Labour Research June 2005

European news

UK gets first "European Company"

The first "European Company", that is a company established under European rather than national country rules, has been set up in the UK. It is Schering-Plough Clinical Trials, formed by the merger of Irish and UK subsidiaries of the US pharmaceuticals group Schering-Plough.

European legislation making it possible to establish European Companies came into force last October. Just three others have been set up so far.

European Companies are of interest to trade unions because the directive guarantees board-level employee participation under certain circumstances.

However, this is unlikely to be the case with Schering-Plough Clinical Trials. A company spokeswoman told Labour Research that it "does not and is not expected to have any employees". It has been set up to comply with the requirement to have a legal representative in the EU for clinical trials taking place there.

In the meantime the European Parliament has adopted another directive - on cross-border mergers - with implications for employee participation. The position accepted by the parliament guarantees negotiations on employee participation at board level where one of the merging companies has this level of involvement.

The European Companies directive guarantees employee representation at board level if 25% of the employees in the merged company previously benefited from it. In the mergers directive, however, the threshold is raised to 33.3%.