other Member states. Most SMEs are not making full use of the
Single Internal Market (Impact Assessment, SEC (2008) 2098). In Europe, 99% of all European
companies are SMEs. Moreover, SME’s account for about 70% of all the jobs in the EU (Impact
Assessment, SEC (2008) 2098). According to a survey of KPMG and BusinessEurope: “40% of
the SME’s see limited access to information about doing business abroad, tax issues and
regulatory restrictions as the main barriers to extending operations within the EU” (KPMG &
BusinessEurope, SME action day: Thinking Big!, Brussels 21 November 2007). In sum, the
designated functions and advantages the SPE and SE are similar if not equal.
However even if the intention and the spirit of the SE-regulation and the SPE-proposal are
similar, there are some differences. I will discuss the four main differences: minimal required
capital, formation, the ‘seat-doctrine’ and employee participation. Off course, there are others but
the following are the most relevant for my thesis.
5.2 Different Minimum Required Capital
Some of the differences are typically related to the nature of the types of companies that are
targeted. The difference in minimum required is evidently the result of the inherent difference
between the SE and SPE (the SPE-proposal is for SME’s, the SE is for larger companies). In the
SE-regulation is stated that the capital of an SE cannot be inferior to €120,000 (minimum
required capital). The minimum required capital can be higher for companies developing certain
types of projects. In the SPE-proposal, a minimum capital requirement is set a 1€. The 1€
minimum capital requirement is based on the Anglo-American system. However, this has been
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explicitly opposed by, among others, Germany. Germany was afraid such low minimum capital
requirement does not protect the creditors in a sufficient way. They argued that a minimum
capital of at least 8000€ was needed (Guidotti, 2012).
5.3 Difference in establishment
Another big difference between the SPE-proposal and the SE-regulation is the method of
formation. A company with an SPE-statute can be created ‘in accordance with the regulation.'
This means an SPE can be formed ex nihilo (directly). An SPE can be established, even
unilaterally, directly both by physical and juridical persons. It can also be created by way of
transformation, merger or division of existing national companies (COM(2008) 396 final of 25
June 2008). The SPE-proposal does not, remarkably, demand a real cross-border element
(Guidotti, 2012; Kornack, 2009). Contrary to the SPE-proposal, an SE cannot be created ex
nihilo, it can only be found indirectly. The SE-regulation provides four different modes of SE
establishment: merger, holding, subsidiary and conversion. All four modes of formation share the
necessity of a cross-border element, namely that at least two of the companies involved must be
subject to the legislation of different EEA-countries. Up until now most SEs have been created by
way of subsidiarity (75%) (Stollt & Keleman, 2013).
5.4 Difference in ‘Seat-doctrine’ and Employee Participation
The past two differences were subject of serious discussions in the Council. However, the most
controversial issues are on two related problematic issues: the registered seat and especially the
workers’ participation. These discussions continue to last up to date and will continue with the
upcoming proposal of the SUP (Single Member Company). I will come back to the SUP at the
end of my thesis.
Workers’ participation in the EU is very diverse. Some Member States have no real workers’
participation (e.g. Belgium); others have an extensive workers’ participation legislation (e.g.
Germany). When putting a European wide supra-national company statute this constitutes a
problem because: which level a participation will be used? A low level of workers’ participation
is not suitable for e.g. Germany, it means a reduction in rights for employees. A high level of
workers’ participation means the statute is not very interesting for Member States with a low
level of representation. If, for example, Belgian companies want to engage in cross-border trade
via a European statute, they will have to install a level of workers’ participation with which they
have no experience. Moreover, it complicates their company-law landscape. The SE-statute is
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called, therefore, a ‘compromise regulation’ because a directive supplements the regulation
(Stollt & Kluge, 2011). The SE-regulation is supplemented with a directive on employee
participation (Council directive 2001/86/EC, 2001). In the SE-directive (regarding the
involvement of employees) is stated that when the decision is taken to create an SE a Special
Negotiating Body has to be created. This body has to be created by and for the employees of the
different companies or subsidiaries. The Special Negotiating Body (SNB) and the competent
organs will negotiate and try to find an agreement on arrangements for the involvement of the
employees within the SE. ‘… The SNB and the competent organs of the participating companies
shall determine … arrangements for the involvement of employees within the SE’ (Council
Directive 2001/58/EC, 2001). This de facto means that an SNB has to be, obligatory, set up in all
companies that want to register as an SE. The SNB will negotiate the level of participation in a
certain enterprise with the management. However in practice this is almost never the case, I will
explain this in (9.2.2). A part of the compromise to protect the level of workers’ participation in
the SE-case is the use of the ‘before/after’ principle. This principle is applicable if no agreement
with the SNB was possible. A company, with the so-called ‘before/after’ principle, is obliged to
grant participation rights at board level only if the employees had such rights before. The
‘before/after’ principle originates form the Davignon Group report of 1997 on workers’
participation. The principle is explained by Lenoir as follows: “it protects employees at the origin
of the SE against any reduction in the rights to participate they would have before becoming
employees of the SE” (Lenoir, 2007). Some scholars argue this is an improvement of the workers
representation in Europe. The SE-regulation has been labelled by Lenoir and by Stollt & Kluge as
a step forward in workers’ participation rights. They argue that now workers’ participation is in
the Lisbon treaty, this was not the case in the past. The real innovation is the fact that the SE-
directive contains provisions for a legally binding procedure of company level negotiations
(SNB). “Thus it can be said that the SE-legislation- … - represents a milestone in the field of
European legislation, even with regard to employee involvement” (Lenoir, 2007; Stollt & Kluge,
2011). In sum, general European level standards on co-determination law were not possible.
Instead and as a compromise, employee-participation was assigned to an agreement between the
company and its employees (bargaining). (Hommelhoff & Teichmann, 2012).
While proposing the SPE the Commission did not keep in mind the long negotiations about
workers’ participation in the SE. The general principle is that the SPE is subject to the employee
participation rules of the Member States where it has its registered office. So there are no
mandatory negotiations before the formation of the SPE. Only when there is a transfer of the
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registered office to a country with fewer workers’ participation the above mentioned before/after
principle is applied. This means the rights of employees cannot be reduced when transferring the
registered seat.
Concerning this ‘seat-doctrine,' in the SE-regulation it is stated that: ‘The registered office of an
SE shall be located within the Community, in the same Member Sate as its head office’ (Council
regulation 2001/2157/EC, 2001). The European legislator has clearly opted to apply the ‘real
seat’ theory requiring that the statutory seat (registration) and head office (seat of the
management) must be the same. In contrast, the ‘registered office’ theory allows companies to be
governed by the law of the country of their choice by choosing their place of registration while
having their head office or even their activities in another State (Lenoir, 2007). The SPE-proposal
is based on the registered office theory. The proposal provides the possibility that an SPE’s
registered office and central administration could be separated and put into different Member
States. Under this provision, an SPE could, right from the start, set its registered office where no
co-determination exists (e.g. the UK). At the same time, it could establish its central
administration offices in e.g. Germany, where extensive legislation on workers’ participation
exists. With this manoeuvre, the formed SPE avoided the workers’ participation laws of
Germany.
The decision of the Commission for the registered seat doctrine can be explained by recent
judgements of the European Court of Justice (ECJ). In the “Centros” ruling of 9 March 1999, the
ECJ condemned the refusal of the Danish government to register a subsidiary of a British
company on that grounds that it did not have any activity in the United Kingdom and was seeking
to bypass the formalities required for creating companies in Denmark. This jurisprudence,
followed by other decisions of the same kind, profoundly transformed the legal landscape by
establishing the freedom of movement of companies in Europe, something which had hitherto
been theoretical rather than a reality (Lenoir, 2007). The free movement of companies is the
practical outcome of the registered seat-doctrine.
5.5 Conclusion
Besides explaining the advantages and the similarities of the SE and SPE, four main differences
have come up: minimal required capital, formation, the ‘seat-doctrine’ and employee
participation. I have presented them as separate but, in fact, these four main differences are linked
to each other. The main concept or issue is workers’ participation. A consistent fear of Member
States with well protected workers’ participation is the escape of this participation by companies.
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Companies can, by using other - supranational or foreign - statute, escape the workers’
participation legislation of a Member state. Moreover the SPE-proposal applies the registered
office theory. A possible consequence is that an SME has its registered seat in the UK; ergo it has
no workers participation. However it can have its administration or activities in Germany.
Conclusion: the company avoided the German workers participation (Krause, 2012). Moreover, it
can do this ex nihilo, meaning that is does not need another foreign company or subsidiary. The
companies can set this up with limited risks as the minimum required capital is only 1 €.
In my opinion, the previous historical overview and characteristics description show that SE- and
SPE-case are illustrative for the problem of further European integration and the completion of
the single market. “The SE raises questions of policy and principle that affects the very
conception of European construction” (Lenoir, 2007). The intertwining between the single
market economic interests, social policy and e.g., industrial relations culture, make further
integration (as the SPE) extremely complicated. However, progress is possible (e.g. SE-case).
6 The Question of Mobilisation
6.1 SE-negotiations vs. SPE-deadlock
Most legal and economic research on this topic, though far more extensive, limits itself to the
previous (Guidotti, 2012; Kornack, 2009; Teichmann, 2003; Zaman, et al., 2009). They describe
the features of the SE and/or SPE and conclude e.g. that the SPE-proposal failed ‘because of the
lack of consent on workers’ participation’ (Kornack, 2009) or “the discussion on the minimum
required capital was problematic for the SPE-proposal” (Zaman, et al., 2009). What most of
these articles neglect is that the same discussions were also prominent during the SE-
negotiations. It took 30 years to come to a compromise on e.g. workers’ participation.
So, how come that the same ‘cleavages,’ that were solved and compromised during the SE,
proved to be the cause of failure of the SPE? The SPE-proposal did not get a chance to be
negotiated, like the SE, for more than 30 years. When analysing the histories of both cases, I
remarked that the SE-proposal was adapted four times before becoming legislation. As I
mentioned in (3), it went from 284 articles to only 70 articles in the final legislation. Moreover,
the SE-statute was never withdrawn so abrupt by the Commission as the SPE-proposal. The
Commission withdrew the SPE-proposal in November 2013, and there is no prospect of an
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amended, new version2. For now the SPE is wound up and is not likely to come back in the near
future. The least one can say is that there is a difference in approach, in the SPE-case.
Many possible explanations can be analysed: difference in the political space, other policy-
makers, different geopolitical realities, other institutional setting, etc… All these reasons can be
explored as valid explanations for the failure of the SPE. However several scholars mention the
extensive mobilisation as one of the core-factors of the failure of the SPE.
6.2 Mobilisation
The effect of mobilisation on these cases has not yet been researched but are nevertheless named
as the primary cause of failure for the SPE-proposal by different authors (Krause, 2012; Zaman,
et al., 2009). “The SPE-project was blocked in the Council of Ministers mainly by Germany. The
German government adopted the rejection of the German trade-unions and implemented this at
the European level with a Soviet like “njet” thought to have been dispensed with long ago” or
“The German trade-unions do not intend to concede to the European legislator any loopholes to
avoid co-determination” (Hommelhoff & Teichmann, 2012). The biggest fear of the trade-unions
is the fear of ‘participation-shopping’. It consists of companies choosing the type of company that
is the most accurate and suited to avoid workers’ participation. The SPE could give these
companies a new tool to do ‘participation-shopping’. Off-course workers’ participation is not the
only problem; also minimum required capital, the ‘seat-doctrine’ and the difference in
establishment are serious issues for the trade-unions. However, as shown in (4.5) these are all
linked to each other and especially to the workers’ participation-question. In sum, as mobilisation
played an important role, I will focus my research on the difference in mobilisation between the
SE and SPE.
Still, one can critically question: what if there was no mobilisation on the SPE-proposal, would it
not have been voted off anyway in the Council? It is difficult to answer this question but the
recent coalition agreement in Germany (2013) states clearly that a European supranational status
for SMEs should be the objective: ‘Im Interesse mittelständischer Unternehmen setzen wir uns
dafür ein, eine Europäische Privatgeschellschaft (Europa-GmbH) zu schaffen’. But with respect
for the national laws on workers’ participation: ‘Wir warden dabei sicherstellen dass die
nationalen Vorschriften über die Mitbestimmung nicht umgangen werden’ (German coalition
agreement, Deutschlands Zukunft gestalten, p. 18).
