Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees SECTION II

Article 3–Article 7・5 provisions

Article 3

Creation of a special negotiating body 1. Where the management or administrative organs of participating legal entities draw up a plan for the establishment of an SCE, they shall as soon as possible take the necessary steps, including providing information on the identity of the participating legal entities and subsidiaries or establishments, as well as the number of their employees, to start negotiations with the representatives of the legal entities' employees on arrangements for the involvement of employees in the SCE. 2. For this purpose, a special negotiating body representative of the employees of the participating legal entities and concerned subsidiaries or establishments shall be created in accordance with the following provisions: (a) in electing or appointing members of the special negotiating body, it shall be ensured: (i) that such members are elected or appointed in proportion to the number of employees employed in each Member State by the participating legal entities and concerned subsidiaries or establishments, by allocating in respect of a Member State one seat per each portion of employees employed in that Member State which equals 10 %, or a fraction thereof, of the number of employees employed in all the Member States taken together; (ii) that in the case of an SCE formed by way of merger, there are such further additional members from each Member State as may be necessary in order to ensure that the special negotiating body includes at least one member representing each participating cooperative which is registered and has employees in that Member State and which it is proposed will cease to exist as a separate legal entity following the registration of the SCE, insofar as: - the number of such additional members does not exceed 20 % of the number of members designated by virtue of point (i); and - the composition of the special negotiating body does not entail a double representation of the employees concerned. If the number of such cooperatives is higher than the number of additional seats available pursuant to the first subparagraph, these additional seats shall be allocated to cooperatives in different Member States by decreasing order of the number of employees they employ. (b) Member States shall determine the method to be used for the election or appointment of the members of the special negotiating body who are to be elected or appointed in their territories. They shall take the necessary measures to ensure that, as far as possible, such members shall include at least one member representing each participating legal entity which has employees in the Member State concerned. Such measures must not increase the overall number of members. The methods used to nominate, appoint or elect employee representatives should seek to promote gender balance. Member States may provide that such members may include representatives of trade unions whether or not they are employees of a participating legal entity or concerned subsidiary or establishment. Without prejudice to national legislation and/or practice laying down thresholds for the establishing of a representative body, Member States shall provide that employees in undertakings or establishments in which there are no employees' representatives through no fault of their own have the right to elect or appoint members of the special negotiating body. 3. The special negotiating body and the competent organs of the participating legal entities shall determine, by written agreement, arrangements for the involvement of employees within the SCE. To this end, the competent organs of the participating legal entities shall inform the special negotiating body of the plan and the actual process of establishing the SCE, up to its registration. 4. Subject to paragraph 6, the special negotiating body shall take decisions by an absolute majority of its members, provided that such a majority also represents an absolute majority of the employees. Each member shall have one vote. However, should the result of the negotiations lead to a reduction of participation rights, the majority required for a decision to approve such an agreement shall be the votes of two thirds of the members of the special negotiating body representing at least two thirds of the employees, including the votes of members representing employees employed in at least two Member States, - in the case of an SCE to be established by way of merger, if participation covers at least 25 % of the overall number of employees of the participating cooperatives, or - in the case of an SCE to be established by any other way, if participation covers at least 50 % of the overall number of employees of the participating legal entities. Reduction of participation rights means a proportion of members of the organs of the SCE within the meaning of Article 2(k), which is lower than the highest proportion existing within the participating legal entities. 5. For the purpose of the negotiations, the special negotiating body may request experts of its choice, for example representatives of appropriate Community level trade union organisations, to assist it with its work. Such experts may be present at negotiation meetings in an advisory capacity at the request of the special negotiating body, where appropriate to promote coherence and consistency at Community level. The special negotiating body may decide to inform the representatives of appropriate external organisations, including trade unions, of the start of the negotiations. 6. The special negotiating body may decide by the majority set out in the second subparagraph not to open negotiations or to terminate negotiations already opened, and to rely on the rules on information and consultation of employees in force in the Member States where the SCE has employees. Such a decision shall stop the procedure to conclude the agreement referred to in Article 4. Where such a decision has been taken, none of the provisions of the Annex shall apply. The majority required to decide not to open or to terminate negotiations shall be the votes of two thirds of the members representing at least two thirds of the employees, including the votes of members representing employees employed in at least two Member States. In the case of an SCE established by way of transformation, this paragraph shall not apply if there is participation in the cooperative to be transformed. The special negotiating body shall be reconvened at the written request of at least 10 % of the employees of the SCE, its subsidiaries and establishments, or their representatives, at the earliest two years after the abovementioned decision, unless the parties agree to negotiations being reopened sooner. If the special negotiating body decides to reopen negotiations with the management but no agreement is reached as a result of those negotiations, none of the provisions of the Annex shall apply. 7. Any expenses relating to the functioning of the special negotiating body and, in general, to negotiations shall be borne by the participating legal entities so as to enable the special negotiating body to carry out its task in an appropriate manner. In compliance with this principle, Member States may lay down budgetary rules regarding the operation of the special negotiating body. They may in particular limit the funding to cover one expert only.

