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The European Court of Justice (ECJ) ruled on May 16, 2024 (Case C-706/22) that, under European law, there is no obligation to conduct a subsequent employee involvement procedure (negotiation procedure) if a European Company (Societas Europaea, SE) was initially established without an employee involvement procedure due to the absence of employees. According to European law, the negotiation procedure with employee representatives must be conducted only before the SE is registered, not afterwards.
The ECJ thus contradicts the case law of individual national courts, such as the Higher Regional Court of Düsseldorf in its decision of March 30, 2009, as well as the prevailing practice to date.
What are the implications of the ruling?
- Employee involvement agreements concluded in the past remain valid and in effect (unless the parties exercise an agreed termination right).
- The ruling undermines the basis for participation rights granted under the statutory fallback provisions following unsuccessful negotiations.
- Employee involvement agreements may still be concluded voluntarily - in most cases, this is beneficial for both parties.