2 There is a proposal coming up Single Member Company (Societas Unius Personae (SUP)), on which I will elaborate at the end
17
The fact that the SPE is still a German priority but has been rejected in current shape endorses
(besides the literature) the possible importance of mobilisation. Germany was, and this is
confirmed by the Belgian permanent representation, the biggest opponent of the a SPE-statute in
the Council.
In general, my thesis is not just illustrative for the problems modern day Europe faces, it is also a
good case-study of interest groups mobilisation. It is in the context of ‘interest-groups
mobilisation’ that I will formulate my research(-question).
6.3 Research question
The previous makes it clear that the SE and SPE-case are cases that touch upon many aspects of
European decision-making (single market, social policy, company law harmonisation, interest-
group mobilisation, …). Defining why the SPE failed and the SE passed is, therefore, a global
and comprehensive research. The ‘problem statement’ is: why did the SPE failed if the SE
succeeded. However the research-question will limit itself to the mobilisation. I will focus my
research on the mobilisation of interest-groups and the workers’ participation topic. Although this
is a piece of the puzzle, it is a consistent piece of the puzzle (Hommelhoff & Teichmann, 2012;
Krause, 2012; Teichmann, 2003). If I answer how the mobilisation differed in the SE and SPE-
case and how workers’ participation played a role, I have unravelled a great piece of this SE/SPE-
puzzle.
In sum, in the subsequent research I will focus on the following research-question:
WHY DID, IN THE SPE-CASE, THE MOBILIZATION OF INTEREST GROUPS DIFFER
FROM THE SE-CASE?
Note that this research-question fits in the broader context of “Why did the SE became a
legislation and the SPE not?”. This research-question is specifically related to the SE and SPE-
case, but can have some generalisations. For other similar cases, e.g. the upcoming single
member company, my research can be a reference. To answer the research-question, I have come
up with three hypotheses. I will elaborate extensively on these hypotheses in (7), after I
elaborated on the methodology.
Below is a schematic overview of the research question:
18
?
Subject of Research
SPE-proposal
Regulation
SE-proposal
Regulation
Mobilisation of interest groups
Other factors
Political will
Trade-unions learned from the
SE-regulation and mobilized
extensively against the SPE-
proposal.
The unions in the corporatist
countries mobilized more
extensively against the SPE-
proposal.
The SME-interest representation
is not as organized as the big firm
lobby. They did not manage to
mobilize as effectively as the big
companies did in the SE-case.
Mobilisation of interest groups
Environmental Circumstances
Figure 1 Schematic Overiew Research-Question
19
7 Process-Tracing
7.1 Hypotheses and Process-tracing
For a total understanding of why the interest group mobilization differed in both cases I work
with three hypotheses. These are shortly stated in the schematic summary above. The hypotheses
I formulated are based on readings on the subject. The three hypotheses give three different
reasons of why the mobilisation was different during the SE and SPE. If (some of) these
hypotheses are confirmed, I can draw my conclusions about the difference in mobilisation. I use
my hypotheses to prove a causal inference between mobilisation and the failure of the SPE.
The use of hypotheses to prove a causal inference is called the method of: ‘process-tracing’.
George & Bennett state that process-tracing is a “method [that] attempts to identify the
intervening causal process - the causal chain and causal mechanism - between an independent
variable (or variables) and the outcome of the dependent variable” (George & Bennett, 2005).
Alternatively, as Mahoney puts it in his article on process-tracing: “Process-tracing can be used
as a method for evaluating hypotheses about the causes of a specific outcome in a particular
case.” Practically this means that if I compare the SE and SPE-case I would like to know how
come one passed, and the other failed. As explained in the past, several factors can be identified
as the cause of the failure of the SPE. A difference in mobilisation from the SE-case is a very
significant one. If I find out why the mobilization differed then, I can make some assumptions
about the SE/SPE-case. I have three hypotheses for explaining “why the mobilization differed.”
The research wonders “Was X the cause of Y in the case Z”, where you want to locate a general
causal effect in particular cases. “Was the difference in mobilisation the cause of failure of the
SPE in the SE/SPE-case? By investigating these hypotheses, let’s call it the mechanism M, I can
draw conclusions about the interest mobilization and ergo about the SE/SPE (on the subject of
interest mobilization). The mechanism M is defined as “a set of hypotheses that could be an
explanation for some social phenomenon” (Hedström & Swedberg, 1998). If X is the difference
in mobilization of interest groups, and Y is the success and failure of SE/SPE. Then the
mechanism M is the causal inference that is necessary for the result.
7.2 Smoking-gun and Hoop
Process-tracing is a widespread and used often as technique in Political Science. Major concepts
of process-tracing are the ‘smoking gun test’ and ‘hoop test.’ These are (two of the) specific tests
in process-tracing that can help the researcher establish that a specific event or process took
20
place. The hoop test implies that a particular causal-process observation must be present for a
hypothesis to be valid. This means that falling a hoop test eliminates a hypothesis, passing does
not confirm it. The smoking gun test contrarily proposes that if a certain causal-process
observation is present then the hypothesis must be valid. This means that failing a smoking gun
test does not eliminate the hypothesis, passing does confirm it (Mahoney, 2012). Both tests can
be used to evaluate hypotheses proposing that certain specific unobserved events or processes
occurred. In my opinion, my hypotheses are formulated in a way that they are subject of the
smoking gun test.
In my thesis, I hypothesize that an unobserved cause (e.g. one of my hypotheses) had the result
that there was more mobilization in the SPE-case. The consequence of passing the smoking gun
test is to confirm the hypothesis. Failing it does not eliminate that the cause or the outcome exists
(Collier, 2011). If the data indeed confirms that the hypothesis took place, the hypothesis is
confirmed. If it is not confirmed then the hypothesis is not automatically rejected. It is possible
that I have measured wrongly or not adequately my hypothesis.
7.3 Resume on Process-tracing
In sum, I must be careful with my conclusions of why the SE succeeded, and the SPE failed. This
is because I have an outcome (SE success, SPE failure) but no precise and observable
(measurable) reasons for the outcome. An important factor is a difference in mobilisation. The
difference in mobilisation can be the cause of the failure of the SPE. However, the ‘difference in
mobilisation’ cannot be measured as such. Therefore, I found from the literature and readings,
three hypotheses that could explain the difference in mobilisation. If (some of) these are
confirmed, I can conclude the mobilisation differed between the SE and SPE-case. Subsequently
I can say the SPE failed, among other reasons, because of a difference in mobilisation with the
SE. This method with chains of evidence and causal inference is called process-tracing
(Mahoney, 2012).
8 Operationalization
The operationalization of the process-tracing method can happen through semi-structured
interviews (Dür, 2008c; Tansey, 2007). This is a result of the fact that process-tracing focuses on
finding causal mechanism for unobservable events, “it links causes to effect.” These causes are
difficult to measure quantitatively and can, therefore, be measured more suitable in a qualitative
way. That is especially the case in this research. In other research involving process-tracing
21
quantitative methods can also be used. The interviews demand a high quality for an in-depth
understanding of the subject and the hypotheses. Tansey mentions four uses of elite-interviewing:
corroboration what has been established from other sources, establish what a set of people thinks,
make inferences about a larger population’s characteristics and to reconstruct an event or set of
events.
Tansey explanation of the concept ‘to reconstruct a set of events’ suits the purpose of my
research: “Through direct and focused questioning, researchers can reconstruct political
episodes on the basis of the testimony of respondents, stitching together various accounts to form
a broader picture of a complex phenomenon, and gather detailed information about the process
in question. Elite interviews can shed light on the hidden elements of political action that are not
clear from the analysis of political outcomes, or of other primary sources” (Tansey, 2007).
George and Bennett also envisage interviews to be one the central forms of research when
applying process-tracing. The elite-interviews are critical sources of information. However, the
interviews are not isolated from other data sources as archival material (George & Bennett,
2005). This is also what I will try to do, apart from gaining information from my elite-interviews
I read as many position papers, official EC-documents as possible. Embed my research with
official documents is crucial if I want to understand all aspects of this case.
The article of Tansey is a good guide on how to conduct interviews for process-tracing. When
selecting which people I would interview I kept the advice of Tansey in mind: “…, the most
important issues to consider when drawing the sample are that the most important and influential
actors are included in the sample and that testimony concerning the key process is collected from
the central players involved. In such circumstances, random sampling will be a hindrance rather
than a help as the most important actors of interest may be excluded by chance. Instead, the goal
with process tracing is to reduce randomness as much as possible, and work to ensure that the
identities of the most important actors are established and that they are approached directly for
the interview” (Tansey, 2007).
Just as proposed by Tansey I have chosen the institutions/interest-groups I want to interview very
carefully. I wanted to reduce the randomness as much as possible and interview specifically the
people that could have a special added value to my research. So, again as Tansey suggested, I
started by contacting directly the people I knew were active in this proposal. I knew specifically
which people were active thanks to the InterEuro-project of the University of Antwerp. While
trying to map interest-group activity in the EU, the InterEuro-project included the SPE-case as
one of the approximately 150 legislative cases. The project interviewed Severine Picard from
22
ETUC3 and Pedro Oliveira from BusinessEurope
4. The project also found that UEAPME
5 and
EuroChambres6 were active on the proposal. I was able to contact and arrange an interview with
Ms. Picard of ETUC. The contact person within BusinessEurope left the organisation and was not
accessible for an interview.
I went looking for a replacement for BusinessEurope and arranged an interview with somebody
of EuroChambres (he preferred to stay anonymous). I knew he was active on these cases thanks
to a position-paper of his organisation. I contacted the UEAPME as they are the voice of SMEs in
Europe. I interviewed the ETUI, they are very active in researching the effects of the SE and the
future effects of the SPE for workers’ participation. The ETUI7, and specifically M. Stollt,
created a website about workers’ participation in the EU8. M. Stollt is as well the co-author of
many books about the SE and many articles about the SE and SPE. He is an expert on the subject.
I have tried to interview somebody from the DGB9 but, unfortunately, they were only prepared to
answer my questions via e-mail.
Via the UEAMPE, I have been able to arrange an interview with the first assistant of the
President of the EESC10
(M. Malosse). The EESC is interesting because it gathers many interest-
groups, and it published a positive advice for the SPE. Moreover, during my interview Luc
Hendrickx of the UEAPME revealed that ‘la SPE est un enfant de Malosse.' In his career, M.
Malosse pushed many initiatives to help the SMEs. Finally, I was able to contact the Commission
and somebody (he prefers to stay anonymous) of the DG Markt that worked specifically on this
proposal.
In sum, as shown below, I conducted six face-to-face interviews. Two institutions: the EESC and
the DG Markt. I conducted two interviews on the ‘right-side’: UEAPME and EuroChambres. So
finally, I conducted two interviews on the ‘left-side’: ETUC and ETUI.
3 European Trade-Union Confederation (ETUC) 4 BusinessEurope is the leading business lobby group in Europe 5 European Association of Craft, Small and Medium-Sized Enterprises ( UEAPME) is an umbrella group for associations of SMEs 6 EuroChambers is the Association of European Chambers of Commerce and Industry 7 European Trade-Union Institute (ETUI)
8 www.worker-participation.eu 9 The Confederation of German Trade Unions (German: Deutscher Gewerkschaftsbund, (DGB)) 10 European Economic and Social Committee (EESC)
23
Institutions ‘left-side’ ‘right-side’
the EESC ETUC EuroChambres
DG Markt ETUI UEAPME
(DGB*) (DIHK*)
* : Only contact and questions by e-mail
Besides these face-to-face interviews, the Belgian permanent representation, the DGB and the
DiHK11
answered my questions via e-mail.
Note that the distinctions between left- and right-side is rather arbitrary and purely for the sake of
clarity. With the left-side, I mean the interest-groups that defend the well-being of employees.