Article 4

Content of the agreement 1. The competent organs of the participating legal entities and the special negotiating body shall negotiate in a spirit of cooperation with a view to reaching an agreement on arrangements for the involvement of the employees within the SCE. 2. Without prejudice to the autonomy of the parties, and subject to paragraph 4, the agreement referred to in paragraph 1 between the competent organs of the participating legal entities and the special negotiating body shall specify: (a) the scope of the agreement; (b) the composition, number of members and allocation of seats on the representative body which will be the discussion partner of the competent organ of the SCE in connection with arrangements for the information and consultation of the employees of the SCE and its subsidiaries and establishments; (c) the functions and the procedure for the information and consultation of the representative body; (d) the frequency of meetings of the representative body; (e) the financial and material resources to be allocated to the representative body; (f) if, during negotiations, the parties decide to establish one or more information and consultation procedures instead of a representative body, the arrangements for implementing those procedures; (g) if, during negotiations, the parties decide to establish arrangements for participation, the substance of those arrangements including (if applicable) the number of members in the SCE's administrative or supervisory body which the employees will be entitled to elect, appoint, recommend or oppose, the procedures as to how these members may be elected, appointed, recommended or opposed by the employees, and their rights; (h) the date of entry into force of the agreement and its duration, cases where the agreement should be renegotiated and the procedure for its renegotiation, including, where appropriate, in the event of structural changes in the SCE and its subsidiaries and establishments which occur after the creation of the SCE. 3. The agreement shall not, unless provision is made otherwise therein, be subject to the standard rules referred to in the Annex. 4. Without prejudice to Article 15(3)(a), in the case of an SCE established by means of transformation, the agreement shall provide for at least the same level of all elements of employee involvement as the ones existing within the cooperative to be transformed into an SCE. 5. The agreement may specify the arrangements for the entitlement of employees to participate in the general meetings or in the section or sectorial meetings in accordance with Article 9 of this Directive and Article 59(4) of Regulation (EC) No 1435/2003.

Article 5

Duration of negotiations 1. Negotiations shall commence as soon as the special negotiating body is established and may continue for six months thereafter. 2. The parties may decide, by joint agreement, to extend negotiations beyond the period referred to in paragraph 1, up to a total of one year from the establishment of the special negotiating body.

Article 6

Legislation applicable to the negotiation procedure Except where otherwise provided in this Directive, the legislation applicable to the negotiation procedure provided for in Articles 3, 4 and 5 shall be the legislation of the Member State in which the registered office of the SCE is to be situated.

Article 7

Standard rules 1. In order to achieve the objective described in Article 1, Member States shall lay down standard rules on employee involvement which must satisfy the provisions set out in the Annex. The standard rules as laid down by the legislation of the Member State in which the registered office of the SCE is to be situated shall apply from the date of the registration of the SCE where either: (a) the parties so agree; or (b) by the deadline laid down in Article 5, no agreement has been concluded, and: - the competent organ of each of the participating legal entities decides to accept the application of the standard rules in relation to the SCE and so to continue with its registration of the SCE, and - the special negotiating body has not taken the decision provided in Article 3(6). 2. Moreover, the standard rules fixed by the national legislation of the Member State of registration in accordance with part 3 of the Annex shall apply only: (a) in the case of an SCE established by transformation, if the rules of a Member State relating to employee participation in the administrative or supervisory body applied to a cooperative transformed into an SCE; (b) in the case of an SCE established by merger: - if, before registration of the SCE, one or more forms of participation applied in one or more of the participating cooperatives covering at least 25 % of the total number of employees employed by them, or - if, before registration of the SCE, one or more forms of participation applied in one or more of the participating cooperatives covering less than 25 % of the total number of employees employed by them and if the special negotiating body so decides; (c) in the case of an SCE established by any other way; - if, before registration of the SCE, one or more forms of participation applied in one or more of the participating legal entities covering at least 50 % of the total number of employees employed by them; or - if, before registration of the SCE, one or more forms of participation applied in one or more of the participating legal entities covering less than 50 % of the total number of employees employed by them and if the special negotiating body so decides. If there was more than one form of participation within the various participating legal entities, the special negotiating body shall decide which of those forms must be established in the SCE. Member States may fix the rules which are applicable in the absence of any decision on the matter for an SCE registered in their territory. The special negotiating body shall inform the competent organs of the participating legal entities of any decisions taken pursuant to this paragraph. 3. Member States may lay down that the standard rules referred to in Part 3 of the Annex shall not apply in the case provided for in paragraph 2(b). SECTION III RULES APPLICABLE TO SCEs ESTABLISHED EXCLUSIVELY BY NATURAL PERSONS OR BY A SINGLE LEGAL ENTITY AND NATURAL PERSONS

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