The right-side represents the employers. It is relevant to keep in mind that when talking about
interest groups during my thesis, I limit myself to the interest groups I had contact with. These
are ETUC, UEAMPE, ETUI, DGB, DIHK. These are all the main interest-groups that were
active on the proposal (except for BusinessEurope who I did not interview) based on the
InterEuro files, but also based on the information given by the DG Markt. I should also mention
that I had many contact (via e-mail) with Prof. Dr. Christoph Teichmann of the University of
Würzburg who is specialised in the SE and SPE-case.
The exact interview guide is added in the appendix, together with a list of names of the people I
had contact with in the previous mentioned organisations/institutions (and were willing to be
cited).
9 Hypotheses about mobilization
9.1 Introduction
In the previous I already elaborated on the outline of my research. I want to know how the
difference in mobilisation influenced the SPE-case. As ‘difference in mobilisation’ is not directly
observable nor measurable, I will have to use the method of process-tracing. By analysing the
SE- and SPE-case very carefully (I have done so in (4) ) and formulate hypotheses I can draw
conclusions on the difference in mobilisation between the SE- and SPE-case. The difference in
mobilisation, and specifically the issue of the protection of workers’ participation is one of the
core elements of the failure of the SPE.
11 Association of German Chambers of Industry and Commerce (Deutsche Industrie- und Handelskammertag (DIHK))
24
In following, I will extensively discuss my three hypotheses: learning from the SE, more active
mobilisation of the interest-groups of corporatist Member States and the capabilities of SMEs
interest representation.
9.2 Learning from the SE
My first hypothesis suggests that the trade-unions mobilised more extensively during the SPE
because they learned from the SE-case. I will come back later on the concept of ‘learning’, first I
will discuss why there is something to learn from the SE for the trade-unions.
9.2.1 The SE audited
The SE-legislation entered into force on 8 October 2004. However it was not until March 2007
that all EEA-members had transposed the SE directive into national law. Approximately a decade
later it is possible to see what implications the SE had on the corporate landscape. On 1
November 2010 a total of 658 SEs have been created (Ernst & Young, 2009). On 15 August
2012, this number rose to 1379 established SEs (Stollt & Keleman, 2013). Currently, the SE can
be found in 25 of the 30 countries of the EEA. An important observation when looking at the SE,
and its impact, is the very unbalanced distribution of SEs between the different Member States.
The Czech Republic (63 %) and Germany (16 %) host by far the highest share of the overall
number of the SEs. Besides the Czech Republic and Germany, significant home countries are the
UK, Slovakia, France, the Netherlands, … The top-10 SE Member States together are home to
95% of all SEs. A significant increase in SEs can thus be observed, but a serious question mark
should be placed at this increase in SEs (Stollt & Kluge, 2011).
The SEs can be divided into different categories depending on some characteristics. The
European Company DataBase (ECDB) is a database established and updated by the ETUI 12
. The
ECDB categorizes al SEs in four distinct categories: normal, empty, shelf and UFO SEs. Normal
SEs are the only SEs really having employees and conducting business activities. They must have
more than 5 employees to be categorised (by the ECDB) as normal. Empty SEs are characterised
by economic activity, but no employees. Shelf SEs are ‘sleeping beauties’, they have no specific
business purpose. And UFO SEs are, as the term indicates, ‘unidentified flying objects’, which
are hard to define (van het Kaar, 2011). The UFO SEs may sound abstract (and it is) but these
SEs are the result of the reference to national law13
in the SE-regulation. Because of the reference
to national law, you could say that every Member State has a different SE-from. Therefore, there
12 http://ecdb.worker-participation.eu/ 13 As mentioned in (2) and (3)
25
are some weird forms as the UFO SEs. However, they are not of great importance and can/will be
left aside. What is very relevant is that in 2010, the number of normal SEs was 166 (out of the
658 or ± 25%). In 2012, only 219 SEs (out of the 1379) or only 16% had been identified by the
ECDB as normal SEs. The number of SEs increased significantly over the years but the share of
normal SEs decreased consequently (Stollt & Keleman, 2013; van het Kaar, 2011). If I look at the
number of normal SEs per country in 2012 I can see that 103 (out of 219) normal SEs are based
in Germany and 45 (out of 219) normal SEs are based in the Czech Republic. Out of the past data
two conclusions can be drawn. First the Czech Republic is home to many Shelf, Empty and UFO
SEs. Second, the number of SEs may seem a success, when analysing them, one can conclude
that very few are actual normal SEs. Between the implementations (2006) and 2012 only 219
normal SEs have been created.
9.2.2 The SE in practice
I already stated that interest groups (mainly ETUC) were afraid of participation-shopping. The
SPE could give enterprises the possibility to avoid workers’ participation. Well, this fear of
workers’ participation avoidance originates in my opinion from the SE-case. The SE-case can be
seen theoretically as a success for workers’ participation. I discussed this above in (5.4). One of
the guarantee for workers-participation protection is the ‘before/after’-principle14
. This principle
basically means that the system of involvement applied by the SE will be greater than any place
in the companies at the origin of the SE. This has been argued to be an improvement of the
workers representation in Europe (Stollt & Kluge, 2011; Zaman, et al., 2009). However, in
practice the SE has not always been a blessing for workers’ participation.
The setting up of an SNB is mandatory for every SE. The SNB and the management of the SE
negotiate the level of participation. If no agreement is reached the standard rules apply
(before/after principle). The mandatory SNB 15
was not set up in most of the currently registered
SEs. Only in 8% of cases are the setting up of an SNB known to have taken place. The key
reason for this low number lies in the high share of SEs set up by way of subsidiarity SE, which,
can have no employees at the moment of founding (Stollt & Keleman, 2013). Shelf, empty or
UFO SEs have at the moment of founding no employees, ergo no SNB is possible. In the case of
normal SEs, this picture looks better. In 105 (of the 219, ± 48%) SEs, an SNB was set up.
However, this is at the very least not as much as was required by the employees’ association
ETUC (Cremers, Kluge, & Stollt, 2010). This is the core of the problems the SE face today: the
14 As explained in 5.4 15 Special Negotiation Body (SNB) explained in 5.4
26
SE has been used by companies in some cases to ‘freeze’ the existing participation status and
reduce the size of the supervisory board. The reason for the impressive success of the SE in the
Czech Republic have long remained largely unexplained. In recent years, it became obvious that
the SE has developed into an alternative company form for the Czech national company-statute.
An alternative company form that can be a threat to existing involvements rights (Cremers &
Carlson, 2013).
The previous is rather theoretical and does not really show what the ‘freezing’ of employee
participation mean. In the following, I will give a concise example of 2 large German companies
that changed into an SE and the consequences for employee-participation. First Allianz, the
German financial services provider turned into an SE in 2006. Allianz adopted the legal form of
an SE by merging with its Italian subsidiary RAS. The supervisory board has been reduced from
20 to 12 members. The employee side is composed as follows: Germany (4), France (1), United
Kingdom (1). The percentage of board-level representation stays the same, it is still 50% (10 out
of 20, 6 out of 12), however the board size is reduced. The second example of an SE company is
GfK; it had 1/3 of the members of the board who were employees before the conversion into an
SE. That was because it was close to, but under 2000 employees. A company in Germany with
more than 500 employees has to have 1/3 of employees as members of the board. A company
with more than 2000 employees has to have 1/2 of employees as members of the board. In the
case of further growth and employment, GfK would have had to introduce employment
representation on a parity base. Put differently, if it had exceeded the 2000 employees it would
have to allow 1/2 of employees in the board. By converting to an SE, it had a chance to preserve
its 1/3 seat distribution. During the negotiations with the SNB, GfK agreed to enlarge the size of
the supervisory board. There are now 4 instead of 3 employee representatives (out of 10 board
members) (Rehfeldt, 2013). The prior is also confirmed in the (extensive) research of
Eidenmüller et al., the results of their research show that: “our respondents named co-
determination as a factor for 29 out of 49 SEs. Additional support for H2 [Countries with
mandatory worker co-determination rules exhibit more SE formations] comes from the fact that
negotiations on employee involvement in the SE produced some very creative outcomes: in some
firms, employees acceded to a smaller ‘Representative Body’ and a precise definition of its
competences while the company promised a higher frequency of meetings with management and
offered employee representatives improved access to work sites abroad.
27
At least one firm abolished codetermination completely in exchange for a ‘social fund’ on behalf
of its employees. […. ] In sum, survey responses confirm that avoiding or reducing worker
codetermination plays an important role for many SE incorporators” (Eidenmüller, Engert, &
Hornuf, 2009).
9.2.3 Learning theory
The previous gives a clear image of the SE. In sum, the level of participation was not eradicated
or reduced in the many normal cases, i.e. normal SEs. The level was ‘frozen’ in many cases, and
the board reduced in size. The reduction in size of the board does not really fit the preferences is
of the trade-unions. Furthermore, there are the cases of shelf, empty and UFO SEs of which
nobody knows the purpose. Overall the SE is not the success, trade-unions hoped it to be. There
is no employer-participation in other European Member States that had previously no
participation like the trade-unions hoped to have (Rehfeldt, 2013). Instead there is a freezing of
participation and weird unknown forms of SEs that can be threat to workers’ participation
I conclude out of previous that the trade-unions did not get what they expected with the SE.
Therefore, there is a reluctance for introducing a new form that could potentially even more
complicate the European company law landscape. I can state that the trade-unions learned from
the SE case for the SPE-case. This concept of learning is rather new in interest-group literature.
The concept exists but mostly ‘learning of other interest-representation groups’ e.g. (Knodt,
Greenwood, & Quittkat, 2011). That is why I focus on the organization literature. The trade-
unions learned as an organization from the SE-case to apply this in a similar case. Argyris &
Schön formulated very well how the trade-unions could have learned from the SE-case; they
introduced the concept of ‘organizational learning.' Organizational learning consists of single-
loop and double-loop learning. ‘When the error detected and corrected permits the organization
to carry on its present policies or achieve its presents objectives, and then that error-and-
correction process is single-loop learning. Single-loop learning is like a thermostat that learns
when it is too hot or too cold and turns the heat on or off. The thermostat can perform this task
because it can receive information (the temperature of the room) and take corrective action.
Double-loop learning occurs when error is detected and corrected in ways that involve the
modification of an organization’s underlying norms, policies and objectives’ (Argyris & Schön,
1978)
In single-loop learning, an organization modifies its actions according to the difference between
expected and obtained outcomes. It detects a problem (another outcome) and tries to solve it. In
my research this means the trade-unions realise the SE is not ‘the pinnacle of workers’
28
participation in Europe’ as Van het Kaar puts it (van het Kaar, 2011). The trade-unions will try to
rectify the inequalities or biases of the SE. With double-loop learning, the organization questions
the values, assumptions and policies that led to the actions in the first place. If the organization is
able to modify those, then second-order or double-loop learning has taken place. The
organization is looking at what has past and tries with feedback to determine what when wrong.
Double loop learning can be described as: ‘the learning about single-loop learning’. In SE/SPE-
case, the trade-unions have realised workers’ participation is in ‘danger’. They learned that
workers’ participation must be protected and that they should be careful when harmonisation of
any kind occurs. Therefore, the mobilisation during the SPE was much more contentious.
The previous laboured introduction can be formulated in the following hypothesis:
H 1: GERMAN AND EUROPEAN TRADE UNIONS LEARNED FROM THE SE-REGULATION,
SPECIFICALLY ON THE ISSUE OF WORKERS’ PARTICIPATION AND MOBILISED EXTENSIVELY
AGAINST THE SPE-PROPOSAL.
9.3 Corporatist interest groups mobilisation
The first hypothesis is the result of extensive research of the literature on the review of the
SE. The second hypothesis is based on a reflection of which Member States blocked the
SPE-proposal. The Belgian permanent representation in Europe confirmed Germany,
Austria and Sweden were the biggest opponents in the Council for an SPE-statuteaqqa<q.
These are all Member States with a corporatist tradition. I can argue that in corporatist
member-states the trade-unions are more cautious with the SPE than with they were with
the SE.
First of all, corporatism can be defined as the institutionalized integration of privileged organized
interests in policy making and implementation (Christiansen et al., 2010). I can argue that the
SPE forms more than the SE, a threat to the ‘institutionalized integration of privileged organized
interests in policy making.’ The interest-groups from corporatist Member States are thus
characterised as a privileged interlocutor with the government and able to intervene in
policymaking.
Öberg et al. focusses in their research if governments and interest groups are trustworthy actors in
corporatist exchanges. They argue a credible exchange partner needs to have the opportunity,
means and motive or put differently: mandate and unity, assets and intent (Öberg et al., 2011).
First the mandate means the government, on the one hand, must be in control over a set of
29
policies. The political power may devolve because of transfers of competences to the European
level. Europeanization has affected the functioning of the corporatist democracy, including the
autonomy of national governments. On the other hand, the interest groups must have a mandate
to speak on behalf of its members. In Europe there is a continuing downgrade of membership of
trade-unions in corporatist Member States (Visser, 2006). The main assets of an interest group in
its exchange with government is the number of members it can persuade to accept deals struck
over public policies. Many members of e.g. a trade union vote for the same political parties. This
is an important bargaining benefit when talking to the government. The political loyalty is also in
decline in corporatist Member States (Oswald, 1985). Assets also imply that governments must
have means to supply advantageous policies to interest organizations to persuade them to engage
in exchanges. The intent is the willingness of the government to engage in a corporatist exchange
(Öberg, et al., 2011).
I argue that the SPE-statute forms an important threat to the power of trade-unions in a
corporatist country. First, the level of corporatism is also an indicator for the level employee-
participation in a country. Siarrof made a classification of corporatist countries in the world. In
Europe he classified Austria, Germany, Norway, Sweden, the Netherlands and Belgium as
corporatist countries (Siaroff, 1999). Al these countries are characterised with a relative high
degree of workers’ participation. Among others; Germany, Netherlands and Austria have
workers-representation in the private and public owned companies. Non-corporatist countries like
Italy, Spain, Portugal or Poland only have some kind of representation in state-owned companies.
The only exception is Belgium; Belgium is a corporatist country with a relative high level of
power for the trade-unions. However, they have a low level of workers’ participation. France is
for Siaroff a ‘problematic’ case just as Switzerland. It is hard to categorise France but France
passed new legislation in 2013 that has greatly extended the range of companies covered by the
obligation to have employee representatives at board level. Not only state-owned and privatised
companies which were previously included, also very large private companies must in future
have at least one employee representative at board level. The connection between corporatism
and workers’ participation has not yet been researched, but I assume that this link is not
coincidental. The former explains why trade-unions from corporatist Member States could have
been more active on the SPE-case then they were on the SE-case. There is a matter of
competitive deregulation. In the European environment of economic integration and fragmented
regulation, member states will face pressures to adjust national regulations to make them more
attractive to industry. At the extreme, this process of regulatory competition among member
30
states can create a regulatory ‘race to the bottom,’ in which Member States competitively
deregulate in an attempt to remain attractive to mobile capital. In order to generate such a race to
the bottom, moreover, capital does not need to actually move across national borders; it must
only threaten credibly to do so, thereby provoking anticipatory deregulation by Member States
(Streeck, 1996).
“Competitive deregulation in the internal market is a game that no country can hope to win, but
from which none is able to withdraw unilaterally” (Scharpf, 1996). This statement can also be
applied on the SE/SPE case. In the SE-legislation competitive deregulation has been avoided with
the application of the ‘real-seat’ doctrine. However, the chances of competitive deregulation with
the SE have been deemed possible. It is plausible that the emergence of the SE company will put
pressure on the Member States that have mandatory employee involvement in the decision
process. For instance, employee engagement could be reduced to situations where the decision of
the company explicitly affects the well-being or utility of the employees or where the interests of
other stakeholders are seriously at stake (McCahery & Vermeulen, 2005; Rose, 2007).
In the SPE-proposal, different from the SE, the ‘registered-seat’ is applicable. This means that
competitive deregulation could occur if the SPE-proposal were to become a regulation. Because
of the registered-seat doctrine companies can shop around Europe to find their most suitable
regime. This is true for tax, environmental law and also for workers’ participation rights. Instead
of an ‘upgrade’ in workers’ participation rights, you might get a ‘downgrade’ because of
competitive deregulation as Streeck explained.
The fact that the SPE-proposal is for SMEs creates an even bigger fear of trade-unions of
competitive deregulation. SMEs account for 99% of the companies in Europe. The SE is meant
for big companies that account only for 1% of the total amount of companies. The relocation of
larger companies (subject of the SE) is for a certain extent inevitable. Today big companies shift
their place of production all the time. EU Member States try to attract enterprises by providing
subsidies, tax holidays and other specific types of support. The European competition law limits
these. By creating a status for big enterprises (the SE), the Commission responded to the needs of
larger companies that deal all the time with cross-border activities. The SE-status was an answer
to a worldwide ongoing trend (Galgóczi, Keune, & Watt, 2006). For the trade-unions of
corporatist states, it was a matter of adapting the SE-proposal as much as possible in their
advantage. The SE was a window of opportunity for the trade-unions to harmonise on e.g.
workers’ participation. This harmonisation was necessary because relocation was continuously
occurring. With the SPE, this is different. The Commission states in her explanatory
31
memorandum that the potential for cross-border trade was not yet fully used in Europe: “ SMEs
account for more than 99% of companies in the European Union but only 8% engage in cross-
border trade and 5% have subsidiaries or joint ventures abroad” (COM (2008) 396/3 of 25 June
2008). The proposal has as a meaning to facilitate this cross-border trend for higher economic
growth. The difference with the SPE is that the SE responded to a given fact and trend. The SPE
wants, in a way, to create that same ‘given fact and trend’. Harmonisation of workers’
participation rights in SMEs across Europe is not what trade-unions from corporatist Member
States are waiting for at the moment. It is only in their disadvantage as the large extent of SMEs
do not deal with cross-border mergers. The level of participation would only be inferior in the
potential SPE-regulation to existing law in corporatist Member States. The SPE-proposal could
create a statute that could be used by SMEs instead of the national statute. The SMEs could
choose between a statute with high workers’ participation or relative low level of participation.
This explains why the SPE-proposal faced a severe ‘njet’ of the trade-unions.
To conclude; the SPE-proposal touches upon certain characteristics of the corporatist state. The
harmonisation of workers’ participation rights across Europe touches upon the mandate the
government of a corporatist Member State has. A new statute that could be used as an alternative
to the national statute is a risk for the workers’ participation in a country. Once it is a regulation it
cannot be renegotiated with the national trade-unions. It is no longer a mandate of the state. It
also touches upon the mandate of the interest group. If the SPE-proposal becomes a regulation a
potential large part of the national core policies trade-unions deal with (workers’ participation)
becomes a part of the European acquis. The SMEs account for 99% of businesses in Europe, the
risk of losing the mandate there is not worth taking for corporatist trade-unions. Moreover, there
is the loss of members of the Unions. This means the assets are also diminished . Extremely, a
mandate that becomes more narrow and the assets that diminishes could be a threat to the intent
of the government. The past showed that for trade-unions in corporatist Member-States, the SPE-
proposal imposes only threats. So if the SE was an answer to existing problems with relocation,
the SPE-proposal is not and can create instead of solve problems concerning e.g. workers’
participation in Europe.
32
The following hypothesis can be formulated:
H 2: IN CORPORATIST MEMBER STATES THE SPE-PROPOSAL COULD MEAN, MORE THAN WITH
THE SE-REGULATION, LOSS OF POWER FOR THE TRADE-UNIONS. THEREFORE, THE UNIONS
FROM THE CORPORATIST MEMBER STATES MOBILISED MORE EXTENSIVELY AGAINST THE
SPE-PROPOSAL.
9.4 SMEs interest representation capabilities
The third and last hypothesis is linked to the nature of the SE and SPE. As reiterated couple of
times, the SMEs are the target of the SPE-proposal, the SE targets large companies. In the SE-
case, the companies involved are large (resourceful) companies. These companies have been able
to mobilize very efficiently over the years in Europe. My hypothesis is that the SMEs were not as
successful in organizing their interests.
It is often argued that the business, as a relatively concentrated interest with relative small
number of actors, has an easier time mobilising across national boundaries than labour. Streeck
argues that the industry is better organized and better resourced at the EC level then competing
interest groups such as the labour, environmentalists, consumers and women’s groups (Streeck,
1991). Also, Coen concludes in his article the big firms have direct access to the Commission. He
labels the positions of firms in the public policy process as ‘prominent’ (Coen, 1997). Coen &
Dannreuther compared the Europeanization of large and small business representation: “…the
problems of representing embedded SME interest at the European level are starkly illustrated
when described in comparison to large firms. In resource dependency terms, the representation
of small businesses is heavily disadvantaged by its ability to organise in ways that larger
businesses, with their clear and internally defined interests and Brussels offices, do not
experience…” (Coen & Dannreuther, 2002). When I compare the history of large and small
business representation this ‘ability to organise’ becomes clear. Already in 1958 the big
businesses created the Union of Industrial and Employers' Confederation of Europe (UNICE).
This permanent representation in the EU was ‘Voice of Business in Europe’, in 2007 they
changed their name into BusinessEurope but their slogan staid the same. The big businesses
realised the potential economic significance of the Single Market and started to organise their
interests. The most visible expression organisation of interests was the European Round Table of
Industrialists (ERT) in 1984. It brought together 17 of Europe’s largest industrialist with the
prime objective of lobbying the creation of the European Single Market (Coen, 1997). In 1985,
33
the Commission published a comprehensive blueprint and timetable for welding together the
fragmented national markets to create a genuinely frontier-free Single Market by the end of 1992.
Cowles argues that the ERT played an enormous role in setting the agenda for the Single Market.
She argues that for the first times CEOs of big companies organised themselves to address
European policy matters publicly in order to set the agenda for a Single Market (Cowles,
1995).The permanent presence of the big businesses in the EU became evident and today the
number of offices in Brussels of big firms is almost uncountable.
The SMEs interest representation, on the other hand, did not Europeanize automatically as the big
businesses did. They needed the support of the Commission to sponsor two ‘contact groups.’
These two contact groups, called ‘EUROGROUP’ and ‘ESME’, allowed SME representatives to
work properly at a European level. However, ESME was quickly (after two years) wound up
because the members stepped out. The EUROGROUP was not a big success either. UNICE also
attempted to represent the interest of SME trough a separate department. However, the reality
showed that the larger sector federations and big companies dominate the agenda of UNICE
(Cowles, 1996). Eventually, a real lobby-group for the SMEs stood up. But, again, this was not
an easy operation. UEAMPE was established in 1980; it was together with EUROPMI the voice
of small businesses in the EU. EUROPMI and UEAPME merged under pressure of the
Commission in 1998. However some disaffected members of EUROPMI formed a rival
organisation called ESBA in 1998. The discord between UEAPME and ESBA: “revealed once
again the tension in the politics of small business representations” (Coen & Dannreuther, 2002).
In comparison to the access of larger business interest representatives organisations, as the stated
UNICE and the Brussels office of big firms, the SMEs access was underprivileged. Coen &
Dannreuther argue that: “… it has been a failure of the small business sector to organise in a way
that has been seen as legitimate by the Commission and the policy-making community of the EU.
This failing has essentially been in the organisational form of representation that SMEs have
taken.” (Coen & Dannreuther, 2002). This is in contrast to the big European firms that
Europeanized individually: the government affairs departments in firms recognised that it was no
longer enough merely to monitor the progress of European directives and to present occasional
positions to the Commission. Rather, successful European lobbying involved the establishment of
an organisational capacity to co-ordinate potential political alliances and to develop and reinforce
existing political channels. In terms of achieving a position for lobbying directly, the most
effective means was to develop a broad political profile across a number of issue domains and to
34
participate in the creation of collective political goods to establish a political reputation (Coen,
1998).
In sum, a product of this difference in organisation capacity was (is?) the lack of one, uniform
interest group for the interests of SMEs. UEAPME is now the most known lobbygroup for SMEs,
but it was not until 1998 that, with the help of the Commission they were pushed to have this
status. Although significantly less salient, ESBA is also a lobby group for SMEs: this illustrates
the fragmentation on the side of SME interest representation. This is confirmed by Dür and
Mateo, who found that the material resources are related to the extend a business association is
Europeanized (Dür & Mateo, 2013). Because SMEs have fewer of these material resources, they
are less able to Europeanize.
If I apply the prior on my cases in my research I can see that lobbying for the SE could have been
done in an uniform way. The larger firms (for which the SE is meant) have an established and
streamlined way of lobbying. They are organized in an organisation that has a lot of experience
(UNICE). Moreover Coen, Coen & Dannreuther and other have shown that the large firms lobby
individually also. The SPE (that is meant for SMEs) on the contrary is faced with fewer
resources, less experience (UNICE was founded in 1958, UEAPME in 1980), no powerful
enterprises to back them up (as UNICE has the ERT). The companies of UEAMPE do not have
to capabilities to lobby individually. The SPE-proposal was thus not pushed and promoted by a
strong, unified corporate lobby as was the case in the SE-regulation. This can be formulated in
following hypothesis:
H3: THE SME-INTEREST REPRESENTATION IS NOT AS ORGANIZED AS THE LARGE BUSINESS
LOBBY. THEREFORE, THE SMES-INTEREST REPRESENTATION DID NOT MANAGE TO MOBILIZE,
IN THE SPE-CASE, AS EFFICIENTLY AS THE BIG COMPANIES DID IN THE SE-CASE.
9.5 Hypotheses, General Overview
I have formulated three different hypotheses. One states that the trade-unions learned from the
SE. The second hypothesis argues that the trade-unions of the corporatist Member States rolled
out and mobilised more extensively than in the SE-case. The third hypothesis focusses on the
capabilities of the SMEs to organize themselves. The interviews will help me to confirm or
disconfirm the hypotheses.
One should bear in mind that I try to have an overall image of the difference in mobilisation in
the SE- and SPE-case. As I mentioned in the methodology part: the difference in mobilisation is
35
not measurable directly. Process-tracing, i.e. my hypotheses allow me to have a good image of
what the difference is. The smoking-gun test also imply that these hypotheses are not mutually
exclusive, rather they complement each other. Furthermore, these three hypotheses are relevant:
they originate from the literature (learning), they explain why Member States voted against
(corporatism) and focus on the singularities of the two proposals (SMEs ↔ large enterprises).
Other hypotheses about mobilisation can be formulated, however; I believe they will resemble
the previous hypotheses. So, researching these three hypotheses allow me to draw overall
conclusions but do not cover the whole aspect of difference in mobilisation both cases.
10 Results
In the following section the result of my interviews together with the analysis of position papers,
official documents, etc… is elucidated. I will elaborate on every hypothesis separately and draw a
final conclusion after shortly discussing the upcoming proposal of a Single Member Company.
10.1 Evaluation ‘Learning’ Hypothesis
Based on the organizational learning theory, the single-loop learning means that the trade-unions
detected an error about the SE and corrected it. The double-loop learning means that the
organisation questions the values and policies that led to the SE in the first place (Argyris &
Schön, 1978).
10.1.1 Single-loop
Let me begin with single-loop learning. Once the SE in place as a regulation the trade-unions
realise that their goal was not attained. The workers’ participation was not brought to new parts
of Europe where previously there was no participation. The workers’ participation did not grow
but was frozen instead and used as a vehicle to avoid workers’ participation. Out of the 1379 SEs
created in 2012, only 219 could be identified as normal SEs. The rest are for the greatest part
strange and Czech forms of companies. Is the distrust in the SE noticeable in the communication
and interview with ETUC? Did ETUC ‘detect an error'?
Certainly they did, first of all the original position of ETUC was in favour of the SE: ‘In the view
of the ETUC the European SE gives rise to new opportunities for both sides of industry. … But it
is also the first opportunity for involvement of all SE employees subject to the same European
standard of information, consultation and participation. This is the reason why the European
trade union movement welcomed this new legislation in October 2001 as a historic achievement
on the road to improved industrial democracy and civil society in Europe’ (ETUC, press release
36
08/10/2004). The revision of the SE by the Commission changed the positive tone drastically and
switched to a more defensive tone. In the ETUC resolution on ‘Workers participation at risk’
(what is in a name?), ETUC: ‘demands that the EU respects board-level representation in the SE,
SCE and SPE.’ The ETUC congress demanded also: ‘that a legislative general framework
instrument be developed to achieve better coherence in the rules on workers participation for SE
and SCE companies.' (Resolution ETUC congress, 7-8 December 2011). The ETUI wrote a
conference reader of 45 pages on the revision of the SE (title: Workers’ participation a ‘burden’
on the European Company?). In this report they strongly criticise the Ernst & Young report that
was drawn up on behalf of the Commission: ‘the emphasis put, in E&Y report, on the supposed
negative role of employee-participation contributes to conserving the myths about participation
in the EU’ (Cremers, et al., 2010). The report demands a solution on the activation of shelf SEs
and the ‘invitation’ to circumvention of employee involvement: ‘existing loopholes to escape
participation must be addressed.’
The written evidence indicates that single-loop learning from ETUC of the SE-case, but did the
interview also point to this? The answer is definitively ‘yes.’ Severine Picard of ETUC (hereafter
simply ETUC) denied at first the fact that ETUC as an organization possibly learned from the SE.
ETUC reiterated in the interview that they are in favour of a European wide legislation on
workers participation, that is why they supported the idea of an SE very much. However, when
the case of Allianz comes up, ETUC says: “it is true that in the SE the level of participation can
be lower than the national legislation, but the SE introduces a European wide participation, and
that is what we wanted to attain” 16
. The question ‘Is the SE a success for you?’ indicates that
ETUC indeed detected some serious flaws in the SE. ETUC answered: “Well the SE is not
entirely a success, we realized a phenomenon that nobody expected, many shelf SEs have been
created without employees. What we are afraid is going to happen is that they are going to be
sold and then activated. In the SE, there is no ‘adaptation clause’: there must be negotiation with
the employees before establishing the SE, but Shelf SEs do not have employees. The SE does not
say that when there are significant changes in the company the participation must be
renegotiated. There is a serious gap in the legislation [Il y a un sérieux trou dans la législation],
and we want the Commission to change this with a revision. They are is still hesitating to do
this.” Also, according to ETUC there is: “no method of sanctioning an SE that was formed
without an SNB and previous negotiations.”
16 Note: the interview was in French at the request of the interviewee, everything quoted is literally translated
37
The same conclusions can be drawn from the interview with Mikael Stollt of the ETUI (hereafter
simply ETUI), first: “the SE was a historic compromise, it was not a dream came true for the
trade-unions but it was nevertheless the highest possible standard yet.” About the rearrangement
of the board in the Allianz-case17
: “there are two ways the SE can indirectly reduce workers’
participation. The first is to lower the number of seats in the board, like in the Allianz-case. Is
this a reduction in participation rights? That is a question of definition; it is certainly not a
strengthening. The second way are many companies in Germany just under the 500 and under
the 2000 employees changed from national company form to an SE to avoid participation, again
this was not a mass-evasion but it was significant.” An example of this is the case of GfK in my
hypothesis. The ETUI also denies in first instance the fact that they learned, from the SE, but
many explanations lean towards learning: “First there is no mechanism to sanction an SE that
did not have negotiations before the conversion. Second the SE-regulation did not foresee the
‘structural changes.' It only deals with the setting up of the SE not the evolution. ETUC did not
foresee ‘what if they were no employees in the beginning’ and the company grew later on. Also,
the ‘freezing’ of the employee-participation as I explained with the German companies on the
edge of participation was not foreseen by the regulation. We asked the Commission to revise the
regulation but they came up with a ridiculous report of E&Y and still didn’t move” The interview
with ETUC and ETUI shows that there is single-loop learning, a fault was detected and tried to
be rectified.
10.1.2 Double-Loop
I have proof of the single-loop learning, but also the double-loop learning can be confirmed. In
many position papers about the SPE, ETUC ‘strongly opposes’ the proposal for an SPE (ETUC,
SPE must respect workers’ participation rights, 15-16 October 2008). Framing the possible
escape of workers’ participation rights as the main issue: ‘ETUC cannot accept that the SPE-
statute becomes an empty shell, avoiding the issue of employees’ participation.’ This is also
confirmed in the interview. When I mentioned the SPE in the interview, ETUC answered: “it is
totally absurd of the Commission to propose a legislation without any compromise on workers’
participation.” I find here that an 180° degree change of attitude of ETUC occurred compared to
the SE. The SE was an ‘opportunity’ for ETUC to harmonize workers’ participation rights. Even
the freezing of participation levels in some German SEs is for the ‘greater good’ of
Europeanization of workers’ participation. Contrary to the latter, the SPE is not an ‘opportunity’
17 See 9.2.2 board went from 20 to 12, but still with ½ employees on the board.
38
but a threat from start. Instead of wanting to shape the European workers’ participation
legislation like ETUC did with the SE, they are closing down and want to protect the national
systems. ETUC states in the interview: “the SPE will be used as a substitute instead of the
national status and, [en plus], we do not have a guarantee it will be used for SMEs. Also, big
companies can use the SPE-status. The SPE creates just another status companies can adopt to
avoid workers-participation. The SPE complicates further the European company-law landscape,
and that is an advantage to the ones who take advantage of it.” The last argument (also large
companies can use the status) is inspired, I believe, on the negative experience with the Shelf
SEs. ETUC stated they suppose that the shelf SEs will be sold to avoid workers’ participation.
The SPE brings a new form that can be used to avoid workers’ participation. ETUI confirms the
double-loop learning by stating: “indeed this is maybe the learning-experience from the SE: ‘if
you are not covered from the beginning you will not be covered afterwards’ this means that an
SE that grows from 300 to even 10.000 employees will not be obliged to introduce board-level
representation. I think this is why the DGB saw a huge potential of participation escape with the
SPE” On the Shelf SEs: “the SE is a good regulation for companies like Airbus or even Allianz
but there are only 100 companies that you could really categorize as appropriate for the SE.
Without the German ones that just want to freeze the participation you end with 70 real SEs. All
the rest of the 2000 SEs are strange and bizarre forms of companies! The ETUC did not want to
introduce a status that creates even more bizarre forms”. It is clear out of the interviews; ETUC
and ETUI learned from the experience of the freezing of employees and Shelf SEs. They applied
it to the SPE; double-loop learning occurred.
The former can in some way be confirmed by my interview with the DG Markt. The anonymous
source (hereafter simply: DG Markt) confirmed that: “compared to the SE, the trade-unions were
much more aggressive when mobilizing for the SPE.” The DG Markt puts the responsibility of
the failure of the SPE on the shoulders of ETUC: “the proposal lacked unanimity in the council,
but this is rather normal. When you look at the proposal, the trade-unions18
are responsible for
pushing for European wide general rules on workers’ participation, they knew the countries like
the UK and Poland would never agree with this. Ultimately trying to bury the proposal.” It is
clear that the relationship between DG Markt and ETUC have gone sour. This came out also
clearly of the interview with the ETUC. ETUC blames the DG Markt to want to eradicate
workers’ participation in Europe: “the DG Markt believes that workers’ participation is making
our companies less competitive. That is also why they proposed the SPE-proposal, it is a new
18 He never wanted to say ‘ETUC’ always some trade-unions
39
attempt of the DG Markt to break down the system of workers’ participation in Europe.” The DG
Markt is also blaming the workers’ participation for the lack of SEs, based on the Ernst & Young
report, according to ETUC. A position that upsets ETUC, ETUC believes “workers’
participation helps enterprises do what is right.”
The ETUI links in the interview very well the aspect of learning and the relationship gone sour
between the DG Markt and ETUC: “the expectations at the ETUC that something good is coming
from the Commission in terms of workers- rights or participation is non-existent. The
Commission has a clear objective, and that is to get rid of cross-border obstacles, especially for
SMEs, and sees the participation as a burden for the company and a burden to growth. All the
worries the trade-unions have and the worries are indeed also based on the experience with the
SE, are that if we now have the next tool [SPE], we might again have problems with participation
and even bigger ones.”
10.1.3 Conclusion learning
I can conclude out of the interviews that the SE still consists of some dangers and flaws like the
non-sanction of not putting up an SNB, the Shelf SEs and especially the case of ‘structural
changes’ (if you are not covered from the beginning you will not be covered afterwards).
According to ETUC and ETUI, these have to be rectified (single-loop). That is why they are
asking for a revision of the SE. The Commission is currently not willing to revise the SE. ETUC
and ETUI noticed that the SPE can also be used for large enterprises. ETUC and ETUI both said
literally: “the SPE can be used as ‘a new tool’ to avoid workers’ participation in Europe.” The
‘former tool’ are the Shelf SEs and the SEs that have a low amount of employees when
established and increase in the number of employees afterwards. These were not foreseen by
ETUC and ETUI. Moreover the compromise made during the SE (before/after) has been replaced
in the SPE by a hard demand for European-wide workers’ participation legislation. As the DG
Markt said, this European-wide legislation is very unrealistic. With the proposal of the SPE the
perception is, with what they learned from the SE, that the Commission only proposes regulations
to abolish workers’ participation (double-loop).
10.2 Evaluation ‘Corporatist Interest Group Mobilisation’ Hypothesis
I hypothesised that the trade-unions from corporatist member states mobilised more extensively
against the SPE. The SPE touches upon certain features of the corporatist state, especially the
mandate of trade-unions in the corporatist Member States. I found that there is a connection
40
between the level of corporatism and the level workers’ participation. As the SPE could start a
competitive deregulation in workers’ participation between Member States (difference between
registered seat ↔ real seat doctrine19
), it touches mainly upon the system of the workers’
participation in the corporatist states. Furthermore, the competitive deregulation would occur in a
policy domain that involves 99% of the companies and 70% of the jobs in the EU. Large
enterprises account instead only for 1 % (the case of the SE). Lastly, the SE responded to the
need of trade-unions of corporatist member states, creating a ‘window of opportunity’ and the
SPE does not respond to a need, it is just seen as a threat for unions of corporatist Member States.
The hypothesis would have been confirmed if I showed out of the interviews that the DGB or
Scandinavian trade-unions were more active in the SE than in the SPE-case. Alternatively; that
trade-unions of corporatist Member States were more active compared to non-corporatist unions.
However, this was, unfortunately, not answered clearly and unambiguously. The DGB repeated
that the mobilisation of trade-unions in Europe is based on solidarity and thus that a distinction
could not be made on the basis of corporatism or other national characteristics. The assistant of
M. Malosse at the EESC (hereafter simply EESC) confirmed this in my interview 20
: “I did not
perceive a real difference between unions from corporatist and non-corporatist Member States.
The point is just that the DGB is one of the most resourceful trade-unions in Europe, they also
have a big office in Brussels. When the DGB mobilises many other join.” The same was true in
the interview with ETUC, although ETUC did say why the DGB was so prominent in the
discussion: “the SPE was important enough to provoke a general mobilisation. The DGB has
very good and close contact with their government, and that is very useful for us as ETUC. We
rely much on our affiliates that have good contacts with their governments like in Sweden but
also in the UK when there is a government in place that respects the trade-unions. This is not the
case with Cameron.” The ETUI said: “it is hard to compare the mobilisation in the SE and SPE,
because they are ten years apart. You cannot compare the DGB ten years ago with the DGB now
and the EU ten years ago with the EU now.”
Does this mean that my entire hypothesis can be declared unusable? I believe, out of the
interviews, that this is not the case. I did not take into account the ‘solidarity’ between trade-
unions. The solidarity of trade-unions in Europe makes it difficult to make a distinction between
trade-unions that come from a corporatist or a non-corporatist country. It is also difficult to
19 See 5.4 20
Interview was in French at the request of the interviewee
41
compare the difference in level of mobilisation because ETUC was in favour (as the other trade-
unions) of the SE. Why they mobilised so extensively against the SPE can be explained by
learning on the one hand but also by some of the factors brought up in my second hypothesis. I
gave three arguments why the SPE was an attack at the model. First the SE is a response to a
problem in the EU. The SPE is not a response to a problem but to use the potential of cross-
border trade for more growth. Second argument; the SE concerns only 1% of the companies, the
SPE about 99% of the companies. It affects the mandate of unions in a corporatist country.
Third, there is the matter of competitive deregulation that affects the corporatist Member States
to a bigger extend. The interviews confirm all of these arguments.
Regarding the first argument; the ETUI made reference in the interview to a study of Sebastian
Sick, he is part of the research-institute of the DGB (Hans Boeckler Foundation) (Sick, 2013):
“Sebastian Sick investigated large companies using a foreign company status to circumvent the
board-level representation in Germany. He found evidence of more and more companies doing
this. The most know case is AirBerlin that has no board-level representation at all because they
converted to a PLC [Public Limited Company, British company form]. It is not a massive escape
from the German system but a serious threat.” With the SE, the trade-unions were given a
window of opportunity to regulate this malign trend (with the SE-directive). With the SPE-
proposal, this mind-set changed 180°. ETUC was far less a demanding party for an SPE-statute.
That is because there are currently not many SMEs extending their production to other Member
States. Luc Hendrickx from UEAPME (hereafter just UEAMPE) confirmed this: “not many of
our members are currently involved in extending their production to other Member States. So if
they want to they will find a way.”
The second argument is certainly true as well. The ETUI states: “If you look at the Germany, it
has a big culture of co-determination and, on the other hand, they have a big culture of SMEs, so
instead the potential scope of this proposal is enormous in Germany. That is why I believe the
DGB and; therefore, Germany is worried about this proposal. The culture and the not too
positive experience with the SE in Germany explains the sensitivity of the SPE.” The scope of the
SPE is very large and implies policy fields that touch upon the core activities of the trade-unions.
The third argument can be linked to what ETUC said in the findings of the learning hypothesis:
“the Commission only aim is to abolish workers’ participation in the EU, as they find it a burden
to growth of SMEs.” The Commission plays a great role in the deregulation according to
ETUC/ETUI. ETUC fears the Commission is only proposing legislation for inducing competitive
deregulation, the deregulation of workers’ participation. ETUC also admitted that: “separating
42
the seats as is done in the SPE [registered seat doctrine] is basically the same as using a foreign
company form to avoid workers participation” or “the SPE could be used as a substitute instead
of a national company form.” The use of the SPE will thus only enhance workers’ participation
avoidance, according to ETUC and ETUI. This will only stimulate the discussion of abolishing
workers’ participation on the continent. The interview with EuroChambres also confirmed the
argument of competitive deregulation: “if you can choose where to put your company, as this
status is will enable, countries will try to have the most favourable regime to attract these
companies even if it does not always employ many employees. Why? Because you promote the
legal culture of your country and off courses also your lawyers.” One could argue that the SE did
not induce competitive deregulation in workers’ participation, though it deemed possible. This is
correct, however, the workers’ participation debate is ongoing in Germany (Baums & Frick,
1997; Krause, 2012). The SE could have played a role in starting this debate.
In sum, the division of corporatist and non-corporatist Member States was not confirmed. This is
because the division is difficult to make. More than I expected the trade-unions in Europe are
well coordinated and solidary. However, the arguments I made that led to the hypothesis have
helped me shed some light on the SPE. I conclude out of the interviews that not just learning was
important to explain the difference in mobilisation. The scope of the directive, the possibility of
competitive deregulation and difference in ‘need for the statute’ (solution to a problem ↔
exploiting the potential) were, besides learning, other factors that triggered a different
mobilisation.
10.3 Evaluation ‘Capacity of SMEs to organize’ Hypothesis
The third and last hypothesis departs from a different starting point compared to the previous
hypotheses. It does not focus on the ‘success’ of the trade-unions to mobilise against the SPE.
Rather, its starting point is the failure of the corporate 21
interest mobilisation side to lobby in
favour of the SPE-proposal. The hypothesis suggests that the SE is for large companies, they
have more resources and better organisation ability, so they managed to mobilise effectively. The
interest representation of SMEs has always been, as I concluded from the literature, less efficient
and streamlined as the interest-representation of large companies. The SMEs did not always have
the necessary resources for a decent representation. The last hypothesis focusses in the interviews
with an anonymous source in EuroChambres (hereafter simply: EuroChambres) and the
21
Note I mean corporate (affiliated with business), not corporatist (model of society as in 9.3)
43
UEAPME on the organizational capacity of the SMEs. The EESC gives me more information on
the corporate lobbying in the SE.
The interviews with UEAPME and EuroChambres confirmed the hypothesis. UEAPME stated
that his interest group was, in the beginning, not interested in the proposal: “we knew as
organisation that the SPE would open the box of pandora and that there would be a lot of
reaction from the trade-union side especially on the issue of workers’ participation.” This is
surprising because the position-paper of UEAPME said that further efforts should be made to get
an agreement on the current SPE statute proposal: ‘further efforts should be made to get an
agreement on the current SPE statute proposal. Despite some shortcomings to be redressed in the
next months, the 'Small Business Act' [SPE part of SBA] has the potential to shift SME policy up
a gear’ (UEAPME, Position Paper: UEAPME position on the Future of European Company
Law, 12 May 2012 Brussels). That is why my rationale was the full support of UEAPME for the
proposal.
UEAPME explained the previous. When the proposal of the SPE came out the UEAPME did a
survey among their members the result was: “our members did not believe that the SPE is
something needed at this moment for the completion of the internal market. ‘We have other
priorities,’ said our members. So when we look at the reality of the SMEs world, we see that very
few of our SMEs engage in cross-border mergers, subsidiaries, etc. A SPE-proposal was just not
needed for our members.” When the Commission ask the support of UEAPME for putting the
SPE as a priority UEAPME answered: “we said very honestly NO, because this is not a priority
for us. It is not with the creation of the SPE that we will solve the problems of the SMEs in the
internal market. Other priorities for the SMES like the obtaining permits in other Member states
or technical obligations were in front.” The advantages put forward by the Commission are also
very relative for UEAPME: “the great advantage is the saving of judicial costs, but these costs
we will have to make anyway. If it is not for a French lawyer that explains the SARL , it is an
expensive European lawyer that explains the SPE and in the end you will still need to set up the
statutes. Our members said: even without the SPE we will manage. Other burdens are a priority.
We are not against the SPE but we manage at this moment.” In conclusion, the stand of
UEAPME was: “all the better if the status is coming if not, it is not a disaster.”
EuroChambres, on the other hand, was a big advocate of the status: “the project was really a
project of the chamber of commerce of Paris and the MEDEF; therefore, it came to us. And,
therefore, it became a project of the chambers of commerce.” Nevertheless not all the members
of EuroChambres seem to be a proponent of the legislation: “the chambers of commerce pushed
44
the dossier, we had much contact with the permanent representation of Belgium, Germany,
Sweden, etc. One problematic case was the chamber of commerce of Austria that had the same
position as its country; it did not support the SPE they had some issues with the minimal required
capital.” EuroChambres explains that the main problem they perceived of ETUC was22
- as
ETUC explained- the ‘structural changes’: “the trade-unions had some problems with the issue of
participation when an enterprise grows from 20 to 200 and beyond. We as EuroChambres
believe it is the goal of every business to grow and eventually become larger than 200, 500, …
employees. If we need to change the status every three years, …. this complicates things.”
In the case of the SE-regulation and mobilisation the UEAPME did not play a role. I explained in
the hypothesis that UEAPME was not yet fully organised. EuroChambres, as they confirmed in
the interview, was active in the SE, but most activity came from UNICE and afterwards
BusinessEurope. The activity is confirmed in the EESC-interview: “the SE was supported by the
employers organisations, but also pushed forward by the ERT.” If I take a quick look at the 50
members of the ERT I see that: e.g. AIRBUS, BASF, SAINT-GOBAIN, BP, E.ON have made use of
the SE-form.
Judging the hypothesis is not as easy as I thought because of the slightly odd position of the
UEAPME. They did not fully mobilised for the proposal because, UEAPME mentions it a dozen
times in the interview; it was ‘not a priority’ for them. Nevertheless the UEAMPE was never
against it, the interview and their position paper proves this. The real position of UEAPME can
best be represented with following quote: “all the better if the status is coming, if not, this is not a
disaster.” I believe their stand answers my hypothesis. As mentioned previously the UEAPME
is the lobby group of SMEs and SMEs do not have the same resources as the larger enterprises.
UEAPME did not have the resources to focus on the SPE, although they were a proponent. The
UEAPME states that the SPE ‘opens the box of Pandora’ and that there will be much resistance
from the side of the trade-unions. Mobilising ‘against’ the trade-unions takes a lot of effort and
time, and, therefore, a lot of money. In sum, it was not worth mobilising for as the members did
not need it immediately, and the resistance was high. The UEAPME has only the resources to
mobilise for its priorities. The SPE was not a priority but still something useful. With more
resources, they could have lobbied for the SPE together with other priorities. When the
Commission launched the proposal of the SE, resistance also came from the trade-unions. A
compromise was found after 40 years; this must have been very expensive for the interest-groups
involved. I believe UEAPME is bound by their lack of resources to invest in a prestigious project,
22
EuroChambres says they did not have contact with ETUC
45
as the SPE, they know is going to be intensive and costly. Instead, the UEAPME is investing its
time in smaller dossiers to improve the positions of SMEs. These smaller, technical dossiers are
more cost-efficient and less time-consuming.
Off course, resources are one thing, organization is another. The hypothesis suggests the SMEs
have a lack of organizational capacity. In this proposal, there was indeed a lack of organization
on the corporate side. First, UEAPME seems not to have the resources to put it on their priority
list. Second the biggest proponent was BusinessEurope, I assume they have the budget to make
the SPE one of their priorities. BusinessEurope asked UEAPME to form a coalition, UEAPME
answered: “the Commission and BusinessEurope asked us to support the proposal as a priority
for SMEs. .. We said to both: ‘sorry NO, we do not play that game.’ We were willing to say that
we were in favour of the proposal but not that this was a priority for us. Simply because we make
our own priorities and don’t let BusinessEurope or the Commission tell us what to do.” The need
for distinct profiling towards its members and the entangled history are reasons for UEAPME not
to follow BusinessEurope blindly. As said in the hypothesis explanation, BusinessEurope
dominated the scene of business associations representations until approximately the year 2000
(Dür, 2008a).
Second, EuroChambres said that their Austrian member was against the proposal. They followed
the position of their country. About workers’ participation EuroChambres stated following: “we
did not have a position about the workers’ participation. We fought essentially on three different
points: minimal capital requirement, the registered seat and the formation. However we did not
mobilise on workers’ participation, we felt it was not our duty as a chamber of commerce to
intervene in that discussion. You know; some of our chambers are public some are private so, it
is sensitive to intervene. In a certain way we also represent the public interest via the public
chambers.”
Finally, UEAPME and EuroChambres had some difficulties with the argumentation of
BusinessEurope. UEAPME said: “BusinessEurope is trying to sell the proposal as it is made
especially for SMEs. Well, that is not correct, this statute is also accessible for big companies
and is an improved SE-status. It is good if the status came, but please don’t say that it is made in
the interest of SMEs.” Same could be heard at EuroChambres: “ the purpose of BusinessEurope
was to create the SPE was for its subsidiaries. That is why they were pushing for it.”
In sum, the hypothesis is confirmed. The corporate side was not aligned at all. UEAPME stated
multiple times it was not their priority, but they supported it. They said it was going to provoke
too many responses of the trade-unions, especially on workers’ participation. I conclude out of
46
this ‘non-priority’ the lack of resources the UEAPME is faced with. It wants to focus on smaller,
more feasible technical burdens. It has no resources for a long and costly turf war with the trade-
unions. EuroChambres did actively mobilise for the proposal, but not all members agreed
(Austria). Moreover, they remarkably did not intervene in the workers’ participation discussion.
It seems not unthinkable that also EuroChambres did not want to invest in a very sensitive dossier
as workers’ participation. Both EuroChambres and UEAPME criticized the mobilisation of
BusinessEurope. They argue that BusinessEurope wants the statute for larger companies and that
they sell it like it is for smaller SMEs. I believe here, the division ‘BusinessEurope (UNICE) ↔
SMEs’ becomes tangible. Is BusinessEurope also really representing SMEs? Nevertheless, these
disparities are in an outright contrast with the solidarity of trade-unions that came up in the
previous hypothesis.
10.4 General Findings: Summary and Limitations
The research I have conducted provides a better understanding of the finalities of the SE- and
SPE-case. Before summarizing the findings two things should be noted. First, I focused mainly
on the difference in mobilisation of interest groups as a cause for the failure of the SPE compared
to the SE. Although many sources indicate the mobilisation was crucial in the SPE withdrawal
(Hommelhoff & Teichmann, 2012), one have to bear in mind that other factors besides
mobilisation could have played a role23
. As the ETUI stated in the interview, the SE is being used
to move assets around Europe for the purpose of tax-evasion. According to the ETUI, the SPE
could have worsened this trend24
. It is important to take into account other factors, other than
mobilisation (e.g. tax-evasion or the lack of political will) that could have been decisive.
Mobilisation is one piece of the SE-SPE puzzle I researched, other pieces still have to be
examined. The second note is classic in the interest group literature and must, therefore, also be
reckoned with in this research. It is very difficult to uncover the real influence position of an
interest group in European decision-making. My interview and analysis provides a clear insight,
but influence is argued to be very difficult if not impossible to measure (Dür, 2008b). Not all
cases where interest-groups were active proved to have an impact of these interest groups
(Burstein & Linton, 2002). I could have, for example, overestimated/underestimated the position
of some of the interest groups. This being said; I do believe that the balanced interview scheme
23
The schematic overview , in (6.3) p. 16 illustrates this 24
SE used for tax-evasion, fear of SPE worsening the trend: is this also learning from the SE?
47
(two trade-unions, two corporate interest groups and two institutions) gave me a good idea of
what the role and position of interest groups were in both cases.
Despite the limitations listed above, my study did bring up three relevant conclusions on the SE-
and SPE-case: the trade-unions learned from the SE, the trade-unions fear competitive
deregulation with the SPE-proposal, the SPE-proposal did not have a well-organized corporate
interest-representation.
First of all, when the SE-regulation and the directive on workers’ participation came out the
trade-unions were pleased with this. A European-wide framework on workers’ participation was
set up for large enterprises and workers’ participation was anchored in the acquis. However the
practical outcome of the SE proved to be not very successful. Instead of enhancing workers’
participation in Europe, the ‘freezing’ of employee participation by companies on the verge of
more participation was observable. Even more of a problem for the trade-unions was the creation
of an abundance of shelf SEs in mainly the Czech republic. Shelf SEs are a bizarre from of SE
that can be activated, sold and afterwards used to evade workers’ participation. The trade-unions
tried to rectify this by pushing for a revision. Afterwards, they were very cautious with the SPE.
The SPE could complicate even more the issue of workers’ participation in European companies.
Moreover, it could be used as ‘a new tool’ to avoid workers’ participation in Europe. That is why
a ‘framework-directive’ as in the SE was not enough for the trade-unions; they wanted, as the DG
Markt confirms, European wide precise rules on workers’ participation. The trade-unions learned
that a compromise with reference to national law does not protect them sufficiently. However,
these European wide high standards for workers’ participation is unacceptable for many Member
States. The rectification of the SE and application of the experiences of the SE on the SPE-case
fits the single- and double-loop learning concepts of (Argyris & Schön).
Secondly, the competitive deregulation in workers’ participation is a serious threat for trade-
unions. The registered seat doctrine in the SPE proposal and the many references to national law
on workers’ participation give the opportunity for SMEs (but also large enterprises) to put your
seat in a Member State with the lowest level of workers’ participation. To promote the legal
culture and lawyers of a Member State, Member States can be tempted to down-grade the level of
participation. Deregulation could also have occurred with the SE, but the scope of the SPE-
proposal is much greater. The SPE-proposal affects all SMEs, and they account for 99% of the
businesses in the EU. Besides the scope also the lack of necessity explains the unwillingness of
the trade-unions. The relocation of large firms in Europe was already a growing trend in the EU
(Sick, 2013). Therefore the creation of an SE-status, and the associated SE-directive could
48
regulate this trend somehow. The SPE-status was proposed to ‘increase the level of cross-border
trade’ and for the growth of SMEs. UEAPME stated many of its members did not engage in
extending their production to other Member States. The extended scope and the lack of urgency
make that the SPE-proposal is a risk of deregulation trade-unions are not willing to take.
Because I found that workers’ participation is linked to the level of corporatism of a Member
State. It seemed logic that the fear of competitive deregulation of workers’ participation was
bigger in corporatist Member States within corporatist trade-unions. But the division between
corporatist and non-corporatist is hard to make in this case. The EESC, ETUC and the DGB
stated that the solidarity between trade-unions makes it impossible to categorize a trade-union as
(non)-corporatist. Especially when the DGB mobilises many, if not all, trade-unions follow.
Thirdly, the solidarity between the trade-unions in the SPE-case is in great contrast to the
alignment of the corporate interest-groups. When you compare the interest-mobilization in the SE
and SPE-case, a big difference in the organisation of the corporate side is observable. With the
SE the ERT and BusinessEurope lobbied in unity. The interest-group who represents the
constituency for whom the SPE-proposal is meant (UEAPME) did not put for the 100% its
shoulders under it. EuroChambres, on the other hand, did not intervene in a major issue of the
proposal: workers’ participation. As suggested in the literature, the SMEs representation was not
well coordinated.
11 Single Member Company
The results of the my SPE-research, make the Single Member Company (SUP) very interesting. I
will not go into detail on the SUP because it is, as the SPE and the SE, very extensive. Moreover,
the proposal is very recent. On the 9th
of April 2014, the Commission announced they will launch
a proposal for the SUP. The reason I decided to bring it up is because the experts I interviewed
mentioned it regularly during the interviews.
The initiative on the Single-Member Company follows up from the negotiations on the
establishment SPE. A Single-Member Company is a company that has a sole member when it is
formed and also when all its shares come to be held by a single person. The effect of the directive
is to create a harmonised company law form across all Member States that all companies could
theoretically use. The key elements of the proposal: Member States would be required to provide
in their national legislation a company law form for single-member private limited-liability
companies with the same requirements across the EU. It would have a common label (Societas
Unius Personae (SUP)). Member States would have a choice of how to introduce such a
49
company form, e.g., by creating an additional form of single-member companies or by replacing
an already existing form with SUP. Member States would be obliged to allow for direct on-line
registration of SUPs, without the need for a founder to travel to the country of registration for this
purpose.
The MEMO of the Commission that announced the coming SUP-proposal contains a section: ‘In
what ways is this proposal different to the proposal for a European Private Company statute?’
The Commission answer is the following (European Commission, MEMO/14/274, Brussels, 9
April 2014) :
- First, the proposal focuses on the harmonisation of national laws and thus avoids the
creation of a new legal from at European level which would exist independently from
national law with all the complexities that entails.
- Second, the proposal is limited to harmonisation of those areas of national law which
are essential to reduce the burden associated to setting up a company. The other areas of
company law, which are less relevant to this objective but which proved to be contentious
in the negotiation on the European Private Company Statute, are left to national law.
It is clear ‘the other areas of company law, which are less relevant to this objective but
which proved to be contentious in the negotiation on the SPE’ refers to the workers’
participation.
My previous review of the SPE puts the proposal of the Commission of an SUP in a different
perspective. I can conclude the proposal will have very little chance of success. First of all, for
the trade-unions it is not the creation of a legal form (they agreed with an SE) that is an issue. It
is primarily the harmonisation of national laws on workers’ participation that forms a threat. The
Commission tries to avoid the discussion on e.g. involvement of employees, transfer of seat by
referring to national law. These are just the issues the trade-unions wants to see very well
regulated to avoid escaping workers’ participation. The reason for the demand of regulation very
strictly the workers’ participation can be learning, competitive deregulation, scope of the
directive, … All the same as with the SPE. Second, the Commission states: ‘the other areas
which are less relevant.’ This statement clearly shows the earlier mentioned cleavage between
the trade-unions and the Commission. The trade-unions feel that all the Commission wants to do,
is take-down workers’ participation in Europe. ETUC said about the SUP: “For us as ETUC it is
really frustrating to see the Commission trying to question the participation over and over again.
And this is part of an overall trend within this Commission, they relaunch and re-relaunch the
50
same debate, legal analysis, etc. all over again: is participation needed? Does it serve the
employees? … It is part of many attempts of this Commission towards deregulation. Attempts to
deregulate the ‘acquis social communautaire.’ And the story does not end here. Because the
Commission had to retreat the SPE-proposal, it is coming up with a new plan: the SUP. The SUP
resurrects the SPE but in worse [ressuscite la SPE… mais en pire]. In the draft of the article,
there is not a single article about workers’ participation. We will have to mobilize again, and it is
annoying because we need something for SMEs, and it is always ETUC the bad guy seemingly
mobilizing against SMEs interests. But the Commission is just really unrealistic, and that is
exhausting.” The ETUI shares the concern of the ETUC and says the SUP is just a remake of the
SPE. However, the ETUI is afraid that the new legal base25
of the SUP makes it easier for it to
become legislation: “QMV always mean some countries will have to stand up to say NO. If they
say NO to one thing, they have to say YES to another. It is not unthinkable that it passes; it
depends on other pending dossiers. That is just how European politics works.”
The concern of ETUC and ETUI is recognizable in my interview with DG Markt. DG Markt says
it does not simply push for deregulation but questions the whole participation discussion: “the
trade-unions are hanging on to workers’ participation but who says this really protects the
employees? In the end, they are still a minority in the board and decisions can be made over their
heads. I believe participation is not a good way to protect employees in Europe, it just holds on
to the old system of national sovereign company law. The trade-unions must stop defending this
status-quo, is slows down the European social project. You also see that in Germany many
question the concept of workers’ participation. I think the trade-unions just want to hold on to
their power position.”
The analysis of the SPE-proposal shows there are significant concerns of the trade-unions on
workers’ participation in the EU. The same concerns are categorized as ‘less relevant’ by the
Commission in the upcoming proposal of an SUP. In my opinion, it is clear that there is a
dialogue of the deaf between the Commission and the ETUC/ETUI. One thing is sure: the SUP
has very little chance to become legislation. Maybe a fresh start for the new Commission
(probably autumn 2014), the perception of the ‘deregulatory’ Commission can change, and the
SUP can be a clean sweep for European Company law.
25
As there are many references to national law, it touches issues that are decided upon by QMV
51
12 Conclusion
The upset of this research was to find out why there was a difference in mobilisation between the
SE and SPE. My study brought three relevant conclusions on the SE-and SPE-case. First, the
trade-unions learned from the SE. The SE formed mainly bizarre form of SEs (shelf SEs) of
which the trade-unions do not know the consequences. There is also the problem of structural
changes and the ‘freezing’ of workers’ participation. Second, the trade-unions (not specifically
the ones from corporatist Member States) fear the SPE will bring more, compared to the SE,
competitive deregulation. The extended scope and lack of urgency for the SPE fed this
discussion. Thirdly, the SPE-proposal did not have a well-organized and unified corporate
interest-representation, especially compared to the mobilisation of the trade-unions. The SE did
have a unified corporate interest mobilisation.
The previous findings give a clear image on how the mobilisation between both cases were
different. Finally, a last important conclusion must be made out of the interviews on the SPE-
proposal. The water between the trade-unions and the Commission on workers’ participation is
very deep. The distrust and frustrations on the side of trade-unions are enormous. The SE was a
historic compromise between what the Commission wanted and what corporate and trade-unions
wanted. However, it does not seem likely that such a compromise (especially on workers’
participation) is possible any time soon. The trade-unions have the perception that the
Commission only wants to deregulate workers’ participation. Therefore the unions pushed during
the SPE for high European wide standards of workers’ participation. A very controversial issue in
the Council. While the Commission blames the trade-unions holding on to the old sovereign
status-quo. The upcoming SUP clearly shows the discrepancy between what the Commission is
proposing and what the trade-unions want. First, instead of a revision of the SE, the Commission
comes up with an even more controversial proposal as the SUP. Second, the position of the trade-
unions on workers’ participation became more radical and the mobilisation more aggressive.
The previous shows, in my opinion, the limits Europe faces today for the creation of a social
Europe. A social Europe is limited (for the moment) not only by the sovereignty of the Member
States, but also by the differences in social models. The intention of the Commission is to
harmonise European company law, however the national social model is obstructing this. Both
burdens for a social Europe ( sovereignty and national social model) come up in the SPE-
proposal. Unfortunately only by harmonisation in an incremental way, the achievement of a
socially united Europe is possible. The SPE and SUP are not an example of incrementalism.
52
Regarding the SPE-proposal, I understand the position of the trade-unions and of the
Commission. I believe the European Company-from is one of the epitomes of the single-market. I
also believe workers’ participation is in decline in Europe. In Germany, there are real discussion
going on whether the workers’ participation is maintainable and not counter-productive.
However, on the other hand, the SE proved to be anything but a success. The Commission has to
listen to worries of the trade-unions, because as ETUC said it: “we rely very much on the trade-
unions that have a good connexion with their government.” I believe some trade-unions are still
influential in the relationship with their national government. Furthermore the unions wanted a
revision of the SE, but instead an SPE- and SUP-proposal popped up. It is conceivable the
proposal for an SUP is a slap in the face for the trade-unions.
However, out of the interviews I did not perceive an unwillingness of the trade-unions for a
supranational company form for SMEs, on the contrary. I understand a supranational company
form for SMEs can be a reality if the Commission has a constructive dialogue about workers’
participation; the other issues can be dealt with subsequently. Workers’ participation is the most
controversial issue for the trade-unions. Therefore, to paraphrase the presidential campaign
strategist of Bill Clinton in 1992, James Carville: IT’S THE WORKERS’ PARTICIPATION, STUPID!
53
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14 Appendices
14.1 List of interviewees
14.1.1 Face to face
Name of Organisation Name of interviewee
DG MARKT anonymous
EESC First assistant of M. Malosse
ETUC Mme. Severine Picard
ETUI M. Michael Stollt
UEAPME M. Luc Hendrickx
EUROCHAMBRES anonymous
14.1.2 E-mail
Name of Organisation Name of interviewee
DGB M. Rainald Thanisch
DIHK anonymous
Belgian Permanent Representation Mme. I. Lambreth
University of Würzburg Prof. Dr. Chr. Teichmann
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14.2 Interview Transcript
INTERVIEW GUIDE – Master Thesis
Societas (Privata) Europaea
BASIC INFORMATION ON THE INTERVIEW AND INTERVIEWEE
Name of interviewee:
Name of organization:
Phone number:
E-mail (if available):
Position in the organization during the past four years:
Position at time of interview:
Date of interview:
Place of interview:
Time of interview:
Interview carried out by Luyckx Jean-Michel
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Interest group Interview
Questions:
General
1. How come that for a similar legislation as the SE, the SPE discussions
have to start all over again?
2. How come so many successful SE’s are German (E&Y) ? What is the
role of workers participation in this?
Hypothesis 1
3. What does the case of Air-Berlin or Allianz tell you? What effect did
it have on the SPE?
4. (if Allainz and Air-Berlin does not say them anything: explain) Do
you think these cases in general influenced the SPE-discussions?
5. Do you consider the SE a success?
6. Was there more opposition of Trade-unions (ETUC, DGB,…) in the
SPE than in the SE case?
Hypothesis 2
1. Did you perceive the DGB as an influential interest group in the SPE
case? In the SE-case?
2. What is the role of domestic trade-unions in the SPE-proposal? Where
they active? Was it bigger than with the SE?
3. Were there coalitions between the DGB and other interest groups like
the Swedish, Belgian or Dutch trade-unions? In the SE, in the SPE?
4. Is the SPE a threat to the ‘social market economy’ of Germany? Why
(not)?
Hypothesis 3
5. Was there a consensus among corporate interest groups about the
usefulness of the SE? And about the SPE?
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6. Did you form a coalition for the SE proposal with other corporate
interest groups? And for the SPE?
7. Do you feel that the fragmentation on your side (BusinessEurope,
EuroChambres, UEAPME) was a disadvantage?
8. Was the mobilization in the case of corporate interest groups for the
SE-proposal more coordinated than for the SPE?
Concluding Question:
Do you think an SPE regulation is ever possible? How?
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15 Summary
Het Societas Privata Europaea, oftewel SPE, is een Europees supranationaal eenheidsstatuut
voor KMOs. Het statuut werd voorgesteld door de Commissie in Juni 2008 maar in November
2013 werd het voorstel alweer ingetrokken door dezelfde Commissie. Dit is merkwaardig want
een gelijkaardig statuut; het Societas Europaea, of simpelweg het SE, werd na 40 jaar
onderhandelen wel een verordening in 2001. Dit statuut is niet bedoeld voor KMOs, maar voor
grote bedrijven. Eenvoudig gesteld als het SPE over BVBA’s gaat, dan gaat het SE over NV’s.
Beide statuten zijn gelijkaardig, ze hebben hetzelfde doel en ambitie: het vergemakkelijken van
handel over de Europese grenzen heen. Maar ook de pijnpunten zijn hetzelfde:
werknemersparticipatie. Werknemersparticipatie is verschillend in elke lidstaat, een
supranationaal statuut brengt automatisch de vraag met zich mee: welk niveau van werknemers
participatie is er geldig in een SE of SPE?
Mijn thesis vraagt zich af hoe het komt het SE wel een verordening is geworden en het SPE niet.
Daarbij concentreer ik me vooral op het verschil in mobilisatie van belangengroepen tussen het
SE en SPE. Door middel van process-tracing en de daarbij horende interviews met ETUC, ETUI,
UEAPME, EuroChambres, het EESC en de DG Markt heb ik het verschil in mobilisatie
onderzocht.
In het onderzoek ben ik tot volgende conclusies gekomen. Ten eerste heb ik gemerkt dat
vakbonden geleerd hebben van het SE. Het SE is geen unaniem succes geworden en vooral de
zogenaamde shelf SEs zijn iets wat de vakbonden niet voorzien hadden. Deze shelf SEs kunnen
gebruikt worden om nationale wetgeving omtrent werknemersparticipatie te ontwijken. Ook heeft
de SE geen Europese standaard voor werknemersparticipatie gecreëerd. Integendeel het niveau
van participatie werd ‘bevroren’ of zelfs verkleint. Daarom dus dat de vakbonden agressiever
waren voor met het SPE. De tweede conclusie is dat vakbonden vreesden voor een competitieve
deregulering tussen landen omtrent werknemersparticipatie. De ‘zetel-doctrine’ van het SPE laat
bedrijven toe hun zetel van de productieomgeving te scheiden. Hierdoor kunnen bedrijven weer
werknemersparticipatie ontwijken door uit te wijken naar landen met een laag niveau van
participatie maar toch hun productie in de oorspronkelijke lidstaat te behouden. De derde
conclusie baseert zich niet op het succes van de vakbonden om het voorstel te blokkeren maar de
faling van de KMOs om op een uniforme en eendrachtige manier te mobiliseren. In tegenstelling
tot het SE, waar grote bedrijven wel eendrachtig naar voor kwamen, was dit voor het SPE niet het
geval. Zowel UEAPME als EuroChambres zetten niet voor de honderd procent hun schouders
onder het SPE-voorstel. Van een eendrachtige mobilisatie van KMO-belangen is er geen sprake.
Uit het onderzoek van het SE en SPE kan er dus weldegelijk gesteld worden dat er een verschil in
mobilisatie is. Maar een vierde belangrijke conclusie dient ook gemaakt te worden uit de
interviews. Als het SE een historisch akkoord betrof over werknemersparticipatie, zal deze niet
direct herhaald worden. Er is bij de vakbonden een groot wantrouwen in alles wat de Commissie
voorstelt over werknemersparticipatie. De vakbonden hebben de perceptie dat de Commissie de
participatie wil bannen uit Europa. De Commissie daarentegen, vindt de houding van de
vakbonden veel te oubollig en verwijt ze een gebrek aan langetermijnvisie. Deze tegenstelling
Commissie ↔ vakbonden is duidelijk te merken in het nieuwe voorstel voor een SUP.
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